Chapter Two: New Beginnings

With anger or amusement (or both), many in the campus community will recall management sage Peter Drucker's dire predictions for traditional higher education. Interviewed by Forbes magazine in March 1997, Drucker proclaimed that "universities won't survive … higher education is in deep crisis … the college campus won't survive as a residential institution … today's [campus] buildings are hopelessly unsuited and totally unneeded."

Drucker offered this assessment during that long ago era now referred to as the "Internet bubble." Education was a hot topic in the dotcom economy. Financial analysts wrote compelling reports while their investment firms convened packed conferences, all focused on online education in the new information economy. Each week seemed to bring a new press release—and an accompanying SEC filing—from yet another new dotcom that was determined to do well and good by providing better, competitive, and profitable educational programs, resources, and services on the Web.

Internet entrepreneurs and the venture capitalists funding their ambitious business plans saw great opportunities in K-12, college, and corporate education. Financier and philanthropist Michael Milken and former Education Secretary Bill Bennett were among those who invested their time, talent, money, and reputations in "dotedu" ventures. The British Open University announced plans to invade American higher education. The University of Ph'enix launched an online degree program to supplement its expanding enrollments at multiple locations across the country.

Big plans were fueled by very big bucks. Eduventures (www.eduventures.com) estimates that from 1995 to 2001, online education companies raised more than $2 billion, primarily in venture capital but also including some campus seed money. College presidents and trustees talked privately, and with great concern, about the threat the dotcoms posed to "traditional" higher education and to their own institutions. Some saw easy money, others saw serious competitors: "The train is leaving the station; we here at Old Acme have to do something, and do it soon."

New York University, Temple University, and the University of Maryland, among others, launched their own, highly publicized online initiatives. Columbia University invested more than $25 million to create Fathom, its for-profit foray into Internet education. California Virtual University, Western Governors University, and Michigan Virtual University emerged as public sector strategies to serve and seize the anticipated demand for online courses and degree programs.

And today? The British invasion failed; Fathom has folded. Cal Virtual has vanished, as have most of the dotcoms that seemed so promising. Gone are the great aspirations, high hopes, and the billion bucks (maybe more) that fueled these efforts and initiatives.

And yet, on the horizon, there is evidence that some campus and corporate dotcoms are experiencing a Ph'enix-like rise from the ashes of their highly publicized demise.

Three-fifths (62.5 percent) of the colleges and universities that participated in the 2002 Campus Computing Survey offer at least one complete online/Web-based college course. Peterson's (www.petersons.com) online directory of distance learning identifies some 1,100 institutions—large and small, well-known and less-known, public, private, and for-profit—that provide online degree programs.

The post-dotcom world of online higher education includes, among others, Azusa Pacific University (evangelical Christian), Boston University (large private), Cardean University (online, for-profit), De Anza College (two-year public), DeVry University (multi-campus, for-profit), Michigan State University (large public), and eArmyU (U.S. military).

The University of Ph'enix serves some 45,000 adult learners in its online degree program, placing Ph'enix Online among one of the 10 largest colleges or universities in the United States. (Another 125,000 adults are enrolled in the "more traditional" Ph'enix degree programs.)

And it is not just the degree providers who are beginning to do well. Course management software providers Blackboard, eCollege, and WebCT have found the path to profits. Other firms—some survivors of the dotcom demise—are gaining traction, generating revenues, and moving toward profits.

The new and surviving players are smarter and wiser, focusing on the numbers and nuances of higher education. They spend less on Aeron chairs and allocate more resources for user support.

For the thousands of adults pursuing degrees in online programs sponsored by DeVry, Michigan Virtual University, or Ph'enix Online, the Internet may be their only viable access to higher education. These enrollments represent a net gain to the system of higher education.

The second coming of Web-based higher education marks the emergence of a new sector that reflects the "bricks and clicks" détente seen elsewhere in the post-dotcom economy.

Moreover, the surviving and thriving online programs help expand access to higher education, a key goal of public policy for the last 40 years. Unknowingly acknowledging the preamble to the historic Higher Education Act of 1965, the new dotcoms—public, private, and for-profit—serve "all who might benefit" from the opportunity to attend college.

Recalling the words of Mark Twain, let us acknowledge that "word of [the] demise has been greatly exaggerated." Welcome to Chapter Two, the post-dotcom, new beginnings of Web-based higher education.

Author’s Note: Some companies cited in this column are also corporate sponsors of The Campus Computing Project.

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