University Teaching as E-Business? Research and Policy Agendas

To help university administrators and faculty decide what course of action is best for their institutions, and to develop a set of recommendations for a policy research agenda, our goals are to:

  • gain a more concise understanding of the current dynamics between universities and the non-campus e-learning marketplace,
  • develop resources and information of immediate use for campus decision-makers,
  • explore the possibility of developing a larger research agenda.

In the last few years, a diverse array of on-line education models has emerged — from for-profit ventures (, NYU Online), to equity stakes in external companies (U Chicago, Columbia,, to university consortia (Universitas 21, WGU; Yale-Stanford-Princeton-Oxford alumni initiative), to licensing agreements (Pearson, McGraw Hill). We suspect that the structure and function of existing and emerging models is determined by an equally diverse array of internal and external pressures: differential institutional missions, varying perceptions of new markets and competitors, the exigencies of financing technology-mediated learning, and the attendant controversies that accompany a university entering the marketplace (e.g., intellectual property, faculty time and incentives, conflicts of interest, preservation of quality).

So far there has been no central dialogue, roadmap, or common terminology for that which is occurring. University administrators and academic decision-makers are presented with a bewildering array of choices and potential partners as they respond to the challenges and opportunities presented by new instructional delivery technologies. Hundreds of start-up companies, established corporations, non-profit organizations, and individuals are currently offering services, products, and partnership opportunities, and frequently are competing with university programs for distance and online education. These new organizations, collectively, are capitalized in the hundreds of millions of dollars. In order to respond to the challenges of online education, university leaders need to gain reliable knowledge about the e-learning industry in order to make sophisticated evaluations of potential partners and suppliers.

This project is part of the Center for Studies in Higher Education’s large-scale umbrella program, Higher Education in the Digital Age. This program is devoted to a comparative perspective on the policy and institutional questions associated with integrating information and communication technologies (ICTs) into the academy.

Co-Sponsored by The Center for Studies in Higher Education, the Andrew W. Mellon Foundation, and the William and Flora Hewlett Foundation

Final Report from October 2001 Meeting

University Teaching as E-Business? Research and Policy Agendas: Selected Conference Proceedings. Diane Harley, Shannon Lawrence, Sandra Ouyang, and Jenny L. White, eds. CSHE.9.02. (June 2002)

Thel intent of the "University Teaching as E-Business" research project was to bring some order to the myriad online higher education ventures. Our focus has been on the place of research universities in this universe. The progress we have made to date is reflected in this publication.

We are holding a series of meetings as part of the research project.

The first formal planning meeting was held on March 27th, 2001. The following materials pertaining to the March meeting are available online:




Welcome, Introductions (Diane Harley)


The Pressure of Markets and Identifying Niche: The Industry View 
(Brief Comments 9:30-10:00; Discussion 10:00-10:30) 
Dean Gary Matkin, UC Irvine Extension (moderator) 
Professor and Dean Garry Brewer, UC Berkeley Extension 
Gordon Macomber, President & CEO, NYU Online 
Gordon Freedman, Director, Strategy & Alliances,


Balancing External and Internal Pressures: Leadership, Decision-Making, and Organizational Structures 
(Brief Comments 10:30-11:00; Discussion 11:00-11:30) 
Chancellor Emeritus and Professor I. Michael Heyman, CSHE and Boalt School of Law, UC Berkeley (moderator) 
Chancellor Emeritus David Ward, University of Wisconsin 
Provost Julius Zelmanowitz, Academic Initiatives, University of California




Economics and Finance 
(Brief Comments 12:30-1:00; Discussion 1:00-1:30) 
Dr. Saul Fisher, Program Officer, CEUTT, Andrew W. Mellon Foundation (moderator) 
Vice President and Treasurer Louis H. Katz, George Washington University 
Vice Chancellor James A. Hyatt, Budget and Finance, UC Berkeley 
Michael Goldstein, Dow, Lohnes and Albertson, Washington DC


Institutional Responses: Maintaining Access and Quality in the Context of Institutional History and Culture 
(Brief Comments 1:30-2:00; Discussion 2:00-2:30) 
Dr. Diane Harley, Research Associate, CSHE 
Professor Charles Faulhaber, Director of The Bancroft Library 
Professor Sheldon Rothblatt, Department of History, UC Berkeley




Policy Research Agendas 
(Brief Comments 1:30-2:00; Discussion 2:00-3:00) 
Professor Martin Trow, Goldman School of Public Policy, UC Berkeley (moderator) 
Professor and Dean David W. Breneman, Curry School of Education, University of Virginia 
Professor Roger Geiger, Head, Higher Education Program, Pennsylvania State University


