Apple Loses Favor

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CLIENT/SERVER

Vendors Eye Booming Education Market

By Neil Munro

Client/server work dominates the chaotic but fast-growing U.S. education market, industry and government officials say.

Roughly 15,000 school districts and 3,000 higher education institutions are banking on the technology to help them stay abreast of the information technology revolution. They will spend billions of dollars to provide client/server technology to students, teachers and administrators during 1997, industry analysts say.

"Right now there is a huge push [by educators] for infrastructure dollars," much to the benefit of companies selling client/server products as well as those selling networks, said Sue Collins, director of education for Compaq Computer Corp., Houston.

Universities have increased spending on information technology to link students to information and to libraries such as those maintained by the California State University System in Long Beach, Calif.

This demand, partly driven by widespread concern among federal, state and local officials over the state of education, and by the new network-subsidy program established early this year by the U.S. Federal Communications Commission, has ensured that "almost every integrator [is] looking at this market," she said.

But while the technology promises significant advantages for both educators and administrators, it also promises great complexity, cost and management headaches for chief information officers in the education sectors, including John Gay, CIO of Virginia's Fairfax County Public School System.

"Complexity goes through the roof and the cost of maintaining it goes through the roof," Gay said. "We've got to find a way to make it cheaper to do this."

The Market

Client/server is the technology of choice for K-12 schools and universities for the same reasons that it is favored by corporations: It links employees to each other and to vast storehouses of valuable data.

That attribute makes it the primary choice for officials working in school systems handling kindergarten through 12th grade. Back in 1992, only 59 percent of K-12 districts were working on or were planning to deploy client/server technology, according to a survey conducted by Carol Cotton & Associates Consulting Inc., a South Natick, Mass.-based education research firm. By 1996, that number had jumped to 85 percent, according to CCA data.

That trend is affirmed by Sau Lau, a research analyst for IDC Corp.'s IDC/Link research service in New York. Citing an IDC survey of officials at 5,000 schools in 2,500 districts, Lau said they expect to double their spending on network technology during the next year, from $18,954 to $34,621 per school. That spending includes money for communications-related hardware, software, training and services.

Total annual spending by K-12 schools for technology, including client/server systems, will reach $5.2 billion by the end of 1998, according to Mark Morgan, an analyst with Quality Education Data, Denver. Hardware takes up 50 percent of school spending on technology, while networks absorb 21 percent, according to QED's data.

K-12 schools will buy $4.7 billion worth of computer technology in 1997, and up to $9.4 billion by 2000, according to CCA. The estimate for 1997 predicts spending of $746 million on network hardware, $2 billion on computer hardware and $2 billion for applications software.

University students using client/server technology to access information in the California State University System in Long Beach, Calif.

Higher education institutions will spend at least $4.5 billion in 1997, including $678 million on network hardware, $1.12 billion on computer hardware, $672 million on applications software and $2 billion on services, according to CCA. Additional billions of dollars worth of computers and software will be bought by students for educational purposes.

Asked by CCA to rate the importance of various technologies, 73 percent of higher-education officials ranked client/server as very important or most important, followed by multimedia technology at 54 percent and distance learning at 49 percent.

Among school districts, client/server fares less well, with only 56 percent of respondents rating it highly important or of the highest importance. Client/server scored lower than networking (91 percent), computers in the classroom (88 percent), teacher training (88 percent) and Internet access (87 percent).

Officials at both levels of education reported to CCA that they are moving more and more tasks to client/server technology. By the end of 1997, roughly half of K-12 library and administrative applications will be running on client/server machines, while more than 60 percent of such applications at the higher-education level will be on client/server networks, according to the CCA data.

Fairfax County

These trends can be seen clearly in the Fairfax County School System, which is deploying its first client/server system this month.

Designed to store and share data about students, the new system is called the Student Information System. In operation, it links two to four computers and a server in every school to a central server, where officials can review and analyze the data about children, including their attendance, test scores, ages, addresses and other data. The $11 million project is being managed by BDM International Inc. of McLean, Va., using software from National Computer Systems of Mesa, Ariz.

