School & District Management

Edison Moves Into Online-Learning Market

By Catherine Gewertz — July 01, 2008 4 min read
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Edison Schools Inc., which has long attracted controversy in managing public schools, announced Monday that it has changed its name to EdisonLearning and has bought a California-based software company that will help it compete in the fast-growing online-learning market.

The acquisition of Provost Systems Inc., based in Santa Clara, Calif., will allow Edison to offer online coursework to students directly, or through their schools or districts, Edison officials said. Provost’s software helps support two Pennsylvania online schools which serve a total of 10,000 students. It also includes student-information systems, benchmarking, standards-alignment systems, and a portal that allows students and families to get access to courses and grades.

In its 16 years as a for-profit manager of public schools, New York City-based Edison has weathered rocky financial terrain, criticism of its management style, and questions about its accomplishments. Most recently, the School Reform Commission in Philadelphia decided to take back four of the 20 schools Edison manages in that city. The panel cited inadequate academic progress in the schools.

Edison said in a prepared statement that the Provost acquisition caps a “two-year, full-scale strategic and operational transformation” of the company. But its officials said the move in no way signals a plan to scale back its current core business, which reaches 250,000 students in 19 states, the District of Columbia, and the United Kingdom through charter and traditional public school management and provision of academic programs such as tutoring. Acquisition of Provost is projected to stretch that reach to 350,000 students.

“We are still very much in the school-management and charter-school-management business. But we need to be able to partner with all reform-minded educators,” said Joseph Wise, the company’s chief education officer and a former superintendent of the Duval County, Fla., school district. “To do that, we have to increase our offerings as well as our delivery system.”

‘New Platforms’

Terry Stecz, Edison’s chief executive officer, said the company is trying to find ways to create “new platforms” to improve student performance, especially since it serves particularly large proportions of low-achieving students. It is trying to use what it has learned in running schools, he said, to become “the preferred partner for large urban systems, states, or cities.” Doing that requires the ability to deliver a “continuum of solutions,” including a robust array of online options, he said.

In that vein, Edison has been developing a “hybrid” school design model that would enable students to learn both through traditional classroom and newer technological means, Mr. Stecz said. For the past three years, Edison has also been marketing its services as a turnaround specialist for districts with schools in need of restructuring.

The additional lines of service can help the company—which was often criticized for “taking over” schools—reposition itself as a collaborator with a range of approaches, Mr. Stecz said.

“In the early days, it was more that we had ‘A’ solution, and that isn’t as readily adaptable,” Mr. Stecz said. “In many ways, things got away from us in ... this notion of taking over or privatizing. That’s not what we’re about at all.

“We’ve learned in almost 20 years there is no one solution,” he said. “So it’s important to get into a community ... and create a portfolio that can address many needs.”

Steven Pines, the executive director of the Education Industry Association, a Rockville, Md.-based advocacy group for private-sector education companies, said he sees Edison’s move as a “diversification of business strategy that is smart and in tune with market changes.”

“The online marketplace is one of the hottest-growing niches in K-12,” he said. “To maintain its position as a well-known education brand, Edison is probably well served to step into that virtual space.”

Trace A. Urdan, the managing director of Baltimore-based investment bank Signal Hill Capital Group LLC, and a longtime analyst of the for-profit education industry, said Edison’s move positions it to grab a piece of the expanding world of “blended” or “hybrid” education, in which students combine study in brick-and-mortar buildings with study online. Other companies, such as K12, are moving into that area, with high-school-level coursework a particularly fast-expanding part of that market, he said.

The distinctions between the school-management business and the online-coursework business are blurring, Mr. Urdan said, as companies explore going beyond providing courses to providing entire curricula.

And while Edison’s new direction might not be motivated by a desire to minimize controversy, it could very well have that effect, Mr. Urdan said.

“They started at the much more difficult end of the spectrum, and now they’re moving into the less controversial, arguably easier end,” he said. “It’s getting away from the idea of, ‘We’re here to do what you do better than you do’ and into, ‘We’re selling you something you need and don’t have.’ ”

Edison also announced that it is launching the EdisonLearning Institute, a research-and-development arm aimed at creating research-based, customizable school designs.

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