Project Planning (Diane Harley) 
Fall Meeting: Participants, Format and Timing 
Review Goals, Methodologies (e.g., case studies, questionnaires), and Publications


Drinks and Dinner (O'Neil Room, Faculty Club)


List of Participants

  • Professor and Dean David W. Breneman, Curry School of Education, University of Virginia
  • Professor and Dean Garry Brewer, UC Berkeley Extension
  • Dr. John A. Douglass, Senior Research Fellow, CSHE
  • Professor Charles Faulhaber, Director of The Bancroft Library
  • Dr. Saul Fisher, Program Officer, CEUTT, Andrew W. Mellon Foundation
  • Gordon Freedman, Director, Strategy & Alliances,
  • Professor Roger Geiger, Head, Higher Education Program, Pennsylvania State University
  • Michael Goldstein, Dow, Lohnes and Albertson, Washington DC
  • Dr. Diane Harley, Research Associate, CSHE
  • Chancellor Emeritus and Professor I. Michael Heyman, CSHE and Boalt School of Law, UC Berkeley
  • Vice Chancellor James A. Hyatt, Budget and Finance, UC Berkeley
  • Vice President and Treasurer Louis H. Katz, George Washington University
  • Gordon Macomber, President & CEO, NYU Online
  • Dean Gary Matkin, UC Irvine Extension
  • Professor Sheldon Rothblatt, Department of History, UC Berkeley
  • Professor Martin Trow, Goldman School of Public Policy, UC Berkeley
  • Chancellor Emeritus David Ward, University of Wisconsin; President, American Council of Education
  • Provost Julius Zelmanowitz, Academic Initiatives, University of California



The goals of the planning meeting were to:

  • Begin to establish a common view of the world of e-learning, especially as it relates to research universities
  • Understand some of the forces and dynamics at play in this world in order to be able to describe them to others -- to colleagues who are running universities and e-ventures, and who are faced with some very, very tough decisions.
  • Plot the project’s future course.

The future work of the project should:

  • Articulate a research agenda. Identify the specific critical issues in the social science of higher education - as well as policy studies, business, and law - that arise in the e-learning environment, and develop strategies for addressing those issues through a rigorous research program.
  • Provide a conceptual view. The dynamics and shifts of business models are more important than a static snapshot description.
  • Provide a decision tree type of analysis. What are the questions and potential answers that would lead in one direction or another to varying outcomes. Currently there is no established set of decision trees.
  • Provide a component-mapping of the minimum and the variable components that are available in these models (e.g., vendor-centric point of view, curricular point of view, content point of view).
  • Address the importance of standards.

The main themes that emerged can be categorized as follows:

  • Balancing Internal and External Pressures: The tensions between economics, education, and culture. Issues such as autonomy, faculty buy-in, intellectual property, market and non-market cultures, and conflicts among stakeholders.
  • Decision-Making: he factors which are important in decision making. How institutions define niche and determine viable structures for e-learning ventures that are 1) balanced with core institutional missions and strengths, while 2) responding to fast-changing environments.
  • Models and Organization: The placement of e-learning initiatives within the institution. The array of business models currently available to institutions thinking about entering new markets. The role of Extension and continuing education divisions, and relationship of their activities to the core institution.
  • Finance and Economics: The costs, benefits, and risks of e-learning ventures to the institution. The variety of models available for courseware production.



Information and communication technologies (ICTs) are seen as a potential solution to the triad of pressures facing research universities: 1) holding down costs, 2) increasing access to an increasingly diverse demographic, and 3) maintaining quality. It is not clear, however, that any university has a clear strategic plan for tackling all three pressures with ICTs. There is an adage used in software development: clients can have it 1) good, 2) fast, 3) cheap-pick any two. The question is whether we can use ICTs to simultaneously reduce costs, increase quality, and widen access-on limited budgets. Or will we need to pick only two?

We have no common view of the world of e-learning, primarily because our ideas of what this world might look like have been changing rapidly over the last few years. The field may not be dominated by a few large players, as once seemed possible; there will be many small players in this field in addition to several large players. The whole notion of a niche market is going to be one that increasingly dominates the strategic thinking of universities.

Why is the university getting involved in e-learning, and what are its goals? For many, the first reason is money, pure and simple; the university wants to generate revenue, which may then subsidize the university’s other activities.


Three drivers were identified in the on-line learning arena: economic, cultural, and educational. The slower pace of change and relative autonomy of the traditional university are giving way to more aggressive economic forces, and concerns about the commercialization of teaching.

