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Market for Education Software, Digital Products Has Grown, Analysis Shows

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The market for educational software and digital products in schools, driven partly by demands in testing and assessment, grew over the most recent year and now stands at $7.7 billion, a new analysis reveals.

The overall estimated market increased by 3.5 percent from 2009-10 to 2010-11, according to new research from the Software & Information Industry Association.

That view of the market is based on a survey of 581 educational companies selling in the prekindergarten through grade 12 market. Responses came from 105 companies, who reported $2.04 billion in revenues, from which the SIIA extrapolated the size of the overall market, based on those results.

Where did those companies do the most business? The most fertile area was instructional support, which made up the largest share of the market, 38 percent of it, at $892 million. Within that category, testing and assessment was the largest area of business, followed by professional development, according to the SIIA, a major trade association for the software and digital content industry.

Instructional content made up the next-largest share of revenues, at 36 percent, or $795 million, followed by platforms and administration, at 26 percent, or $353 million.

The association sees opportunies for growth in testing and assessment, and infrastructure in the near term. The research on the state of the industry was undertaken for the SIIA by John Richards, the president of Consulting Services for Education, a company that provides market research and analysis, among other services. His analysis was compiled in a report, the "2011 U.S. Education Technology Market: PreK-12," which SIIA makes available at a cost. The association shared some of the overall findings, which can be found in the report's executive summary, with Education Week.

The report examines the market for software and digital content. It does not include hardware—everything from computers and servers to smartphones and calculators—which would "dramatically increase the total market," according to the report's executive summary.

What's behind the recent growth in demand for software and digital content?

One factor is state and district efforts to prepare for the common-core standards and assessments, and the "growing demand for formative data and data analytics," Richards told Education Week in an email.

In addition, there's an overall emphasis in schools on shifting from print to digital resources. State policymakers are approving changes to move away from print textbooks to digital content and open educational resources, Richards explained.

Many states have "redefined, or are in the process of redefining, the terms 'textbook' and 'instructional materials' to include a wider array of options, including digital texts and material," he said.

The growth of the "bring your own device" movement, and the increased purchase of tablets for classrooms are also factors in play, Richards said. Those trends, he said, will shape "the access to and market for software and digital content."

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