Blackboard is awful. When I was at uni, I actually wrote a scraper to auto-download my course content so I didn't have to use the Blackboard UI. It's upwards of £100k/year too. Definitely a market ripe for a competitor!
Sakai and Canvas seem easy enough to setup that I can't imagine Blackboard can continue making money for much longer.
There's another system called LON-CAPA (written in Perl) that seems ancient compared the other competing systems. It was very easy to use and "just worked" but it felt like it was straight out of the Web 1.0 era.
That test LMS became the LMS for a few major airlines and a large fortune 50 company (uplifted through a few software shifts). It lasted for more than a decade before being replaced by an "Enterprise" solution, I think it was Blackboard (took 2 years to get it setup right, and people in the know still don't like it.
Blackboard has a lot of useful features built up over the years, and they're not all bugs.
People need a reason to change the software they use; when it means retraining a district full of teachers then the reason needs to be good.
The problem is that the market is next to impossible to get into. They're like Photoshop - they've got an army of people trained in using their super complex UI. It's the de facto standard in the market; they've built a massive moat which will be extremely hard to get past.
Sometimes, unfortunately, you can get away with a worse product and better marketing!
Back when I was a SE student, we wrote an application for our university that students could use to access their examination schedules without having to look through the Blackboard calendar.
Which was so much better, because you did not have to log in and it was faster than going through Blackboard's UI...
Canvas is the new kid on the block. Even Canvas has issues though so it’s great as a replacement for Blackboard, but there’s still plenty more that can be disrupted and improved.
But the big plus: Open Source and completely free to self-host