Presented by: Ahmar Abbas, Director, Blackboard ASP Services Managing Mission Critical Applications Blackboard ASP SM Perspective April 13, 2005

A word from our lawyers… Any statements in this presentation about future expectations, plans and prospects for Blackboard and other statements containing the words "believes," "anticipates," "plans," "expects," "will," and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the factors discussed in the "Risk Factors" section of our most recent 10-K filed with the SEC. In addition, the forward-looking statements included in this press release represent the Company's views as of April 11, The Company anticipates that subsequent events and developments will cause the Company's views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to April 11, Blackboard, in its sole discretion, may delay or cancel the release of any product or functionality described in this presentation.

Agenda Requirements of the Networked Learning Environment™ Five Reasons to Choose Blackboard ASP Services –Reliability –Security –Scalability –Fully Managed Service –Cost Control Strategic Role of Blackboard ASP Summary

The Networked Learning Environment A true networked learning environment exists when any student or teacher can: –view instructional content –collaborate with educators –evaluate academic performance –access any learning resources at any time to achieve their educational objectives.

MISSION CRITICAL EXPLORATORY TIME SUPPORTEDSTRATEGICTRANSFORMATIVE: THE NETWORKED LEARNING ENVIRONMENT Phase I Phase 2Phase 3Phase 4 Phase 5 INSTITUTIONAL GROWTH The Blackboard® Applications for a Networked Learning Environment Blackboard Learning System Blackboard Community System™ Blackboard Learning System Blackboard Community System Blackboard Content System™ Blackboard Learning System Blackboard Community System Blackboard Content System Blackboard Academic Suite™ Blackboard Learning System™– Basic Edition

Why Consider ASP Services? MISSION CRITICAL EXPLORATORY TIME SUPPORTEDSTRATEGICTRANSFORMATIVE: THE NETWORKED LEARNING ENVIRONMENT Phase I Phase 2Phase 3Phase 4 Phase 5 INSTITUTIONAL GROWTH Blackboard Applications are no longer “optional” 24/7/365 Availability & Support is Mandatory Allows Institutions to Focus on Teaching and Learning Detailed Risk Assessment

Technology Risk Factors Cost Control Security Reliability Scalability Fully Managed Service

Reliability: Build Redundancy & Stability ASP Infrastructure located in Tier-1 Datacenters at the heart of the Internet (MAEast in Virginia) Multiple ISP connections to three Tier-1 ISPs for redundant access to Internet & aggregate 2.4 Gbps capacity Multiple, Redundant Routers, Firewalls, Load Balancers, Switches & Servers 4 levels of power backups for 100% power availability Climate control for optimal network environment Cost Control Security Reliability Scalability Fully Managed Service

Reliability - Network Design Private ZonePublic Zone Blackboard ASP VA1 Facility Private ZonePublic Zone Blackboard ASP VA2 Facility Optical Fiber Ring Connection Between Facilities

Scalability: Build an Environment to Support Growth Bandwidth and Storage is Never Capped Additional Bandwidth on Demand –Available in 1 Mbps increments Additional Storage on Demand –10 GB unit increments for Learning System –1 TB unit increments for Content System Additional Servers Added as Needs Grow Additional Active Users Support –Includes incremental bandwidth, storage and hardware Software Updates/Upgrades Made Easy Cost Control Security Reliability Scalability Fully Managed Service

Scalability: Add Additional Services as Needed Staging Environment –Designed for new release/updates simulation in production environment before migration to production –Production Environment with full SLA guarantee & backup –20 GB Storage space –24 x 7 monitoring & management –No root access allowed Test & Development Environment –Designed for “test & development” –Full root access given to clients –Not in production environment –9 GB storage space –No backup guarantee SSL & VPN Services Also Available

Scalability: Complex Hosting Service for High Availability Environments Developed for clients requiring high availability and performance oriented solutions: Oracle RAC & Mirrored Dedicated Arrays Three Components: –High Availability Infrastructure Design and Deployment –Dedicated Complex Hosting Engineer/Manager –Business Continuity Service

