Moodle’s External Link resource is one of the most flexible in the educator’s/course creator’s tool belt. To date we’ve been using IMS Global’s LTI 1.1 standard to provide access from Moodle to an assortment of 3rd party tools(or even other Moodle sites). The value is an uncomplicated SSO system that provides the minimum amount of data required to allow students to work on a 3rd party system to interact, socialize, or even take a test. In other LMSes it’s called bLTI (b as in “basic”).
Vital Source Technologies (perhaps known to you through their ebook service or recent acquisition of CourseSmart) is proposaing to upgrade Moodle’s LTI capabilities to the 2.0 specification available through IMS Global: http://www.imsglobal.org/blog/?p=184.
What’s the benefit? In short the process of setting up an External Tool should be much simpler to the end user and the supporting features more robust. According to the blog post at IMS Global announcing LTI 2 (in late 2012),
LTI 2 provides a more sophisticated and extensible platform for providing deeper integrations, and greater support for services and events. For example, tool providers will be able to specify where their links should appear in the LMS and provide support for user-selected languages. LMSs may notify tool providers when a course is copied, archived or restored to allow more dynamic messaging and updates between systems. LTI 2 builds on LTI 1 by incorporating more sophisticated outcomes reporting and a rich extensions architecture. LTI 2 uses REST and JSON-LD to deliver this new functionality.
The current discussion is focused on whether the plugin should replace or be in addition to the current Moodle External Tool, now is the time to provide your input. Join the discussion here: https://moodle.org/mod/forum/discuss.php?d=261527
Draft specifications (a work in progress) are available http://docs.moodle.org/dev/LTI_2_support