E is for Efficiency

Eduventures’ annual study looks at postsecondary institutional purchasing.

THE BOSTON-BASED research firm Eduventures Inc. (www.eduventures.com) studies annually what it terms “postsecondary solutions”—hardware, software, and services purchased by postsecondary schools, where the customers are principally institutions rather than individuals. While not inclusive of all products and services purchased by higher education, the strategic nature of the solutions studied makes them good indicators of overall marketplace directions.

The 2004 study analyzed eight markets and market segments from the broad categories of content, infrastructure, and services. Eduventures characterized the postsecondary learning market in general as still “taking a pause” as it recovers from a cyclical low point experienced after a strong wave of adoption in 1999 and 2000. Yet, even minor differences in growth forecasts among market segments hint at an industry gearing itself up for improved efficiency.

Customizing content. Eduventures forecasts that custom publishing, while a smaller part of the content industry, will take the lead, in terms of growth rate, over more traditional textbooks and publishing of reference works. It is still an emerging market in an otherwise mature industry and represents a more service-oriented model. It includes both print and digital formats, but with a growing percent of materials delivered in digital form, custom publishing is fertile ground for publishers’ innovations. Eduventures asserts that publishers will increasingly seek revenues from digital materials, and aggregating, bundling, and customizing content—especially facilitated by digital formats—creates value for institutions.

Infrastructure for eLearning. The name of the game has changed as institutions turn their attention to eLearning systems. Overwhelmingly, students arriving on campus with their own notebook computers will all but eliminate any growth in institutional desktop purchases, leaving institutions free to concentrate on wireless networks and collaborative work environments. Interestingly, within the modest growth forecast for computing hardware, high-performance and grid computing will post stronger than the market for servers. The largest share of infrastructure growth will be in eLearning platforms, especially as institutions look to leverage next-generation functionality and enterprise scalability in the course management system (CMS).

Administrative and professional services. Eduventures’ findings indicate that a range of outsourced services associated with administrative operations will enjoy steady growth, as institutions reach to increase customer service levels and offer enterprise applications. Enrollment management has already emerged as a key segment in this category, and with time, functions like financial aid, human resources, and a wide array of administrative systems will be on tap through integrated product suites from outsourcing partners.

Revenues (Millions) 2003 2007F Forecast
CAGR
(2004-2007)
Content
Textbooks $3,391.0 $3,598.2 1.5%
Custom Publishing $482.4 $836.3
11.1%
Reference $990.0 $1,066.1 1.9%
Infrastructure
ERP $976.7 $1,282.8
5.2%
eLearning Platforms $154.3 $288.8
11.4%
Systems Integration
& Technology Services
$764.3 $1,103.8
7.3%
Computer Hardware $3,196.1 $3,459.6 1.5%
Services
Administrative &
Professional Services
$1,199.0 $1,731.6
7.3%
Total $11,153.8 $13,367.2 3.7%
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