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Ambivalent on Ed Tech

ambivalence or ambivalency  (æmˈbɪvələns) — n
the simultaneous existence of two opposed and conflicting attitudes, emotions, etc

On one hand, education is the slowest growing sector of global IT services.  From the Campus Technology summary of a new Gartner report:

Worldwide spending on services related to information technology increased modestly last year following a sharp dip in 2009. According to a new report from IT market research firm Gartner, education saw the slowest growth of all sectors in this type of IT spending.

On the other hand, educational technology is generating new interest from investors.

Online programs, powered by educational technology, are growing much faster than traditional programs, according to this Campus Technology summary of an Ambient Insight report:

The five-year compound annual growth rate (CAGR) growth rate for Self-paced eLearning across all eight of the buyer segments is 5.9%, but growth is much higher in particular segments. For example, growth rates in the PreK-12, healthcare, and association segments are 16.8%, 16.3%, and 14.3%, respectively.

This growth forecast parallels the data reports by the Sloan Consortium. Furthermore, as I have mentioned in previous posts, there is a renewed interest by investors in certain markets such as LMS.

What gives – should we view educational technology as a stagnant market or as a growing market? While these reports do not directly measure the same data (IT services spending vs. online and LMS spending), I do think the two articles illustrate that the nature and purpose of technology makes a huge difference.

Broadly speaking, there are three different trends in ed tech which may appear to conflict, one of which is trending down and two of which are trending up. On balance, overall IT services spending on ed tech ends up with slow growth. What are the three trends?

  • Spending on ongoing operations and maintenance of status quo is neutral or falling – Higher ed spending in particular is facing significant budget cuts, and the IT department has not been spared. Which CIO has not been asked to cut budgets? Despite growing demands on network bandwidth and security, schools are still insisting that IT makes do with less.
  • Investment by the publishing industry is needed to move an obsolete model into the digital world – The major educational publishers know that the model has to change, and they are furiously working and spending to transform their business models.
  • Investors see vulnerabilities by established market leaders, particularly in LMS – This is leading to new investment for higher ed LMS competitors, and market consolidation among corporate LMS competitors.

In my mind, money is entering the market where transformation is possible. Transformation to online learning, transformation of the publishing model, transformation of the LMS space. Where technology is merely preserving, or even strengthening, the status quo, budgets are down and money is leaving the market.

Technology for technology’s sake is a hard sell. Technology to catalyze change is a much easier sell.