From college campuses to the halls of Congress, there is broad agreement that higher education is experiencing a major wave of innovation. This article holds that the changes are significant, but that the resulting threats to existing institutions are manageable if key leaders understand them and if institutions adapt to the new environment. The key to successful adaptation is business model innovation, and schools of continuing, professional, and online education are particularly well situated to provide the "innovation space" that business model innovation requires. What kind of business model innovation is needed to succeed in the face of rapid technological changes and a newly emerging competitive and regulatory environment? The article provides answers for consideration.