An article by Katie Ash in Education Week about a new report by the investment bank, Berkery Noyes, caught my eye recently because of its analysis about the education technology market. According to the piece, “companies focused on technology-based instruction and tools for data collection and analysis are thriving in the K-12 market.”

But beneath this, there are some important layers of nuance that seems to clarify what many education technology companies are seeing on the ground.

On the one hand, a whole series of education technology companies say the current budget crises are hurting their businesses. According to the article, if you are in the business of providing such things as supplemental content, then that is indeed the likely reality of your world.

Our own theories would suggest that companies offering one-off learning games or “the best” math activity that complements the main curriculum—in other words, companies that do not offer a full course worth of curriculum—will struggle to sell into public schools because their business model will remain challenged in the current environment. (Of course, companies like Motion Math and Bent Castle Software (with their Numbers League app) may have found a way around this with their low-cost, direct-to-consumer mobile apps strategy–but stay tuned).

On the other hand, several digital learning companies report to me that the budget crises seem to have driven an up-tick in their businesses. And according to the report, there’s an explanation for that. If you’re doing something more disruptive—online learning and technology-based intervention, for example—those budget crises haven’t affected you, and as we argued in Disrupting Class, might actually accelerate growth, as this is one factor driving the growth of online learning more generally.

Vivek Kamath, the managing director at Berkery Noyes who specializes in the education market, adds further fuel to some of our own past observations when he is quoted in the article as saying that companies that offer integrated services will likely thrive, whereas those that are offering limited niche solutions will struggle. As Heather Staker and I wrote in “The rise of K-12 blended learning,” “In the early days of most new products and services, the leading providers tend to be vertically integrated and offer products with proprietary, interdependent architectures. … The dominance of companies like K12, Inc. and Connections Academy to this point shows that the K–12 online-learning industry is no different.” Our own interviews with schools for that report revealed that integrated offerings were still very much in high demand.

Even for the disruptive companies, however, the report does caution one other thing—which again, is consistent with my recent blog that asked if we were in the midst of an online learning bubble. The caution is that companies selling into public school districts and states are still selling into a highly politicized space with long-buying cycles and all the rest (others have written about this extensively). And despite all the hype, this reality has not fundamentally changed.


  • Michael B. Horn
    Michael B. Horn

    Michael B. Horn is Co-Founder, Distinguished Fellow, and Chairman at the Christensen Institute.