Education-Software Market Awash With Change

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After long being considered a sideshow of the nation's multibillion-dollar software industry, the education-software market is undergoing dramatic changes that could raise its visibility and have important long-term effects for schools.

Developments in recent months suggest that major software developers, which traditionally have shunned the education market, may now be ready to take it more seriously. While these competitors appear mostly to be targeting the enormous potential for growth in the home market, their moves may have a ripple effect on classroom computing as well.

Evidence of the changes sweeping the industry include:

  • Disputes before the U.S. Patent and Trademark Commission involving patents for optical-disk technology widely used in education.

Observers say controversy over the patents could prompt radical changes in intellectual-property laws. Moreover, analysts suggest, the strenuous efforts that the patent holders have been willing to make to defend their properties are an indication of the huge financial stakes available in the market for these products.

  • Microsoft Corporation, a giant in the software industry, has launched a new line of products aimed at both the home and school markets.

To help create a market for its software, the company is sponsoring a nationwide series of school-based technology seminars to expose parents, students, and educators to its products. It also plans to donate 15,000 copies of the software to classroom teachers.

  • The financially troubled Apple Computer Inc., the dominant manufacturer in the K-12 market, has dropped the venerable Apple II machine from its product line.

Though long anticipated, the end of production of a machine that still represents more than half of the installed K-12 base is seen as opening the way for new machines and more sophisticated software to enter the schools.

While some observers said it was too early to tell whether these unrelated developments portend lasting changes in the education market, others said the industry has reached a watershed.

Taking Education Seriously

"If I were trying to find a strand that ties all of those [developments] together, it is that the education market, which has always been a backwater, is now being taken seriously,'' said Jeanne Hayes, the president of Quality Education Data, a Denver-based firm that tracks the K-12 market.

"That's a huge change over five years ago,'' she said.

In addition, the controversies over patent issues are a symptom of the unprecedented changes under way as electronic resources join textbooks in the curriculum, noted Geoffrey Fletcher, the associate commissioner for technology applications for the state education department in Texas, which was the first state to put videodisks on its list of approved texts.

"It's part of the entire struggle of moving from the old ways of doing things,'' he said.

Battle Over Multimedia

Perhaps the most dramatic of the recent developments in the field came in November, when Compton's NewMedia, a California firm known in the school market for its electronic encyclopedia, announced that it had patented a "multimedia'' search system for its CD-ROM-based products.

Most of the software titles that could infringe on the new patent are for education or research, noted Philip V.W. Dodds, the executive director of the Interactive Multimedia Association, a national trade organization based in Annapolis, Md.

The patent would allow the company--which recently was acquired by the Tribune Publishing Company--to demand licensing fees from its competitors in the burgeoning multimedia field. Other entrants into the market include Microsoft, which has positioned "Encarta,'' its multimedia, compact-disk-based encyclopedia, and other CD-ROM products prominently in its educational line.

When Compton announced that it had been awarded the patent, competitors were sharply critical, arguing that the material covered by the patent is neither unique nor innovative.

In response to the furor, Bruce A. Lehman, the U.S. commissioner of patents and trademarks, announced last month that his office would review the patent.

Most observers believe the patent has little chance of being upheld. Many software programs today use similar techniques, they note, while "multimedia'' has become a widely used marketing term for any software that combines sound, images, and text.

Videodisks At Issue

Meanwhile, two leading educational publishers are engaged in litigation over patents on educational videodisks.

In 1992, the New Jersey-based Optical Data Corporation received two patents in connection with its "Windows on Science'' product, one of which dealt with instructional methodology and the other with a method of curriculum planning and publishing.

The patents were subsequently challenged, however, by a Seattle-based competitor, Videodiscovery Inc., which charged that the Optical Data patents covered innovations that already were widely used in the industry.

Late last year, shortly before a court-ordered deadline for Optical Data to respond to the charges, the company announced that it would donate the patent on teaching methodology to the public domain.

The patent office, meanwhile, has granted Optical Data's request to review the second patent.

Mr. Dodds noted that the Optical Data case is particularly troubling to educators because patent protection often is enforceable against end-users--in this case, frequently teachers.

Joe Clark, Videodiscovery's chief executive officer, said the controversy also points to the need for reforms in the federal patent process, which until 1980 did not cover software.

Without a clear vision of what constitutes innovation in the field, he said, the patent office could inadvertently foster additional costly litigation and effectively discourage product development.

'It's Got To Be Important'

Although educational versions of some of its products have been used in schools for several years, Microsoft's renewed interest in the education market may convince other firms as well that the field is more lucrative than previously believed.

"What it also does is create some legitimacy to the education market,'' Mr. Fletcher said. "Because [competitors may] feel, 'If Microsoft's looking at it, then it's got to be important.'''

Microsoft is taking an interesting new tack by largely bypassing schools to sell primarily to parents, noted James Mecklenburger, the president of the Mecklenburger Group, a Washington-area think tank that specializes in educational-technology issues.

While many companies have had "modest success'' in selling directly to schools, Mr. Mecklenburger noted, the real growth market in educational software is likely to be in sales to the home. Still, that surge may have the effect of sparking demand for more sophisticated software in the schools, he said.

The demise of the Apple II is also likely to spur changes in the software market.

Ms. Hayes noted that schools, as a "frugal market,'' still maintain vast libraries of Apple II software and will probably continue to do so as long as some of Apple's Macintosh machines run the programs.

In the long run, however, software developers will be able to produce higher-quality products if they do not have to weigh the Apple II's limitations in development decisions.

Vol. 13, Issue 16

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