Long before NCLB, urban school districts "outsourced" tutoring to Tile I students in "pull-out" programs. Sylvan Learning System's contract services division comes to mind. The services offered by SES providers today represent a "forced" outsourcing of teaching and learning activities most school district would prefer to keep in-house. A new twist on this outsourcing is American tutoring firms' decisions to outsource "live" online tutoring to Indian firms. Yes, some already "sell into" the US market directly, but the business arguments for partnering with an American firm are compelling.... The principal issues for US firms have nothing to do with cost - that's a "no-brainer." Your editor would argue that the challenge of providing value ("results at a price") in this market will drive every tutoring firm to a mix of "on-site/online" and "human/artificial intelligence" services.... The first issue is quality assurance - manageable but an ongoing operations challenge. The second is political - the consequence of outsourcing American professional jobs overseas is a point teachers unions have already made and an issue where they will find some sympathy in the electorate. But the most important is strategic - if American firms have the advantage now because they control the entre to the U.S. market, the better the services provided by the foreign firms (and every U.S. firm will want the highest quality foreign partner), the more likely the balance of power will shift in their direction. Their alternative to continuing the relationship will be going directly to the client base. For this reason, the smart U.S. firm probably wants the foreign firm to be an equity partner, and every smart firm probably wants some kind of relationship with a foreign partner. Management - and investors - should start seeing a foreign buyout as one plausible exit strategy of the several they ought to pursue. Remember that the highest payout will go investors in the SES provider with the best alternatives to any negotiated agreement its board might consider.   more »

The turmoil continues....   more »

Sometimes philanthropy is helpful to the point of buying our programs for schools. At other times, philanthropic intiatives compete with school improvement providers by offering districts "free" programs. At other times, they complicate the lives of firms with classroom initiatives that conflict with the specific kinds of support and cooperation providers need from their "partners" in the central office and classroom to achieve superior program results. In this case, how will the Kellogg Foundation]s $10 million grant to improve reading skills in Hawaii affect schools implementing America's Choice? Every, providers' local managers need to keep track of these "school reform" initiatives, so they don't come as a surprise degrading implementation and hence expected student outcomes.   more »

Here in the U.S., LightSpan - now part of PLATO, used the PlayStation system for a program sold into the Comprehensive School Reform Demonstration Program market in the late 1990s. Not only did it leverage existing home gaming technology "simple enough for parents," but it deliberately engaged them in their children's education - building a level of parent support for a classroom-based literacy program this writer never saw before, and has not seen since. Can Sony repeat this?   more »

The distinction between the providers district like and dislike has very little to do with tax status, and almost everything to do with whether the provider competes with them for students or works for them with students. The school improvement industry needs the competitors to motivate the districts to do things differently - including buying the new providers' programs. But most individual school improvement providers will be far more profitable working with districts as partners than against them as adversaries.   more »

The Oregon Department of Education gives a bit more of its story on the dispute with Vantage, and hires nonprofit research organization AIR (American Institutes of Research) for next year's TESA administration.... The corporate website of Vantage Learning lists no press releases on the dispute. To paraphrase George Bush I, that decision "doesnt seem prudent."... Vantage counsel did speak to Education Week Reporter Andrew Trotter, but make note of the reporter's decision to cast the story as Vantage "leaving the state in the lurch" rather than, say, "being denied $4.7 million dollars in payments owed by the state." Both characterizations tend to prejudge what looks to be a legitmate business dispute - complicated by the end of a multi-year contract and Vantage's failure to win the new competition. But the underlying issue is now a matter for the courts. In the American legal system the facts and the law here are not decided but in dispute, and it is a bit unfair for Education Week to permit one of its reporters to pre-judge Vantage as straight reporting. The more legitimate place for this opinion is an Op/Ed page.   more »

Caveat Emptor: One should take the attached pronouncement from an investment banking firm that helped take Educate (including its Supplementary Educational Service provider Catapult Learning) private, on a compilation of largely anectodal and qualitiative "good news" items prepared by the Education Industry Association, on behalf of its members in the SES business, and labeled as a "report" - with a grain of salt. It's just a bit self-serving all around. Frankly that assessment is preferrable to one that says Signal Hill is naive about the political risks associated with SES as part of NCLB, as implemented by the states, or as received by school districts, to say nothing of the considerable cost and other advantages that accrue to local providers able to risk very little while leaping exceptionally low barriers to entry. Asserting that SES "has always been among the most popular aspects of the law, and arguably the most secure" is a flight of fancy. At this time of NCLB reauthorization there is a good policy story about SES to be told, and spinning it as PR makes it that much harder to tell. And if that story isn't told?... Well there are thousands of ways in NCLB to make SES an unattractive investment. Please, let's stop acting like Pollyannas, get serious about facing the political risks in our market, and start talking about how we intend to work towards managing them.    more »

A story we overlooked - Vantage cancels contract in billing dispute but keeps working with state, then its testing system gets overloaded and fails. Bad news for Vantage. Lessons Learned: No good deed goes unpunished? Nobody wins but the lawyers?   more »

First state-wide distribution of unitedstreamingplus. Question: Does this pre-empt or complement potential district-level sales of similar content?   more »

Buy Rating.   more »

This was not the best week for several public firms in the school improvement industry.   more »

Delayed SEC filing and finance staff turnover - chicken and/or egg?   more »

A school improvement company betting on "true research-based solutions."   more »

If student performance matters to the state of California and the state's press, why do OFY's outcomes get less attention than its' financial disputes with the state?   more »

An up and coming assessment competitor?   more »