Although the technology may be straightforward, the system has generated much controversy, with some parents voicing suspicions about the schools' collection and use of the data. "Clearly, it is not a technology issue," said Gay.

This system design reflects how the traditional divide between PCs in the classroom and mainframes in the administration offices is blurring as client/server technology takes over, Gay said.

The new system will provide the foundation for future improvement of the networks that link Fairfax County's school system of 150,000 students, 200 schools, almost 40,000 computers, including almost 2,500 computers used by administrators, said Gay. To run this network, Gay has an infotech budget of $20 million for 1997 and a draft technology plan that would cost $30 million per year.

This draft plan is intended to set into motion a program of long-term, continuous upgrades to the system's networks and computers, Gay said. Of his 40,000 school-based and classroom computers, only 11,000 are current models and only 5,000 are networked, he said. "We actually have the right number of computers right now, but 70 percent are too old," he said.

If the draft plan is approved, Gay hopes to replace half of the 40,000 computers with Internet-capable models over the next four years. Then the county would be in a position to replace the oldest 20 percent of the computers every year, and gradually link every computer to a client/server network and the Internet, said Gay.

Although not every computer needs to be linked to the Internet, Gay said maintenance and management will be eased by the use of standard computers, even if some are equipped with a few bells and whistles that are rarely used in the classroom.

But Gay's short-term concerns are more prosaic - fixing a five-week backlog of broken machines.

To manage his 40,000 machines and 200 servers, Gay has a staff of only 200 and a limited outsourcing budget. Although maintenance of the older machines is relatively straightforward, increasing reliance on networked client/server machines greatly increases the maintenance and management burden.

Which explains why Gay's lack of maintenance manpower has prompted Fairfax County's 200 schools to assign numerous teachers or teachers' aides to maintenance tasks. Such use of teachers is "very inefficient, but they do it for survival," said Gay.

To help fix the problem, Gay underwent a grilling by the school board before they granted him an extra $1.5 million to hire 30 new computer-maintenance technicians for 1997. The board also gave him $480,000 July 24 to hire outside contractors to fix the five-week backlog of faulty machines.

However, the board rejected Gay's original plan that sought $4.3 million to hire 64 technicians.

The difficulty of maintaining 40,000 PCs underscores the importance of new efforts to reduce maintenance costs being pushed by Microsoft Corp., Oracle Corp., and other companies, said Gay.

However, the new lower-cost client/server technology, dubbed Network Computers or Network PCs, needs a very reliable and high-capacity communications network, he warned. Until that network is in place, Gay said he would not invest in NCs.

Higher Education

One of the main reasons why the states' higher-education institutions are investing so heavily in client/server technology is that they are trying to prevent other universities and - even private companies - from poaching their students, especially students majoring in computer technology and the sciences.

"That's a legitimate concern," which is forcing higher-education institutions to modernize rapidly, said Carol Cotton, president of Carol Cotton & Associates Consulting Inc. Higher-level education is particularly vulnerable, she said, because about 50 percent of universities' revenues comes from only 25 percent of its courses, such as English 101 or Math 101. The universities would be badly hurt if a high-tech consortium were created to sell similar courses prepared by top-notch professors and delivered via online services, she said.

The California State University System, based in Long Beach, Calif., offers one example of how universities are fighting back. To build a $400 million systemwide network, the 23-university system will select one of three competing teams in early September. The three rival consortiums are led by IBM Corp. of Armonk, N.Y., Ericsson Inc. of Richardson, Texas, and GTE Corp. of Stamford, Conn. IBM has allied with Lucent Technologies Inc. of Murray Hill., N.J.; AT&T of Basking Ridge, N.J.; and Pacific Bell, while Ericsson has allied with Sun Microsystems Inc. of Mountain View, Calif., and Oracle Corp. of Redwood Shores, Calif. GTE's team includes Microsoft Corp., Fujitsu Network Communications Inc. of Richardson, Texas, and Hughes Electronics Corp. of Los Angeles.

This contract could build the foundation for a more lucrative partnership between the universities and the winning team, promise California university officials.

