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Ed. Tech. Executives Gather to Brainstorm How They Can Serve Schools Better

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How is the Internet helping to transform classroom learning? And how can education-technology companies better design their products for Web 2.0, the newer and faster-paced version of the Internet?

Those were some of the questions that more than 350 executives from education-technology companies, education publishers, private equity firms, and venture capital firms grappled with in a one-day conference Nov. 29 sponsored by the Software Information & Industry Association, a nonprofit trade group based in Washington.

Outside, relaxed holiday tourists teemed the neon-lit streets of midtown Manhattan, but just steps away, inside the tony Princeton Club, dark-suited conference attendees took notes and listened intently to speakers such as Paul G. Vallas, the chief executive officer of the 194,500-student Philadelphia school district, and D. Midian Kurland, the vice president for technology and development at Scholastic Education, a division of New York City-based publisher Scholastic Inc.

Mr. Vallas talked about how technology can help perennial problems faced by school districts, such as ensuring teacher competency, providing classroom resources, spurring parental involvement, and revamping aging school buildings. Tools such as data-driven management systems; Web-based grading, scheduling and communication software; laptop computers; and interactive white boards can help shore up classroom teaching and learning, he added.

Mr. Vallas emphasized the use of hardware over software in schools, which seemed to make some of the attendees—many of whom work for software companies—stir uneasily. When asked what the single most important technology is for schools, Mr. Vallas said: “There’s nothing to keep the students more focused than having a laptop in a classroom with a whiteboard.”

Digital Divide Revisited

Mr. Kurland spoke of another challenge for education-technology companies: the differing levels of Internet connectivity in schools.

While most classrooms now have Web-accessible computers, the connections range from slow dial-up to high-speed T1 lines, he said.

“How do you get [online education] products to work both in tech-savvy districts and tech-unfriendly districts?” Mr. Kurland said.

Revamping textbooks and other print-based curricula for the Web was another oft-debated issue. During a question-and-answer session, one attendee talked about what he called “the iPodding of education,” referring to Apple Computer Inc.’s popular iPod. Instead of purchasing entire music albums, iPods and other MP3 players allow users to choose and download one or several songs from thousands of albums.

Likewise, the same conference attendee wondered whether schools will increasingly purchase just small parts of many textbooks and create their own curricula. “Textbooks are what [music] albums were years ago,” he said. “Is that going to happen in education?”

Mr. Kurland replied, “We know it’s coming. But we think it’s a bad idea.”

There is room to satisfy the more flexible purchasing needs of schools without compromising the efficacy of textbooks and other education tools, said another presenter, George Kane, the vice president for strategic initiatives at the Upper Saddle River, N.J.-based Pearson Education, a division of Pearson PLC, based in London, that produces both print and online curricula. But Mr. Kane said it’s not an easy fix, and one that the industry is trying to figure out. “It’s not as simple as taking scissors out and snipping off pieces,” he said.

Mergers and Acquisitions

Mergers and acquisitions have been robust in the K-12 educational technology industry, and were a hot topic at the conference. Attendees buzzed about the then-impending acquisition of education publisher Houghton Mifflin Co. by the young, Dublin, Ireland-based education software company Riverdeep Holdings Limited.

Also, the number of mergers in the second quarter of this year more than doubled compared with the same period in 2005, from 8 to 17, with Pearson PLC leading the charge, according to New York City-based Whitestone Communications Inc., a mergers and acquisitions advisory firm. Pearson, for example, last year purchased supplemental-materials publisher American Guidance Services for $270 million from struggling rival WRC Media, based in New York City.

As a consequence, attendees paid special attention when a representative from the “sell” side and another from the “buy” side gave tips on how to make the mergers and acquisitions process smoother for both acquiring and merging companies.

Don’t be distracted by how “shiny” the possible acquisition is, said Michael E. Johnson, the chief operating officer of digital educational content distributor Follett Digital Resources, a division of River Grove, Ill.-based Follett Corporation. Follett has purchased a number of education-related companies, most recently e-learning company Constructive Instructs, Inc., based in Medford, Mass.

Mr. Johnson posed a number of questions for people interested in mergers and acquisitions. “What is the need for this acquisition? Does it fit with your company’s culture? Are you looking for market share? Or expanding share?”

“Come to complete grips with what your motivation is,” he told the group.

Vol. 26

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