Edison jumps into online learning

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Jul 23, 2008

In a telling sign of the growth of and the potential for online learning, for-profit Edison Schools Inc. has jumped on the bandwagon with the acquisition of Provost Systems Inc., a company that offers online courses and online learning management tools for schools, according to a July 1, 2008 article in Education Week.

Edison will also change its name to EdisonLearning to reflect its expansion beyond its controversial management of public schools. It will be able to offer online courses to students directly, as well as through existing schools and districts. According to the article and Edison’s CEO, Terry Stecz, Edison wants to become “the preferred partner for large urban systems, states, or cities.”

The article quotes Trace A. Urdan, the managing director of Baltimore-based investment bank Signal Hill Capital Group LLC, and a longtime analyst of the for-profit education industry, as saying that although “Edison’s new direction might not be motivated by a desire to minimize controversy, it could very well have that effect.”

“They started at the much more difficult end of the spectrum, and now they’re moving into the less controversial, arguably easier end,” Urdan said in the article. “It’s getting away from the idea of, ‘We’re here to do what you do better than you do’ and into, ‘We’re selling you something you need and don’t have.’”

This insight is a classic hallmark of disruption—and stands in sharp contrast to Edison’s initial approach, which was not disruptive. As Disrupting Class chronicles, disruption takes a simple product that is “good enough” and offers it in a place where the incumbent in a market place, in this case public school districts, are relieved that they don’t have to offer the product or service themselves.

Generally this happens as entrants target “non-consumption,” places where consumers have literally no other option, so the incumbents weren’t planning on offering them something anyway. As we argue in this book, this is precisely how and where online learning has gotten its start.

And there’s evidence that school districts are thrilled to be offering the options and moving more courses online. Just look at my previous post that quotes representatives from the LA and Chicago school districts if you want evidence. These are among the biggest and most troubled school districts in the country, and clearly they enjoy the disruptive approach of online learning.

Michael is a co-founder and distinguished fellow at the Clayton Christensen Institute. He currently works as a senior strategist at Guild Education.