There are many constituencies who have a stake in decision-making, including: 1) the Board of Governors or the Board of Regents; 2) the campus administration and/or a system-wide administration; 3) commercial or venture arms of the university; 4) the letters and science core of the university, especially faculty; 5) student expectations; 6) other universities, which generate peer pressure at the university level.

What was formerly "economics in the service of the educator" has the potential to be turned around to become "education in the service of economics." A fundamental issue is the continuing tension between market and non-market forces, and whether the development and maintenance of university autonomy will be threatened.

Serious consideration needs to be given to ways in which non-market parts of the university can be strengthened in the face of the enormous pressures that are described by these new ventures.

The success of higher education will always be that there is a piece of the enterprise that remains outside of the marketplace. The genius of the academic system is that both the faculty government and the administration allow white space or neutral space for experiments to occur.


There is the potential disconnect between the e-commercial enterprises and the core of the university. The major reason for creating new structures and organizations has been to create an entity that can do things under the wing of the university, but separate from it. Two advantages to this approach are providing for a faster pace of change than the university structure allows for, and minimizing the risk to the institution involved in these new ventures.

Higher education is perhaps the ultimate niche marketplace. Each of the roughly 3,000 institutions of higher learning has its own niche, whether it targets particular degrees or particular markets. One goal of a university’s involvement in the e-learning marketplace might be to generate revenues. Another purpose is to simply improve the delivery of intellectual resources on campus. Each institution will have to determine its niche(s).

One problem is preserving the richness of the university’s academic and social culture, particularly given its importance to the undergraduate experience, and trying to translate that at a distance. What other new models might there be, e.g., highly customized and/or ephemeral modules?

There are several inherent limitations that universities confront when assessing their roles in e-learning ventures. Universities have enormous intellectual capital, but this clearly is not the area that’s going to be the most lucrative, given that the maintenance of prestige depends on scarcity.


A crucial question is, how do we pay for e-learning, and how do we make it pay? Models for financing e-learning are not one size fits all, and deciding what works for each institution is part of the learning process.

There are essentially two different kinds of economic models: internal (reallocation and internal investment) and external financing (venture capital, strategic partnering, revenue sharing).

In terms of raising capital, what are viable options and opportunities? The university’s reputation is a factor in considering options for financing, in terms of balancing the university as a "brand" vs. engaging in partnerships. Another consideration is whether or not value is added by partnering with an external entity. This can be a particular problem for a public university.


Course design can be driven by the institution, by content, or by faculty.

A traditional seminar has a low set-up cost, but a high marketing cost, and quality is quickly affected beyond a max of 15-20 students; in contrast, new learning environments have a high set-up cost, up to $1 million, but once underway, little additional cost in terms of development. There are also maintenance costs for e-learning, including a faculty component, a service component, and a student services component, which is relatively costly and generally the weak spot.

Will new e-learning courses, costing half a million dollars or more, replace the traditional $30,000 courses, or is it a waste of money? Will investment in a course really improve quality of the course? This is not supported by any real data; it’s an investment decision, rather than an academic one.


The faculty member is contributing to a defined product, which is developed by a team, is then sold, and has value. Whether ownership with regard to courseware is an economic issue or not, it’s an enormous emotional issue.

Addressing the issue of intellectual property not only in terms of getting maximum economic value, but also in terms of encouraging people to be creative, is a major challenge. It’s very important to give the faculty incentives to be innovative and creative, rather than giving them disincentives.

The two models for intellectual property policy are textbooks and patents. The real question is not who owns the property, but what is the deal. The faculty may own the content, but the university has a real say in setting the parameters of allowable deals.

E-commerce may ultimately be the catalyst for a more specific IP policy. This could be good or bad; universities like the idea of not having too strict a policy, and then simply dealing with the exceptions. But when there are too many exceptions, there needs to be a policy, and working out this policy is very difficult.


Meeting Notes

Goals of the meeting:

  • To begin to establish a common view of the world of e-learning, especially as it relates to research universities.
  • To begin to understand some of the forces and dynamics at play in this world in order to be able to describe them to others -- to colleagues who are running universities and e-ventures, and who are faced with some very, very tough decisions.
  • To plot the project's future course.