For example, the companies could use the networking contract to sell additional computers, software and training services to universities, students and California and other states, while the universities could use the networks to export their education services to students around the world, these officials say.

Thus, California university officials have high hopes that the state's emerging online university, dubbed the California Virtual University, will provide a gateway to the international education market. The California online university will use a Web page and expensive marketing to help California's universities recruit online students worldwide, said Joe Rodota, Wilson's deputy chief of staff.

"If the universities choose to, they could become leaders" in high-tech education, including online education, said Cotton.

State governments are likely to support such high-tech efforts if they bring in students from out of state and protect local universities and colleges, Cotton said. "I don't think [California officials] will have a whole lot of problems with [the University of California at] Berkeley stealing students from Utah state," she said.

However, California's state universities must compete with private universities, as well as high-tech companies and foreign universities, all of which could use the client/server and online technology to sell their education services worldwide, she said. The technology will ensure that the education business "will become much more competitive on a global basis," she warned.

Systems Integrators

All this money and management attention has caught the notice of systems integrators, software developers and computer vendors, such as Compaq, Dell Computer Corp. of Austin, Texas, and Gateway 2000 of North Sioux City, S.D., said Lau. "They are putting their eggs in this basket," Lau said.

But Gay has a more jaundiced view. "You don't have an integrator. The closest thing you have is people who bundle things," he griped.

Compaq has allied with its 600 resellers to provide a systems integration service to all 110,000 school buildings nationwide, said Collins. This allows Compaq to sell a full product line, ranging from hand-held computers to high-capacity servers, plus training, applications software and services, she said.

"What the customers see is a fully integrated package," she said.

But for Gay, a bundled package is not enough. He already works with systems integrator BDM, and relies on hardware warranties and a few smaller companies for much maintenance, but would like to see large companies offering a full range of services that are backed up by a track record of success.

But integrators may be slow in arriving, Cotton said. Limited school funding, local politics and the political strength of the teacher unions, may deter systems integrators from entering the marketplace, she warned. If they don't see much money, or the opportunity to reorganize school operations to free up profits, they may instead pursue systems integration opportunities in other sectors of the economy, she said.

Apple Loses Favor

Apple Computer Inc.'s domination of the education business is sliding fast, according to industry executives and school officials.

By June, the 4.5 million Windows-based PCs held a 53 percent share in the K-12 market, comfortably outnumbering the 3.9 million machines from Apple Computer Inc. of Cupertino, Calif., and its various licensed hardware vendors, according to a survey of district officials released in June by Carol Cotton & Associates Consulting Inc., a South Natick, Mass.-based firm that studies the information technology educational market.

Worse for Apple, according to CCA's data, is that school officials estimated that 68 percent of the 896,000 computers they will buy during 1997 will be Windows-based PCs. That's up 8 percentage points from 1996, much to the delight of executives at Windows' owner, Microsoft Corp. of Redmond, Wash.

Quality Education Data of Denver predicted in a July 29 report that Apple's share of the K-12 market will drop from 43 percent to 33 percent by the end of the 1998 school year.

But these are only forecasts, not real purchases, said Jacob Kandathil, Apple's director of market for the education division.

"Our business trends are doing pretty well compared to last year," Kandathil said. For example, Apple recently sold $12 million worth of computers to New York state schools, in a program that may grow to $40 million in value.

Apple's share is being driven down by declining faith in Apple's future, the improved quality and variety of Windows software and the network-management problems for school technology managers caused by two different operating systems.

For now, Apple's computers provide the bulk of the 37,000 machines used by the Fairfax County Public School System, according to John Gay, the system's chief information officer. These machines are mostly used in the district's science laboratories and elementary school classrooms. However, the number of Apple computers will decline sharply because they lack good networking technology and use a different operating system that increases the management burden, Gay said.

And the makers and sellers of Windows-based PCs, such as Compaq Computer Corp. of Houston are doing their best to accelerate the change, partly by providing software that helps teachers transfer their existing work from Apple's operating system into the Windows operating system.

"What we are trying to do is protect their past investment in materials as they move to a Windows environment," said Sue Collins, director of education for Compaq.


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