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Report Identifies Opportunities, Challenges for Ed. Technology Market

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Companies that want to sell successfully to the K-12 market will need to be more creative and focused on results as they present their technology products to schools and districts nationwide, according to the findings of the "2013 U.S. Education Technology Market: PreK-12" recently released by the Software & Information Industry Association.

Citing the increased sophistication of education leaders, the report's authors say district officials are "not looking for companies to sell them technology products, but are instead looking for partners who understand their challenges" and can help provide matching solutions.

"Increasingly, local decisionmakers are looking at technology not as a distinct budget item, but as a means to more efficiently and effectively address core goals and needs throughout their budget," the report indicates in the executive summary.

This is the third annual vendor survey by the SIIA, looking at the education technology market, which grew 2.7 percent from $7.76 billion in 2010-11 to $7.97 billion in 2011-12. The market has increased a total of 6.4 percent over the three years that the association has been conducting the survey.

States and districts will need more content aligned with the Common Core State Standards, and there will be "much more demand" for formative data and data analytics, write the study's authors, John Richards and Rhonda Struminger of Consulting Services for Education, a Newton, Mass.-based firm that advises education companies.

At the same time, as districts switch from using paper tests to online assessments, the authors say student preparation increasingly requires a digital curriculum, which presents ongoing opportunities for educational technology firms.

Finally, increases in the "bring your own device" or BYOD approach to instruction will require district investment in platforms and administrative and IT infrastructure.

This last investment area proved to be one that took a hit in 2011-12. Sellers of these administrative tools reported a 32 percent decline in revenues, said Richards when he announced preliminary findings from his study last month, noting that he cannot account for the "why" behind that reversal.

The authors identify funding constraints from a weak economy, and a decline in government spending on education, as potentially significant challenges to the marketplace.

SIIAContentChangeOver2Years.JPG

Source: 2013 U.S. Education Technology Market: PreK-12

Other findings of the study:

  • Content revenue grew almost 20 percent, with increases in every area except reading and English/language arts, which is the largest segment of the content market.
  • Revenues for special education products were the highest in a special category that included products for English-language learners, Advanced Placement students, online courses, special education, and instructional improvement systems.
  • Online course revenues grew 200 percent.

Identifying a universe of 722 businesses that sell education software, content and services to the pre-K-12 market, the researchers received responses from 122 companies and extrapolated to produce estimated market data. Preliminary findings of the report were released in December at the Business Education Forum of the SIIA Education Division. The full report is available here. The next survey from the SIIA focuses on educators' perspectives; they are invited to respond to the annual Vision K-20 survey



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