Scalability: Supporting Growth

Scalability: Business Continuity Service Levels Recovery Time Objective (RTO) Recovery Point Objective (RPO) Customization & Configuration Locally hosted client: Weekly backup service 24 hours Last backup less than 8 days Fully backed up (if possible) Monthly backup service72 hoursLast backup less than 32 days Rebuild Incident-based service120 hoursLatest backup receivedN/A Blackboard ASP hosted client: Level 3 Service6 hoursLast backup less than 3 hours Fully backed up Level 2 Service24 hoursLast backup less than 12 hours Fully backed up Level 1 Service72 hoursLast backup less than 24 hours Rebuild

Security: Protect Network and Backup Data Physical Security: Tier-1 datacenter security including: –limited access to authorized personnel –identification badges –security cameras –24x7 on-site security Network Security: Including –Firewall & Intrusion Detection System –Full-time Security Engineer –Third Party Audit Data Security: Multiple levels of database and file backup Cost Control Security Reliability Scalability Fully Managed Service

Security: Data Backups 1 st level backup: using snapshot technology, file systems & database backed up daily 2 nd level backup: using NetApp filers, 1 st level backups are stored online at separate datacenter for 30 days 3 rd level backup: weekly backups are stored in tape, off-site for 30 days

Fully Managed Service: 24x7 Operations and Support One Stop Client Support from experts who design and host the software Services backed up by 99.7% Availability Guarantee – credit issued for violations 24 x 7 ASP Support –Dedicated Application Support Manager –Single Point of Contact for Blackboard Software and Hosting –Two Designated Client System Administrators –Phone, Web and based Ticketing System –Escalation and Response Time based on Severity –All Upgrade and Patch Applications Provisioned by Experienced Professionals Cost Control Security Reliability Scalability Fully Managed Service

Fully Managed Service: Backed by Team of Experts

ASP Operations Team : Constantly Expanding in Depth and Breadth of Talent and Skill Set 35 Member Strong Dedicated to only Blackboard ASP Clients Includes DBAs, Network Engineering, Storage Engineers, Operating System Specialist, Backup Technology Specialists 25 Different Technology Certifications including: Linux OS Oracle DBA, Tuning, High Perf Application Acceleration Storage and Backup Mgmt Follow the Sun Coverage Shift 2 Shift 1 Shift 2 Shift 3

Fully Managed Service: Infrastructure Monitoring and Management Key Performance Metrics polled every 5 minutes –cpu = 5-minute load average –disk = % free on local mount points –nfs = % free on NFS mount points –msgs = scanning syslog for key words –memory = real, virtual and swap –procs = scanning ‘ps’ output –Obak = Oracle backup status –ofiles = Oracle data/index file sizes –files = other file/directory sizes –svcs = Windows Services checking –Application Check for Response Time

Fully Managed Service: Bandwidth Utilization Report

Cost Control: Lower Costs than Self-Hosted By hosting their Blackboard systems through Blackboard ASP Services, institutions realize significant savings when compare to hosting the systems on campus. Baseline 3 year savings depend on the type of implementation: –Blackboard Learning System – Basic Edition: $120,600 –Blackboard Learning System: $392,200 –Blackboard Academic Suite: $439,200 Cost Control Security Reliability Scalability Fully Managed Service

Cost Control: Lower Costs than Self-Hosted One-Time Implementation Costs36,600$ Service Setup Fee0$ Server hardware6,000$ Network hardware12,000$ Backup hardware6,000$ Database software license 0$ Monitoring system software5,000$ Backup system software5,000$ Implementation personnel$ Staff training1,000$ Annual Management Costs*58,000$ Annual Subscription Fee30,000$ IT Management30,000$ Application Administration-$ System Administration-$ Database Administration25,000$ Hardware Administration-$ Bandwidth & Network3,000$ TOTAL COST OF OWNERSHIP (3 YEAR PLAN) $158,600 + (3 x $126,000) =210,600$ $20,000 + (3 x $42,000) =90,000$ TOTAL SAVINGS BY CHOOSING BLACKBOARD ASP SOLUTION:120,600$ Self-HostedBlackboard ASP Includes dedicated application & database servers, network infrastructure, backup infrastructure, monitoring software and systems, Tier-1 data center and professional implementation Includes 24 x 7 customer support and management, dedicated Application Support Manager, team of database administrators & network engineers 3 Year Total Cost of Ownership Analysis: Blackboard Learning System – Basic Edition *Assumes a Red Hat Linux/Oracle implementation on Dell Hardware *Assumes 20% of time of personnel is used for ongoing management 1,600

