The emergence of the World Wide Web convinced many observers that e-learning would soon become the "killer app" of higher education, and would pull the IT spending pendulum forcefully toward academic investment. Instead, administrative systems absorbed the largest investments of the early Internet era. The year 2000 problem was one reason for this, but more fundamentally, institutions thought that they could get more for their money by modernizing administrative systems that, although technologically out of date, addressed mature and well-understood business processes. By contrast, investment in e-learning platforms and applications has been slower because the organizational, pedagogical and regulatory context that they fit in has been ill-defined. Despite a remarkable rise in the use of course management systems — from nonexistence to near-universal presence in about five years — the actual dollar amount spent on them is still far below that of enterprise resource planning (ERP) systems. Big investments in academic computing have usually been in more-traditional areas like connectivity, bandwidth, research computing and lab computing, rather than in technologies for teaching and learning.

Gartner believes, however, that academic e-learning will soon begin to attract (and often demand) investment on a larger scale. Maintaining acceptable performance levels in the face of a growing network load will be one challenge driving this trend, but a more important factor will be creating an infrastructure that enables institutions to leverage academic content investments, offer more pedagogical options, track academic performance more effectively, and integrate academic life with campus cyberculture.

Prediction: Academic technology services will supplant ERP as the next major new IT investment in higher education.

Academic computing, once limited to delivering CPU cycles to a few sophisticated users, now includes the most-dynamic elements of a spreading cyberculture. Increasingly, the instructional "space" online will merge with forums for discussion, community interaction and entertainment — all of which are moving toward richer content (such as streaming media) and involve regulatory quagmires (for example, free speech and intellectual property issues). Because this growing environment is less coherent than the administrative realm, institutions will seek solutions that can integrate and manage the unstructured data and cultural assets found in academic environments. One effect of the shift — which is already beginning to occur — will be encroachments by administrative systems vendors into integration platform and academic-tool markets. In fact, given the technology and data interdependencies that are common between administrative systems and learning systems, such business moves are not only inevitable but welcome, because they reduce the multiplicity of vendors and provide better infrastructure integration.

By 2005, at least 60 percent of new higher-education IT spending will go toward acquiring and supporting academic technologies, including e-learning, content management and library management systems (0.7 probability).

By 2005, competitive differentiation between higher-education institutions on the basis of e-learning capability will widen dramatically due to a larger, more-tiered product marketplace (0.8 probability).

Impact on 2003: The difficult budget climate that will persist throughout 2003 (see "Budget Threats and Opportunities for Higher-Education IT") will make new IT initiatives harder to justify and fund, but will favor academic projects because they are closest to the core institutional mission and visible to a larger constituency. The product landscape will be tumultuous. Infrastructure vendors that are relatively new to higher education (for example, content management vendors) will struggle to refine marketing and pricing strategies, while next-generation e-learning products from established players like Blackboard and WebCT will still be immature. Open-source e-learning applications, such as those associated with the Open Knowledge Initiative (based at the Massachusetts Institute of Technology), will not be ready for widespread adoption in 2003, but the existence of these projects will lead some institutions to delay upgrade plans.

Reacting in 2003: Realistically, few institutions will be free to initiate large-scale academic projects in 2003, but it is important to lay the groundwork for the next-generation academic environments and resolve the organizational obstacles to enable the more-effective use of instructional systems. College and university IT administrators should:

• Develop an academic technology plan based on the ability of technology to deliver academic value against a prioritized set of institutional educational goals
• Plan for a tenfold increase in load on e-learning systems by 2006
• Advise senior executives of the growing opportunity to seize early-adopter competitive advantage; the relatively narrow spread of e-learning differentiation will widen by 2005
• Introduce academic content management policies such as workflow and templating before investing in content management systems
• Where budgets permit and Type A (aggressive) technology strategies prevail, take advantage of the weak enterprise software market in 1H03 to lock-in discount prices
• Seek out other leading-edge institutions and consortiums, and begin to develop content development and sharing strategies to keep development and distribution costs down

Prediction: Academic e-learning will move beyond course management.

Although billed as "enterprise" products, today's mainstream course management systems are built primarily around the course. Furthermore, their main function is managing course information, not supplying teaching and learning tools. These limitations encourage "stovepiping" at the course level, which preserves inefficiencies in the creation of content and hampers collaboration between e-learning leaders and the rest of the faculty.

The highest priority for institutions that are planning their next steps in e-learning should be to expose, organize and disseminate e-learning content in a more-structured, efficient way. Learning content management (LCM) will be a key feature of new systems, as will improved analytics that can better feed mounting requirements for academic accountability. Easier incorporation of pedagogical tools that stress interaction, simulation and assessment will require more-modular architectures and expanded partnership between platform vendors and third-party tool suppliers. These trends are evident in the work of the Open Knowledge Initiative, and in such next-generation projects as Blackboard's Building Blocks program and WebCT's Vista product.

By 2005, 50 percent of higher-education e-learning infrastructure spending will be directed toward best-of-breed pedagogical and content management tools (0.7 probability).

Impact on 2003: It will be dangerously easy in 2003 to dismiss the gathering momentum of next-generation e-learning as a new round of vendor hype. Still smarting over stiff price increases in 2002 and mired in budget difficulties, many institutions will pay more attention to the immature state of emerging products — and the even-higher price tags — than to the opportunities of true enterprise-level e-learning. However, Type A institutions will focus on LCM improvements and position themselves to dramatically widen competitive differentiation via e-learning. These institutions will be ready to exploit economic recovery, rather than merely wait for it to rescue them from e-learning stagnation. Because key vendors remain unprofitable, business partnerships are still developing and product categories are shifting fast, the potential exists for vendor merger, acquisition or failure.

Reacting in 2003: Higher-education institutions can afford to maintain a "steady state" with current course management systems in 2003, but need to prepare themselves organizationally, technologically and budgetwise for a raising of the bar by 2005. Institutions should:

• Identify faculty e-learning leaders and make advanced simulation and interaction tools available to them
• Institute standards for course content metadata and provide faculty support via instructional technology or library staff
• When relying on rudimentary "basic edition" products, develop an exit strategy that is based on a two-year product viability lifetime
• Stay current with open-source development projects, but be wary of uncertain support and total cost of ownership concerns
• Prepare for price increases in next-generation products in excess of the three- to fivefold increases in the time period of 2001 to 2002
• Structure all vendor relationships based on contingency plans for vendor merger or failure

Bottom Line: Academic IT is heading toward a new phase of richer, more-integrated, enterprise-oriented systems and a return to visibility and pre-eminence in the campus IT pecking order. Higher-education institutions that assume that the lightweight course management system platforms of the past will serve future needs — or which grudgingly accept the higher price tags of newer products but don't reorganize to get maximum benefit from them — run the risk of failing to meet student and faculty expectations for reliable, intensive academic support, and will miss the opportunity to make a competitive leap.

This research is part of a set of related research pieces. See AV-19-0069 for an overview.

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