Digital transformation and new digital technologies such as internet of things (IoT), artificial intelligence (AI), mobile and social internet, blockchain and big data, companies in educational sector are taking initiatives in order to explore and exploit the advantages of these technologies and their potential. This includes changes of key education services delivery and affects procedures, as well as organizational structures and management principles in order to carry out these dynamic transitions across the organization and throughout the educational ecosystem. Meanwhile, educational ecosystem is facing rapid and drastic changes due to the maturation of emerging technologies and their rapid penetration to daily use, while the demands of consumers are growing and education and training institutions are facing higher competition due to digitalization. Although digitalization and digital transformation are becoming a common subject for the ongoing changes in society and organizations, the current state of the literature lacks significant conceptual and empirical studies detailing how organizations are becoming digitally transformed and what added value is created for the final beneficiary (in our case, students) by comparing learning outcomes using digital and traditional teaching methods. Digital transformation is defined as „the process through which companies converge multiple new digital technologies, enhanced with ubiquitous connectivity, with the intention of reaching superior performance and sustained competitive advantage, by transforming multiple business dimensions <…>“ (Abdelaal and Zakil, 2018, p. 44). Digital transformation is different from traditional forms of strategic changes because digital technologies determined the speed of change processes and this creates an environment that is much more unstable, uncertain and complex. Digitalization has already played a major role in the ecosystem of education when COVID-19 forced school buildings to close and education to go digital to a varying extent worldwide. An unparalleled accelerated experiment on school systems was launched by COVID-19. This has created new threats and opportunities for educational ecosystem members (teachers, students, administrators, suppliers) of digital educational materials and equipment. Providers and buyers/users had encountered conflicts related to digital transformation in their relationships even before COVID-19. The ongoing business model innovation due to the digital transformation has abruptly accelerated. This article aims to examine the concept of business model innovation during COVID-19 and to discuss the design of the key elements of digital transformation in paid educational services. In this paper, we report the results of the research on how the business model has changed in organizations providing paid education services. A comparative case study analysis of Lithuanian and Latvian institutions that provided paid educational services is presented. The analysis of the research data was created using R-4.0.3 for Windows. The results of the study reveal how the teaching and learning process has changed and expanded, how the demand and supply of learning materials have changed, and how organizations providing paid teaching services have adapted to the changed circumstances.