5 companies that profit from the education industry
How tech companies change the educational landscape and how they make money from it.
As a teacher and IT specialist, I'm deeply involved in technology and software, both in and outside the classroom. Staying up-to-date with the latest innovations, applications, and possibilities is important. To achieve this, I attend interesting guest lectures, visit companies, undergo training sessions, and maintain an ever-curious mindset.
Now, to steer towards today's topic. During my recent trip to the capital of Denmark, I gathered a ton of ideas and inspiration. I'd like to jot down these ideas for myself and share them with you.
Companies in education
To comprehend why the education sector holds allure for businesses, let me briefly explain how this works in most countries.
Apart from private schools, the majority of educational institutions receive government subsidies. Residents contribute through taxes, and a portion of these funds is allocated across various regions. The subsequent process varies somewhat by country, but in general, regions, and municipalities receive the funds and distribute them to schools as they see fit. Whether a country allocates funds based on student numbers or the size of the institution is not what matters now; what matters is that schools receive financial funds from governments, which possess considerable resources. And it's from this pool of funds that many companies eagerly seek a piece.
5 Companies inside the educational system
There are hundreds, if not thousands, of companies trying to establish a foothold within educational institutions around the world each year. From software for student tracking systems to digital board software, administrative software, or educational games. Or what about hardware: iPads, Chromebooks, digital boards, keyboards, computer mice, printers, ink, and paper? There's a substantial amount of money in the educational sector. While discussing every example would be impossbile, I'll mention five businesses and discuss those I've personally observed.
1. Apple, Inc.
Apple. Renowned primarily for its iPhones, MacBook’s, and seamless iOS operating system. However, the significant growth Apple has experienced in recent decades is beginning to taper off. After all, there's a limit to how many phones and laptops one can sell. Consequently, Apple has sought out a new growth market, and it seems they've found it: education. But why? In my view, there are two reasons:
It yields short-term revenue growth since schools must acquire iPads, MacBook’s, or other Apple products.
In my opinion, the most significant reason is the so-called "technology imprinting."
Children as young as 4 years old grow up using Apple products. In education, they use iPads, almost every day. Children become accustomed to the iOS interface, the way of working, and how seamlessly it operates. Essentially, Apple is investing in the 'future' through this mechanism. The likelihood that these children will choose an Apple product is considerably higher due to this 'imprinting.'
As a teacher and IT specialist, I can also attest that Apple boasts excellent customer service, high-quality software, and has invested heavily and listened to the education system to leave its mark on this market. Additionally, the increasing demand for ADS (Apple Distinguished Schools) indicates that Apple is doing something right within education. It's an incredibly astute move that could pay dividends in the future.
2. Alphabet
Alphabet, the parent company of Google and Android, also heavily invests in education. Most of you are probably aware that the majority of schools in Europe, including those in the Netherlands, operate on Chromebooks. Chromebooks are affordable and offer a solid price-performance ratio.
Moreover, there's Google Classroom, where school IT professionals can handle various tasks in the background, such as website blocking, device updates, screen monitoring, and more. Google also offers several initiatives, such as Google Scholar, Google for Education, and Be Internet Awesome, to teach children and educators how to safely navigate the internet. All of this contributes to teachers and children becoming accustomed to the Android ecosystem and thus more likely to use it in the future.
3. Microsoft
Alright. This one's a no-brainer, but it's worth mentioning nonetheless. Microsoft has been heavily investing in their offerings, including the education sector, since the COVID-19 pandemic. For several years now, they've been vigorously developing Minecraft Education to integrate it into education. Then there's Microsoft 365, of course. Microsoft 365 Education includes, among other things, Word, PowerPoint, and Excel.
The same principle applies to both children and teachers becoming accustomed to these services and likely using them in the future. Determining Microsoft's market share in a country is difficult because Microsoft is not inclined to share this information due to regulations. It's estimated that Microsoft is used by 82.5% of all businesses, including educational institutions. 99% of all businesses in Berlin use Microsoft, according to the Berlin Senate. This illustrates Microsoft's considerable influence and robust foothold within educational institutions. I anticipate that MSFT could significantly raise prices without losing customers in the (near) future.
NEDAP
In the previous article on technology in education, we briefly discussed NEDAP. NEDAP is a Dutch software company that provides tailor-made solutions for, among others, schools, farms, shops, and healthcare institutions.
About 20 years ago, as education transitioned into the digital age, they needed a solution for administrative tasks, making documents, easily sharing files, or keeping track of important student information in a secure place. Essentially, they required an all-in-one platform for schools and teachers. Enter Parnassys.
Parnassys was established some 20 years ago, and nowadays, virtually all primary schools in the Netherlands use Parnassys. Due to continuous updates and excellent customer service, schools are unlikely to switch. Additionally, even if a school wanted to switch, it would be exceedingly difficult, expensive, and time-consuming. This solidifies Parnassys' foothold and enables them to offer additional solutions. They're constantly introducing new features, such as parent communication tools, learning paths, school websites, or parent payment systems.
Duolingo
Duolingo is also increasingly being utilized within education. Duolingo is a language acquisition platform committed to making language learning accessible to everyone. Currently, the platform boasts more than 500 million active users worldwide. Duolingo's mission is to make "education free, fun, and effective."
The same principle applies to Duolingo; if they can capture a slice of the pie (languages, mathematics, and music) and establish a foothold, there's a lot of money to be made. Hence, Duolingo offers educators the opportunity to receive free premium access and create so-called 'classes,' enabling them to assign tasks and homework to children within Duolingo. The platform's innovative approach to learning, commitment to effectiveness, and scalability make it a valuable addition to education. Likewise, as more children grow up using Duolingo, the greater the likelihood they'll continue to use it later on.
Conclusion
The aforementioned companies and many others are making substantial investments in the education sector. The reasons for this are diverse:
Growth Market: The education market is vast and still expanding. With the increasing demand for digital learning tools and solutions, companies see a significant opportunity to increase their revenue.
Customer Retention: By introducing children to their products and services at a young age, companies hope to create a loyal customer base for the future. This phenomenon, known as "technology imprinting," can exert a strong influence on future decisions.
Societal Impact: Education is a crucial sector that has a profound impact on society. By investing in education, companies can enhance their image and demonstrate social responsibility.
There is no doubt that the role of technology companies will affect the future of education. It's incumbent upon us to ensure that this influence is positive and that technology is leveraged to improve education for everyone
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Whaaoh this is great, I hope those companies can also invest in kids education in the area of teaching kids globally about the fundamentals of 3Dprinting technology which is the future of addictive manufacturing AM.