There were a few key suggestions that will inform our future work. The project needs to:

  • Articulate a research agenda. Identify the specific critical issues in the social science of higher education--as well as policy studies, business, and law--that arise in the e-learning environment, and develop strategies for addressing those issues through a rigorous research program.
  • Provide a conceptual view. The dynamics and shifts of business models are more important than a static snapshot description. A thick description would build specific examples of organizations in the e-learning business, and describe extractable principles that will have some value and a reasonable future.
  • Provide a decision tree type of analysis. What are the questions and potential answers that would lead in one direction or another to varying outcomes? A decision tree maps the whole process of thinking through a particular problem. If a certain outcome is assumed, what is the decision tree that is needed in order to obtain those outcomes? For example, if the idea is to enhance undergraduate education through e-learning, that's one decision tree. If the idea is to create a global market for courses and programs, that's a different decision tree. Currently there is no established set of decision trees.
  • Provide a component-mapping of the minimum and the variable components that are available in these models (e.g., vendor-centric point of view, curricular point of view, content point of view), and include descriptions of the features necessary for the development and maintenance of a "full delivery" model for online distance education and digital content management.
  • Address the importance of standards. The issue of standards is inextricably tied to scalability, hence standards impact both student acceptance of e-learning materials and the economics of creating e-learning ventures.

Main Themes

The main themes that emerged can be categorized as follows:

  • Balancing Internal and External Pressures: The tensions between economics, education, and culture. Issues such as autonomy, faculty buy-in, intellectual property, market and non-market cultures, and conflicts among stakeholders.
  • Decision-Making: The factors which are important in decision making. How institutions define niche and determine viable structures for e-learning ventures that are 1) balanced with core institutional missions and strengths, while 2) responding to fast changing environments.
  • Models and Organization: The placement of e-learning initiatives within the institution. The array of business models currently available to institutions thinking about entering new markets. The role of Extension and continuing education divisions, and their activities' relationship to the core institution.
  • Finance and Economics: The costs, benefits, and risks of e-learning ventures to the institution. The variety of models available for courseware production.

Woven throughout the day were "thick" descriptions of how the institutions represented at the table are grappling with this universe. These aspects of the discussion have been extracted and are being written up as case studies, to be reviewed and added to by the principals. They include George Washington University, New York University Online, and the University of California.


Diane Harley and Gary Matkin introduced the meeting.

Diane Harley: 
Information and communication technologies (ICTs) are seen as a potential solution to the triad of pressures facing research universities: 1) holding down costs, 2) increasing access to an increasingly diverse demographic, and 3) maintaining quality. It is not clear, however, that any university has a clear strategic plan for tackling all three pressures with ICTs. There is an adage we use in software development when working with "clients." We usually tell them that they can have it 1) good, 2) fast, 3) cheap -- pick any two. The question is whether or not we can use ICTs to simultaneously reduce costs, increase quality, and widen access, all on limited budgets. Or will we need to pick only two?

Gary Matkin: 
We have no common view of the world of e-learning, primarily because our ideas of what this world might look like have been changing rapidly over the last few years. Some years ago there was the notion that online education would continue the way university education was going, and had been going a long time: sort of a cottage industry, with localized provisions and a lot of players serving small audiences.

We began calling the opposite scenario the 'Death Star Alliance' view, where one or a few very large players would emerge as the dominant force in online education. And so it looked like the underlying finances and the business impulses were all there to create either one or several or a very few large scale operations that would dominate the field and become almost like the McDonald's of on-line higher education.

As the years have passed, the Death Star Alliance end of the spectrum has not emerged. Although ultimately there may be several large players, there will still be many small players in this field, and the whole notion of a niche market is going to be one that increasingly dominates the strategic thinking of universities.

The other trend that I see, that the title of this panel ("The Pressure of Markets and Identifying Niche: The Industry View") evokes, is the implication that there is an industry view, as well as a university view. Right from the beginning, it was clear that for-profit corporations of all kinds were going to have a major role in online learning, even that online learning offered by the universities. So those for-profit organizations, which formed part of the industry, were always an important part of university online education. And, of course, many universities began to operate either actually as for-profit organizations, or very much like for-profit organizations.

The question was raised of why universities are entering this market, and why it is necessary for universities to get involved. Michael Goldstein suggested that for many, the reason is money, plain and simple. Particularly in graduate professional education, there are new opportunities to build a market, and this economic opportunity may then subsidize the university's other activities.

Balancing Internal and External Pressures


Gordon Macomber began the discussion by describing NYU Online, and some of the challenges he faces as its head. Three drivers were identified in the on-line learning arena: economic, cultural, and educational. The traditional mindset within research universities has been geared towards education and towards a specific academic culture through which to provide that education. Much of our discussion focused on the tension between the traditional role of research universities and the new pressure of market forces, which have the potential to commercialize teaching.

