Over the past decade there has been a noticeable shift within the field of education and a strong push for continued integration of technology in education. The newly-elected administration understands this world-wide shift and understands America is currently behind the curve as far as education is concerned. To combat this, the administration is concentrating its efforts on increasing the quality of America’s education, resources for required for this education, and technology in the classroom.
Thus, education IT seems to be a favorable sub-sector in the long run, and should experience growth in the future, well beyond that which it had previously seen with the emergence of the computer.
Within this subsector there are many small regional private companies along with some larger companies traded on foreign exchanges, but there are a few publicly-traded education IT companies traded on American exchanges which include Skillsoft plc (NASDAQ:SKIL), Renaissance Learning, Inc. (NASDAQ:RLRN), and Blackboard, Inc. (NASDAQ:BBBB).
Skillsoft plc provides on-demand e-learning and performance support solutions for enterprises, government, education, and small and medium-sized businesses worldwide.
Renaissance Learning provides computer-based assessment and periodic progress monitoring technology for pre-kindergarten through senior high schools and districts in North America. Its educational software products cover a range of subject areas, including reading, early literacy, mathematics, writing, vocabulary, and language acquisition.
Blackboard provides enterprise software applications and related services to the education industry. Their products allow universities, schools, and corporations to support the learning environment through online teaching. Blackboard also provides ID and debit/credit card services.
Blackboard is by far the best of these three companies as it dominates the course management market, possesses strong future growth drivers, and is the most innovative in terms of meeting the continually changing needs of its customers. I like Blackboard going forward for three main reasons: Overall educational IT trends, Innovation, and Market Dominance.
Overall Education IT Trends
Blackboard is experiencing increased demand for its product and services at all levels of education due to several factors. One such factor is the increase in popularity and reputation of online universities. Up until a few years ago, having an online degree was less impressive than one from a “brick and mortar” university.
The tides have turned however, and enrollment at online universities is growing due to job losses in a tough economy and the flexibility of online learning platforms. Online universities and colleges are experiencing double-digit enrollment growth rates that should continue well through 2010 and 2011.
Another factor is that “brick and mortar” universities and colleges are now offering more online classes than ever before. Now students can take the same courses that were previously only offered in the classroom due to increased use of podcasts and streaming video. This offers both the student and teacher more flexibility on when the class can be taught/taken and presents the same material as the equivalent class taught in a classroom or lecture hall.
In 2008 over 4.6 million students enrolled in at least one online course, an increase of 20% from 2007. This number is expected to rise by over 20+% in 2009 and grow as high as 35% by 2013.
