Encouraging the development of a market for college-level software is a key
theme of Educom's National Learning Infrastructure Initiative. Colleges and universities
want and need high quality solutions to the instructional problems they face; publishers
and other software developers are interested in providing those solutions.
But we have not yet seen the emergence of a viable market for interactive learning materials in higher education as we have at the K-12 level. As Roger Schank said in a recent Educom Review, "It involves a major investment in a non-existent business. . . . No one is going to spend the money . . . until the profit possibilities are clear."
An important part of making the profit possibilities clear is identifying who is willing to pay for instructional software - i.e., the customer. The 1995 Education Market Report, recently issued by the Software Publishers Association, aims to address this issue by providing a summary of existing research on the education market - including U.S. and Canadian K-12, higher education and home schooling - for SPA members. When I read the report, I was thunderstruck to find the following statement: "Unlike K-12, higher education enrollment is not expected to be a key market driver for the remainder of the decade." How could this be? This statement is totally at odds with my view of higher education as a growth market, unable to keep pace with rising demand.
In assessing the higher education market, the authors make a number of erroneous assumptions. The first is that the market consists of on-campus students, primarily full-time, 18-to-22-year-olds. Based on this assumption, the SPA report concludes that the market will remain static. Michael Dolence and Donald Norris offer an alternate view in their recently published monograph, Transforming Higher Education: A Vision for Leaning in the 21st Century. They project that by the year 2000 the demand for postsecondary education will increase by 20 million FTE in the U.S. and by 100+ million worldwide. This anticipated growth will come not from traditional, on-campus students but from those already in the workforce: those whose knowledge needs continual updating (think engineers, medical personnel, computer programmers) or those who need to acquire new skills (think 40,000 laid-off AT&T employees).
Echoing this point of view, the Western Governors Association cites "the press of increased demand on their state systems of postsecondary education" as the driving force behind its efforts to create a virtual university. But this demand is not coming from on-campus students. Here's one of the examples they use in their vision statement to illustrate demand. A CEO of a small software company discovers his programmers need proficiency in C++ programming, but the nearest classroom training is three hours away. He learns that other software companies are experiencing similar training challenges. Together, they approach the western virtual university and develop a set of expected competencies and assessment approaches for certifying C++ programmers. Using these established expectations, the virtual university launches a competitive grants process for courseware development.
The governors' preferred solution to meeting demand for higher education is not to build new universities but to "expand the marketplace for instructional materials, courseware, and programs utilizing advanced technology that have already been devised by public and private sector providers, and to foster interstate and public-private cooperation in the development of new instructional materials that respond to unmet needs in the region." The ideas behind the western virtual university offer new ways for software developers to think about providing educational services to off-campus students, including competing with existing institutions to sell their products directly to the customer.
The second error in the SPA report concerns the on-campus market: the authors assume that the institution is the customer for instructional software. The report provides standard NCES data on higher education enrollment by Carnegie classification as well as further institutional breakdowns by size, type, public and private status, etc. The authors regard this kind of institutional classification as significant, noting that "Carnegie class - as a segment - is generally considered to be the best predictor of buying behavior." By this they mean that the nation's 226 research universities are the best customers. As part of the assumption that the institution is the market, they provide data on overall higher education funding levels and specific breakdowns for college and university spending on technology which, again, they regard as a key indicator.
What's wrong with this assumption? After all, institutions have been major customers for administrative systems, library automation and campus networking software. But in the case of instructional software, the customer is the student. Students are the customers for learning materials (textbooks, art supplies), learning tools (calculators, personal computers) - both purchased directly by the student - and for learning services, paid for by course tuition and fees. Assuming that the institution is the customer can lead to all kinds of faulty conclusions. Focusing on institutional dollars spent on technology, for example, ignores the rapid growth in student purchases of personal computers. Focusing solely on institutional spending also ignores the dollars spent directly by students for textbooks and other learning materials.
The problem today is that very little college-level software is available for students to buy. Just ask yourself, if great instructional software were available at a reasonable price, would students buy it? Of course they would, just as they have bought great word processing and spreadsheet programs. And what faculty member would assign an inferior textbook over a superior software product? If great software were available, institutions may be willing to work out licensing agreements with vendors to lower the cost to students, but the student is still the customer.
So how can software developers win in education? How can they create new markets? By focusing on students, and on what they need. On campus, concentrate development efforts on what students study - the one percent of the courses that enroll nearly fifty percent of the students. Off campus, ask employers what skills and competencies they need and how well traditional institutions are meeting that need. Step in and fill the gap. In the words of the Clinton campaign, it's the student, stupid!
Carol A. Twigg is vice president of Educom. [email protected]