Industry says it makes sales, makes a difference


When challenged about their focus on selling to struggling districts, education software executives respond with vehemence. They focus their efforts on troubled schools not only to make sales, they say, but to make a difference.

In seeking out schools in isolated places such as Logan, W.Va., said Plato Learning Vice President John C. Super, his company is simply trying to make its products available to as many students as possible:

"We may judge results on profit, but we're there to serve education. If education is occurring in a building with 120 students, we'll be there, because that's our mission."

Used the right way, executives say, their computerized programs can have a transformative effect on struggling students and failing schools. They can individualize instruction by allowing students to proceed at their own pace in those areas where they need the most work, rather than sit lost in class.

They offer the reinforcement provided by a traditional workbook, executives say, with the added benefit that students can know instantly whether they got an answer right or wrong. And the programs' multi-sensory features - audio responses, colorful graphics and video game-like scenarios - make their tutorials and exercises more interactive and engaging than traditional textbooks and workbooks.

"By using our kind of product, you allow teachers to change the way they work," said Plato Learning CEO John Murray. "Instead of becoming a stand-up deliverer of information to the masses, they can tailor information to the student that needs it."

For teachers and administrators, executives say, the programs are valuable in an era of high-stakes testing because content can be correlated to the standards that students are being tested on. The programs facilitate "data-driven decision-making," by frequently re-assessing students and letting educators see what subject areas need more attention, or which students are lagging behind, in advance of the big annual tests.

"It's all about giving teachers actionable data against state standards," said Brad Onken, president of McGraw-Hill Digital Learning.

The $2.3 billion industry includes dozens of companies, some of them tiny start-ups offering highly specialized products. But it is dominated by a handful of large companies.

The industry leaders include companies that focus almost exclusively on education software, such as Plato Learning, Riverdeep and Renaissance Learning, and others where education software is part of a larger enterprise, including Pearson, the publishing conglomerate, and LeapFrog, best known for its electronic toys.

Some companies, such as Plato, have been around for several decades, often under different names. Others are new arrivals, such as Ignite!, founded in 1999 by President Bush's brother Neil Bush to sell U.S. history software. (Social studies is not tested under No Child Left Behind, which means that Neil Bush, whose company's reliance on wealthy Arab investors has drawn attention, is not benefiting directly from the law signed by his brother.)

Despite the sales boost the industry has enjoyed since No Child Left Behind, many companies have not seen comparable success in the stock market. Analysts say Wall Street is looking for the industry to consolidate further and remains impatient with the unpredictability of school spending decisions.

At the same time as the industry seeks to satisfy the market, though, its leaders insist they are driven by an equal desire to help improve education.

"If you were a technology person wanting to make a big profit, education may not be the first business you'd go to," said Mark Schneiderman, who represents the industry in Washington for the Software and Information Industry Association.

Sun staff researcher Paul McCardell contributed to this article.

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