Cost Control: Lower Costs than Self-Hosted One-Time Implementation Costs160,200$Service Setup Fee0$20,000 Server hardware12,000$ Network hardware47,000$ Backup hardware12,000$ Database software license12,000$ Monitoring system software20,000$ Backup system software50,000$ Implementation personnel3,200$ Staff training4,000$ Annual Management Costs*126,000$ Annual Subscription Fee42,000$ IT Management30,000$ Application Administration25,000$ System Administration$20,000 Database Administration25,000$ Hardware Administration$20,000 Bandwidth & Network6,000$ TOTAL COST OF OWNERSHIP (3 YEAR PLAN) $160,200 + (3 x $126,000) =538,200$ $20,000 + (3 x $42,000) =146,000$ TOTAL SAVINGS BY CHOOSING BLACKBOARD ASP SOLUTION:392,200$ Self-HostedBlackboard ASP Includes dedicated application & database servers, network infrastructure, backup infrastructure, monitoring software and systems, Tier-1 data center and professional implementation Includes 24 x 7 customer support and management, dedicated Application Support Manager, team of databse administrators & network engineers 3 Year Total Cost of Ownership Analysis: Blackboard Learning System *Assumes a Red Hat Linux/Oracle implementation on Dell Hardware *Assumes 20% of time of personnel is used for ongoing management

Cost Control: Lower Costs than Self-Hosted One-Time Implementation Costs180,200$Service Setup Fee0$35,000 Server hardware18,000$ Network hardware47,000$ Backup hardware24,000$ Database software license12,000$ Monitoring system software20,000$ Backup system software50,000$ Implementation personnel3,200$ Staff training6,000$ Annual Management Costs*158,000$ Annual Subscription Fee60,000$ IT Management37,500$ Application Administration31,250$ System Administration$25,000 Database Administration31,250$ Hardware Administration$25,000 Bandwidth & Network6,000$ TOTAL COST OF OWNERSHIP (3 YEAR PLAN) $180,200 + (3 x $158,000) =654,200$ $35,000 + (3 x $60,000) =215,000$ TOTAL SAVINGS BY CHOOSING BLACKBOARD ASP SOLUTION:439,200$ *Assumes a Red Hat Linux/Oracle implementation on Dell Hardware *Assumes 25% of time of personnel is used for ongoing management Self-HostedBlackboard ASP Includes dedicated application & database servers, network infrastructure, backup infrastructure, monitoring software and systems, Tier-1 data center and professional implementation Includes 24 x 7 customer support and management, dedicated Application Support Manager, team of database administrators & network engineers 3 Year Total Cost of Ownership Analysis: Blackboard Academic Suite

Strategic Role of ASP in Blackboard’s Business Trajectory Strategic Emphasis on Blackboard ASP as a way of delivering a galvanizing learning experience – backed by Board Level engagement and support for 2X capital expenditure and operational growth Blackboard ASP Performance now tracked by financial Analysts and a on quarterly basis Quarterly audits by Corporate Auditors of ASP Clients for service review 13 of Top 20 Blackboard Clients based on Revenue are ASP Clients 2004: A Record Year for ASP: –Number of New Clients –Mix to Large/Medium/Small Clients Drastic Shift –Growth and Expansion of Existing Clients

Expanding Blackboard Investment Significantly 1-2Q ‘043-4Q ‘041-2Q ’05 *3-4Q ’05 *‘03 $485K$613K$1,100K$1,030K Storage expansion Third Party Vulnerability Analysis Visa CISP Certification Process Investment Intrusion Detection Netcool Fault Mgmt System Uptime Systems Agent NTOP Internet Service Monitors Data Center (Reston) 2.5 Gbps Wavelength Connectivity Between Two Data Centers On-line Offsite Backup at New Data Center New Switching Infrastructure New Storage Infrastructure New Networking Infrastructure 4 x 1000 Gbps Internet Links TCP Offloading Technology Compression Technology Caching Implementation New Load Balancing Infrastructure ASP Testing Lab Data Center (London) Global Caching Clustering Storage Solutions Internet Service Monitors for HTTP, HTTPS, LDAP deployed remotely Load Generation *= target dates only

