I had the privilege of being invited to deliver the closing keynote at last week's EDUCAUSE Research Group's annual symposium. EDUCAUSE is higher education's IT-focused user organization; the Research Group (known as ECAR, for EDUCAUSE Center for Applied Research) focuses on taking a longer view of the pressing issues regarding higher education. Its yearly symposium offers an opportunity for members to learn and reflect on how to help their institutions respond to changing conditions and technology developments.
The symposium kicked off with a presentation by Michael Horn, Executive Director of the Innosight Institute (the commercial company associated with Clayton Christensen, author of The Innovator's Dilemma), discussing disruptive trends in higher education. Essentially, he said that traditional higher education is facing disruption because it overserves most of its constituency. Overserving customers is an important theme within Christensen's work, because it is associated with expensive or complex products that are unsuitable for many potential users due to expense or difficulty of use. Most of us have experienced the frustration of buying an electronic consumer good that has endless features and complicated controls, making it hard to do the simplest tasks. As an example of this phenomenon, the recent explosion of use of Flip Video-type products evinces the overserving by established video camcorders.
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Higher education, according to Horn, has grown to overserve many potential students. It is an expensive bundle of items, many of which are not needed by a large percentage of students. Examples of the unnecessary items include well-appointed gyms, extensive athletic programs, and so on. Many of these improvements have been caused by a perceived need to meet the competition -- if one small liberal arts school builds a very attractive gym, others feel the need to offer similar amenities.
Overall, the cost of higher education has grown dramatically -- certainly greater than the rate of inflation. Colleges and universities, locked into the equivalent of an arms race, have invested large sums in making their campuses and offerings more attractive. The net effect is that the cost of education, adjusted for inflation, is at an all-time high.
An increasing number of students choose to go to state institutions, which eschew such offerings. And many others attend community colleges for the first two years of higher education. While these institutions lack the appointments of private colleges, they deliver at a much lower price point. In essence, students are adopting more convenient, cost-effective, and easily accessed teaching institutions. These developments don't even touch on the growth of for-profit schools like Phoenix, which focus on convenience and speed of delivery. In Christensen's parlance, the incumbent offerings are being disrupted, done in by overserved consumers adopting new, more satisfactory offerings.
Horn even touched on the disruption being experienced by Harvard Business School, where he received his MBA. He noted that HBS has gotten so expensive that students can only pursue highly-paid positions in investment banking and its compeers, or top-end management consulting firms. Other potential students, focused more on operating companies, end up in less prestigious schools that align with lower starting salaries for graduates. In other words, HBS has outpriced its target market for the most part.
The net effect of this flight to less expensive alternatives by students of all types, combined with the ill-effects of the ongoing financial crisis, has meant that many higher education institutions are suffering mightily -- with the result that budgets are being cut dramatically. I heard many attendees at the symposium note that their organizations -- IT groups -- are being especially hard-hit, with headcount cuts or inability to backfill vacancies. There's a logic in this -- since most colleges and universities are loathe to cut services directly involved with faculty and students, groups like IT suffer disproportionately.
There's something of a paradox, though, as higher education is being transformed by digital capability and generating more IT demand than ever before. Just one example of this: one university encourages its faculty and students to capture desktop demonstrations in screencasting software -- and has wound up with 20 TB of desktop screencasts in the past year. So one can recognize the enormous challenge these IT organizations face; it can be summed up as "do more with less."
I was asked to speak about cloud computing and the opportunities for higher education to leverage cloud computing. While it might be expected that I would present an "all cloud, all the time" talk, I took as my jumping off point the ongoing challenge of higher education IT: there are certain core capabilities that require IT involvement -- think research, IT-enabled areas like medicine, IT-based areas like engineering and sciences. It's obvious that those areas can leverage cloud computing, but require heavy IT involvement. Other areas are necessary, but not critical to the institution. One might recognize in this the formulation Geoffrey Moore (author of the very influential "Crossing the Chasm") characterizes as "core versus context," wherein core represents the critical IT applications a company depends upon to differentiate itself and succeed; context are those IT applications a company needs, but don't do anything to make it distinct in the marketplace.
My theme was that in difficult times IT organizations can no longer try and be all things to all people: the supporter of cutting-edge imaging research, the hoster of mundane line-of-business apps, and the provider of common student and faculty apps (e.g., email and scheduling). Higher education IT organizations need to perform application triage, focusing on those most worth investing in and finding lower-cost places to move low-value software. Not surprisingly, I identified cloud computing as an excellent place to consider moving low-value software applications. These IT organizations no longer have the luxury (if, indeed, they ever really did) to provide universal coverage; instead of delivering a thin spread of inadequate applications to everyone, the reduced resources must be moved to the most needed areas of computing.
It may seem that this message is a little naive, or fails to countenance important constituencies (and one thing academia has lots of, I learned, is vocal constituencies). However, times of emergency are often the best for redirecting focus and resources. And that's a good thing for all of us to recognize: tough times don't just visit one industry or geography. Everyone should be considering how to extract the most value from reduced resources.
Bernard Golden is CEO of consulting firm HyperStratus, which specializes in virtualization, cloud computing and related issues. He is also the author of "Virtualization for Dummies," the best-selling book on virtualization to date.