July 29, 1996

It may be a sign of the times when the former
president of Sega of America, Thomas Kalinske,
leaves his job — as he announced earlier this month –
to join a start-up called Education Technology LLC.

What could it mean when the master salesman of Sonic the
Hedgehog takes the top job at a company set up to create
and buy companies that sell educational technology?

It means that some big-money players have their eyes on
what they hope is a very big market for what are called
“edutainment” products.

Education Technology was announced in March by its two
high-profile founders — Lawrence Ellison, chairman of
Oracle Corp., and Michael Milken, the former junk-bond
financier. They hope to “do well by doing good,” as
Ellison puts it, by playing the educational-products
market.

As described by Oracle, a leader in corporate data base
software, this is an $833 billion worldwide market
opportunity. But as it turns out, that number, compiled
from various sources by Oracle, counts all the costs of
providing education — salaries, books, supplies,
administration — to schools and universities,
government and corporations.

Presumably, edutainment would be a small subset. A
report on the U.S. education market, published by the
Software Publishers Association, found that for the
1993-94 school year, the latest data compiled, a total
of $2.6 billion was spent in grades kindergarten to 12
for products and services that included personal
computers, educational software and courseware, computer
supplies and telecommunications connections.

And the association projects an increase to just $4.5
billion by 1999. Nonetheless, a new batch of players is
joining the education software field, where the veterans
include Wolfram Research, whose Mathematica program
revolutionized the way mathematics is taught in many
schools; Broderbund Software Inc., and the Learning Co.

Like some of these established players, the new entrants
mean to combine education with entertainment. One
example is a company called Lightspan Partners of
Carlsbad, Calif., which has backers like Microsoft and
the cable television giant Tele-Communications Inc., and
a management that includes Hollywood screenwriters and
animators, as well as education-software executives.

Similarly, the first investment for Ellison’s Education
Technology was to buy shares in the toy company Hasbro
Inc.

“The Hasbro characters, in an educational context, have
enduring value,” Ellison said. “Mr. Potato Head might be
able to teach you arithmetic.”

But Ellison is banking on far more than Mr. Potato Head
to make education a profit center. “If we can get the
price down low enough, and I think we can, we see every
kid having a network computer at home and at school –
as common as telephones and televisions — by the year
2000,” he says. “I don’t know whether that’s realistic,
though; it make take until 2005.”

This forecast may seem incredible, considering that most
of the nation’s schools struggle to pay teachers a
competitive salary. And even if they could put a network
computer on every school desk, few schools yet have the
multiple phone lines in every classroom that such
machines would require.

Some steps are being taken to correct this situation.
Earlier this year, some 100,000 volunteers installed
network cabling in 4,000 schools around the nation as
part of a continuing program called Net Day 96. But
there are some education technology experts who wonder
whether the effort is worth the time and trouble.

The best of the educational software available today is
excellent, according to Judah L. Schwartz, a professor
emeritus at the Massachusetts Institute of Technology
and a professor of education and a co-director of the
Educational Technology Center at Harvard University.

As for the rest of it, Schwartz says, “The metaphor of
the Augean stables is wonderfully appropriate.” (In
Greek mythology, one of Hercules’ tasks was to clean the
stables of King Augeas, where celestial horse muck was
being produced at a faster rate than Hercules could
shovel it.)

But no matter how low the quality, or how high the cost,
economics may yet drive technology into the schools,
since much of the cost of education is those pesky
salaries for teachers — whose labor many people see as
a natural target for automation.

The cost of higher education has tripled over the last
decade, mostly because of teacher salaries, according to
Robert Heterick, the president of Educom, a consortium
of colleges and universities that works to integrate
technology into education.

“Today you’re looking at a highly personal,
human-mediated environment,” Heterick said. “The
potential to remove the human mediation in some areas
and replace it with automation — smart, computer-based,
network-based systems — is tremendous. It’s gotta
happen.”

The likeliest candidates include courses like basic
math, English and science, which enroll some 50 percent
of a university’s students and are at the core of any
K-12 curriculum. “If I could get a small piece of that
market,” he says, “there’s huge potential out there.”

Educators like Schwartz are not so enthusiastic.

“If you think of education as a production-line
function, to train the next generation of ‘proles’ in
the Orwellian sense, then you’re right,” he says. “It is
a big market. But the object of schooling is not simply
to transmit knowledge. It’s to get students to
participate in the making of knowledge. That’s an
essential part of the human experience.”

One industry veteran hoping that both perspectives can
eventually co-exist in the classroom is Bud Colligan,
who once led the education marketing team at Apple
Computer. He is now the chairman of Macromedia Inc.,
which produces Authorware, one of the most popular
software programs for creating computer-based training
courses.

“You want to keep experimenting and finding the great
examples of technology in the classroom,” Colligan says.
“But you want to temper your enthusiasm with some
reality about the hype.”

Denise Caruso

Copyright 1996 The New York Times Company