Build-out with Max Headroom

Infrastructure Expansion Supported by Tools Development ASP Opsmart: Inventory and Change Management System – Links Directly to Peoplesoft to pick client information -Over 800 database entries manually verified -Change Management System and Calendar Deployed NetCool: Fault and Systems Management –Receiving Traps from Filers, IDS, Firewalls, Switches –All Big Brother Alerts NetCool ISM: Infrastructure Monitoring –Ping all Blackboard ASP Servers and Networking Equipment –HTTP Checks against all xxx.blackboard.com URLs –HTTPS/Transaction Test against a few clients Uptime: Systems Management –Installed on all Blackboard Servers –All Enterprise clients monitored NTOP: Network Statistics Collection –Collecting information on all Traffic Coming into ASP Data Center ASP Insight: Customer Statistics (available to 6 beta clients – and for internal use)

Results From Technology Investments Storage infrastructure CPU that was peaking at 90+% now peaks at 25% Load Balancer CPU Utilizations at less than 11% Routers processing capacity less that 15% utilized 60% of Requests being answered with objects in caching system 40% of Requests fully being answered with objects in the cache Networking Utilization at Semester Peaks is less than 8% utilized

2004: Service Quality Trajectory: Change Requests Requiring System Touch Reducing One in every 7 tickets requires system touch Includes upgrades/update requests Quarterly Trend over last 4 quarters towards Minimizing system change activities

Summary: Blackboard ASP Core Offerings Blackboard Learning System - Basic Edition Description Intel Xeon 3.1 GHz Multiprocessor Application / Database Server 10 GB of Storage 256 Kbps of Bandwidth Up to 3,000 Users 99.7% Availability SLA Blackboard Academic Suite Description Intel Xeon 3.1 GHz Multiprocessor Application Server Intel Xeon 3.1 GHz Multiprocessor Database Server Oracle Standard Edition Advanced Reporting System 20 GB of Storage 512 Kbps of Bandwidth Up to 8,000 Users 99.7% Availability SLA Blackboard Learning System Description 2 Intel Xeon 3.1 GHz Multiprocessor Application Servers Intel Xeon 3.1 GHz Multiprocessor Database Server Oracle Standard Edition Advanced Reporting System 40 GB of Storage 1 Mbps of Bandwidth Up to 8,000 Users 99.7% Availability SLA

Summary: Blackboard ASP Value Added Services Staging Environment Hosting System hosted in production datacenter 99.7% Availability Daily Backups Test and Development Hosting System hosted in non-production datacenter Client has root access to system No SLA Virtual Private Network VPN configured and managed by Blackboard 128 Bit Encrypted communication between Institution and the ASP hosted site SSL SSL key provided Encrypted access to web pages High Availability Hosting Oracle 9i RAC based Hosting Redundant Database Servers Business Continuity Service Host locally or ASP but use Blackboard ASP services for peace of mind Guaranteed Mean Time to Recover Complex Hosting Technical Management Dedicated technical management and support for complex clients On-Demand Storage/BW Additional Storage and BW service units

Summary: Blackboard ASP Services Fast Facts Over 300 Customers from All Market Sectors Over 3 Million Users in our Systems – Over 2 Million Enrolled Users 500,000+ Courses Servers 11 Terabytes of Storage Capacity & Growing 7 Terabytes of Data Transferred Daily 72,000,000 + HTTP Requests Served Per Day 99.7% or Better Uptime Guarantee

Expanding & Global Customer Base

Summary: Blackboard ASP Services Supporting Key Global Blackboard Clients since 1999 Pearson plc Houghton Mifflin Reed Elsevier LexisNexis Thomson Learning Mitsubishi Corporation Morgan Stanley Manulife Financial American Bankers Association Marsh, Inc. National Defense University Naval Postgraduate School USDA Graduate School Naval War College FAO Chile Voyager Expanded Learning KC Distance Learning Spectrum Pacific Learning Laureate, Inc. Kaplan Embry Riddle Aeronautical University University of Miami San Francisco State University Georgia Virtual Technical Colleges Lakeland College Fairfax County Public School Columbus Public Schools Idaho Digital Learning Net Second Baptist School Wichita Public Schools PublishersHigher EducationGovernment CorporateCommercialK-12