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 »