In a move emphasizing "category management"....   more »

Just before going private, Edison purchased urban EMO LearnNow - the first EMO founded and managed by African-American executives - and put on a full-court press to win school management contracts in Philly and nearby Chester-Upland. Both were moves to gain "street-cred." The purchase of LearnNow to impress Philly, the school contracts to impress Wall Street. They were insufficient to keep Edison a public company. But the now privately-held firm put so much of itself on the line in Philly that it is hard to see how it can rebuild confidence with public education buyers of its services if it is seen to fail here. A rejection of Edison by its former champions - Vallas and the SRC - can only be bad news. (And when Edison "catches cold", the rest of the school improvement industry is "starved" for investment cash.)   more »

Charter Management Organizations are latest education reform trend to be surfed by venture philanthropy.... The Gates Foundation and others have committed $65 million to CMO KIPP for 42 new charter schools in Houston. At over $1.5 million per new school, and with an ongoing need of $1000 per student per year from philanthropy, it is not a scaleable model for the charter movement as a whole - and the opportunity costs in terms of the stand-alone charters that will not be formed - and could be formed for far less - are huge. It is also incredibly suspicious that literally none of these nonprofit CMOs reveal their business plans, financial models or detailed operating statements.   more »

No, it's not K12, but what is it about these schools that attracts investigative reporting? In this case it is - yes, conflicts of interest. At least as important, what are the quality virtual providers doing to improve the perception of their industry segment?   more »

RMC is a partner in the Northeast Region and Islands Regional Laboratory. "Conflict of interest" was written all over the Department of Education's contract with RMC for support of Reading First, and in flashing neon. The fact it was approved suggests that officials far more senior than Chris Doherty did not review the contract, did not understand the meaning of the term, or did not care. None of these options is acceptable. At the heart of market regulation in a free society is the notion of a level playing field - unbiased application of the rules. The Reading First fiasco underlines how far the Department has to go before it can claim such competence. From the enclosed article - Richard A. Allington, past president of the International Reading Association: “The e-mails between (former federal Reading First Director Christopher J. Doherty and G. Reid Lyon, the former chief of the reading-research branch of the National Institute of Child Health and Human Development) illustrate that at least these two people knew which consultants/reviewers were ‘appropriately’ aligned with their vision of Reading First…. And they knew they should mask any overt ideological moves to name people or products (as evidenced by their e-mails to each other on this very topic). Are we to believe that [they] didn’t know about the conflict of interest with the center directors and consultants?” The I.G. reports only went so far into the matter. Congress needs to go deeper into the details and higher up the food chain. And the school improvement industry - the firms that truly care about results trumping marketing budgets need to get behind the injured organizations.   more »

Two Points: 1) K-12 education's key teaching and learning functions are opening up to private sector involvement. The system is moving from a vertically integrated state-run monolith to more of a market. In this transition, each of the organizations holding a lab contract will have to decide how many sides of the buyer-seller-regulator-evaluator table it can safely occupy. None can hope to "do it all" and do any well - legally, ethically, or professionally, or as a matter of internal culture. As lab contractors decide whether they fit in the emerging market, expect a sorting out of roles and functions by each over the next three years, with units shed and acquired - maybe even traded, staff leaving to form new enterprises - possibly spurred by inevitable conflict of interest complaints. 2) The Department of Education is hoplessly tangled up in dealing with this market transition. It wants "quick and dirty" and "scientifically-based" from the same organizations, and arguably in the past most have not done either. It wants program evaluation but it also wants the dissemination of best practice - and that's a recipe for conflicts of interest. The right approach? One function, one contractor.   more »

A policy advocacy group adds important school improvement industry firms. But this is also another example of our industry's balkanized policy and advocacy efforts.   more »

When school contracting is based primarily on the political need of a district to demonstrate "reform," the primary risk to the revenue stream is "poltical risk."    more »

From the press page of every provider we cover, hotlinked to the source. If your firm isn't here - it should be. Let us know, so we can initiate coverage.   more »

Somatic Digital Launches TouchBook ™ platform. Worth a quick look.   more »

What happened to former CEO Allison Duquette? There isn't anything on the firm's website   more »

NComputing says so....   more »

The NCLB SES program is a classic example of structural market fragmentation. Yes, there are big(ger), perhaps impersonal, firms, but a good deal of work is being done by local educator/entreprenuers. There are also some interesting cost structure issues when comparing local for profits, nonprofits, districts and national for profits - and onsite v. off-site v. online. Then there's the issue of students getting the same pool of teachers they see during the day. Does this matter - good, bad, neutral, it depends? In all, a lot to think about when considering program efficacy and value. And all touched on in one article.   more »

Good press for Virtual High and Apex   more »

A bad spin on a reasonable, above-board decision by the School Reform Commission. Not a good story for any Education Management Organization (or Charter Management Organization) when the system is hurting for cash. A good example of the political risk of investing in the school improvement industry.   more »

And RMC accepts fault... The last IG report, but probably not the last work on the Reading First fiasco. A failure of process, but process matters when the subject is regulations to implement a program intended to opening a static marketplace to competition based on results. The quesation remaining is whether the Department of Education has the capacity to regulate our emerging school improvement market.   more »

Another firm caught between giant publishers and tiny firms with the advantages of neither and the drawbacks of both?   more »

Stuck in that horrible place between the big publishers and the tiny specialists, with the advantages of neither and the handicaps of both....   more »

Brenda Raker. former president of The Greaves Group   more »

Math Course Designed to Prepare High School Students for Washington State Exit Exam   more »