2002 K-12 Trends of Note George Warren Diana Richie Christian Childs.

2002 K-12 Trends of Note2002 K-12 Trends of Note2002 K-12 Trends of Note2002 K-12 Trends of Note

George Warren Diana Richie Christian ChildsGeorge Warren Diana Richie Christian ChildsGeorge Warren Diana Richie Christian ChildsGeorge Warren Diana Richie Christian Childs

Trends and Emerging ConceptsTrends and Emerging ConceptsTrends and Emerging ConceptsTrends and Emerging Concepts Big Growth for K-12 – 1:1 computing coming soon.Big Growth for K-12 – 1:1 computing coming soon. It’s all about the handheld!! Price points still too high.It’s all about the handheld!! Price points still too high. E-education systems are still very mis-understood.E-education systems are still very mis-understood.

– We have the chance to define e-education in the marketWe have the chance to define e-education in the market– Equity investments have been targeted at this goalEquity investments have been targeted at this goal

Framework for digital content is critical for 1:1.Framework for digital content is critical for 1:1.– MS Encarta Classroom Server MS Encarta Classroom Server – Other content providers developing their own frameworkOther content providers developing their own framework

Block Grant funding will alter how schools acquire Block Grant funding will alter how schools acquire technology – and how funding is reported against. technology – and how funding is reported against. Unclear how this will impact us, but likely to be good.Unclear how this will impact us, but likely to be good.

Why Handhelds?Why Handhelds?Why Handhelds?Why Handhelds?

Price pointPrice point MobilityMobility FunctionalityFunctionality Children are comfortable with the Children are comfortable with the

form factorform factor Lower costs than Lower costs than

desktops/notebooksdesktops/notebooks Lower price point, but much higher Lower price point, but much higher

volumevolume

Handheld issues that need addressedHandheld issues that need addressedHandheld issues that need addressedHandheld issues that need addressed

Small screenSmall screen Lack of input deviceLack of input device Battery lifeBattery life Security concernsSecurity concerns

iPAQ H3650 – If this is not the device that iPAQ H3650 – If this is not the device that gets us to 1:1, then it looks very closegets us to 1:1, then it looks very closeiPAQ H3650 – If this is not the device that iPAQ H3650 – If this is not the device that gets us to 1:1, then it looks very closegets us to 1:1, then it looks very close

USA Today 5.8.2001

"At River Hill, the experiment grew more quickly than expected -- from a single English class in October to the entire ninth grade now. With a 15-minute lesson, nearly all students and teachers were able to master the device. Glitches were tamed early: Cloudy days often interfered with cellular reception, so they switched from Palms to Compaq iPaqs, whose wireless network system is unaffected by weather."

1:1 Computing in K-12 Education1:1 Computing in K-12 Education1:1 Computing in K-12 Education1:1 Computing in K-12 Education

Education market is Education market is NOTNOT saturated saturated– Immense growth potential – 10:1 Immense growth potential – 10:1

student to computer ratiostudent to computer ratio

Certain price point must be achieved to Certain price point must be achieved to facilitate move toward 1:1 computing facilitate move toward 1:1 computing

– Unique opportunity to use volume to Unique opportunity to use volume to increase revenues even with dramatic increase revenues even with dramatic drop in AUPdrop in AUP

1:1 computing = BIG market growth and 1:1 computing = BIG market growth and service opportunitiesservice opportunities1:1 computing = BIG market growth and 1:1 computing = BIG market growth and service opportunitiesservice opportunities Our analysis correlates student to PC ratio growing to 1:1 Our analysis correlates student to PC ratio growing to 1:1

within 5 years/8years/10 yearswithin 5 years/8years/10 years– While popular market trends suggest a decrease in While popular market trends suggest a decrease in

hardware spend – we think just the opposite.hardware spend – we think just the opposite.– Schools and parents want the movement to 1:1. We are not Schools and parents want the movement to 1:1. We are not

close – and schools are not ready for full blown IT.close – and schools are not ready for full blown IT.– Thin/Slim client technology fills the current need nicely.Thin/Slim client technology fills the current need nicely.

Current IT infrastructure in schools are not ready for Current IT infrastructure in schools are not ready for notebook implementationnotebook implementation

– Notebook Network schools typically difficultNotebook Network schools typically difficult– Notebooks are not designed for rigors of classroomNotebooks are not designed for rigors of classroom

AssumptionsAssumptionsAssumptionsAssumptions

Average Unit Price (AUP) is currently $1200Average Unit Price (AUP) is currently $1200 Decreasing AUP based on 60% straight line Decreasing AUP based on 60% straight line

decline over 8 yearsdecline over 8 years Current ratio of students to computers is 10:1Current ratio of students to computers is 10:1 Total spent on IT based on 4% increase per yearTotal spent on IT based on 4% increase per year Percentage spent on Hardware based on 5% Percentage spent on Hardware based on 5%

decrease in expenditures from year to yeardecrease in expenditures from year to year

Projected IT and Hardware SpendingProjected IT and Hardware SpendingProjected IT and Hardware SpendingProjected IT and Hardware Spending

Total IT and Hardware Expenditures

Total IT Expenditures

Total Spent on HW

-

2,000,000,000

4,000,000,000

6,000,000,000

8,000,000,000

10,000,000,000

2001 2002 2003 2004 2005 2006 2007 2008 2009

Time

Do

llars

Sp

ent

Total IT Expenditures Total Spent on HW

Projected Revenues for K-12 Market Projected Revenues for K-12 Market Moving to 1:1Moving to 1:1Projected Revenues for K-12 Market Projected Revenues for K-12 Market Moving to 1:1Moving to 1:1

8-Year Revenue Projection for 1:1 Market

0

2,000,000,000

4,000,000,000

6,000,000,000

8,000,000,000

10,000,000,000

12,000,000,000

2001 2002 2003 2004 2005 2006 2007 2008 2009

Time

To

tal

Rev

enu

e

0

200

400

600

800

1,000

1,200

1,400

AU

P

Mkt Rev Going to 1:1 IT Budget Spent on HW AUP

BonusPointsBonusPointsBonusPointsBonusPoints

K-12 CommunityK-12 Community– Powerful tools for communication, collaboration Powerful tools for communication, collaboration

and continuous improvementand continuous improvement

Customer RewardsCustomer Rewards– Customers earn points to be redeemed for Customers earn points to be redeemed for

Professional Development, Educational Software, Professional Development, Educational Software, Teaching Supplies, and Tools for Managing Teaching Supplies, and Tools for Managing Student PerformanceStudent Performance

Web-based technology planning and Web-based technology planning and assessment toolassessment tool

Developed by tech planning expertsDeveloped by tech planning experts Provided by Compaq at no cost Provided by Compaq at no cost Assess effectiveness of your tech planAssess effectiveness of your tech plan Templates for building complete technology Templates for building complete technology

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