The economic perspective on teaching is not one that traditional academics has easily adopted; the teaching culture has not had to address the potential commercialization of teaching that appears to have become possible with ICTs. From the perspective of those involved in creating viable on-line programs, the lack of a culture or staff attuned to the economic realities is a real problem. Whether going outside and set up a for-profit, or hiring people to come in and work within the institution, an institution needs business-minded people, who understand academic culture, to handle the economic and finance issues involved.

Julius Zelmanowitz captured much of the tension between economics, education, and culture when he described how many constituencies really have a stake in the potential evolution of the university and e-commerce instructional world.

  1. One is the Board of Governors or the Board of Regents. Often successful entrepreneurs or venture capitalists, they have opinions about what the university ought to be doing.
  2. There is also the campus administration, and a system-wide administration. The predispositions may be different at the system and campus level.
  3. Commercial or venture arms of the university may exist, executive programs and extension divisions. These can be for-profit or non-profit; they can be self supporting.
  4. There is the letters and science or arts and science core of the university. Generally, the faculty are primarily interested in research, instruction, and public service; they also provide instruction for already matriculated students.
  5. Then there are the student expectations. Students are doing more and more of their transactions with the university in a digital way.
  6. Universities worry about what other universities are doing, so there is peer pressure at the university level; you don't want to be last in the queue.


Martin Trow pointed out that most universities have been very much concerned with the development and maintenance of autonomy, the capacity to work towards their own ends, rather than just being the means to the ends of other institutions. What was formerly economics in the service of the educator has the potential to be turned around to become education in the service of economics.

A fundamental issue is the continuing tension between market and non-market forces. Adjustments to the new environment may have a large cumulative effect down the line, very hard to predict in themselves, but having quite unintended consequences. For example, the commercialization of both teaching and research greatly increases, even exaggerates, the internal differentiation in the reward structure in the university. And that has considerable consequences for recruitment of faculty to different disciplines.

The professional schools have always had a more sensitive response to market considerations. ICT greatly strengthens the power of the user - in this case, the market - as opposed to the producer. That may have subtle consequences for the character and the culture of the professional school.

It is difficult to build these speculations into any kind of coherent policy. It may be possible to see trends, and to identify them, and to respond to them. For example, if attempting to strengthen the response to market forces, is it possible to create policy that develops stronger counter-market forces in the university? What could those forces be? Perhaps some types of subsidies could be developed for parts of the university that are not quite so responsive to the market. We should think seriously about how these non-market parts of the university can be strengthened in the face of the enormous pressures that are described by these new ventures. That seems to be one of the few areas that we can actually plan for.

David Ward suggested that profit and non-profit may not be the two cultures we should be talking about. Institutions have always done things to some degree outside of the market process. There are certain non-market necessities, in addition to the marketplace, that make universities work. It may be problematic if e-learning really can create market penetration into university structures, which may be different from the way the market has penetrated research. The success of higher education will always be that there is a piece of the enterprise which remains outside of the marketplace. What proportion that is, whether it's a quarter of the enterprise or three-quarters of the enterprise, is negotiable. Most institutions work that out in some way, albeit differently.

The challenge that we face is perhaps to recognize fully the culture which e-learning is either being drafted onto or is transforming. The genius of the academic system is that both the faculty government and the administration allow white space or neutral space for experiments to occur. It should be possible to think of a variety of experiments by which e-learning could occur, without completely changing the institution.

Decision-Making, Models and Organization

Where should ventures be placed in the organization? What should their relationship to core campus activities be? The greatest difficulties arise when the organizational culture, the multicultural organization, has not been able to capture and balance the mixture of public and private. When we have captured it and allowed it, it's manageable; it's when it's completely beyond our control that we have an actual crisis. What the emergence of e-learning markets has done is to force us to look at this mixture within the teaching enterprise for the first time.

The compatibility of e-learning ventures with existing enterprises is an important issue for decision makers in higher education. It has been generally acknowledged that the major reason for creating new structures and organizations for e-learning ventures has been to create something that could do things under the wing of the university, but separate from it, so as not to disrupt the internal operations of the institution. Reflecting on his work with NYU Online and e-Cornell, both of which are self-funded, for-profit spin-outs, Michael Goldstein pointed out that the intellectual property policies, the development policies, as well as the operations of e-Cornell and NYU Online, could not have been readily done within the construct of the traditional academic setting. To do so would have required substantial change, which, in the terms of e-learning, would take geological time. An important reason these activities are kept separate from the core institution, even if it's internally segregated, is because it's a risky operation, and problems to the core of the institution must be minimized.

Julius Zelmanowitz suggested that the biggest decision that academic administrators, whether at the system-wide or campus level, have to make is dealing with the potential disconnect of the e-commercial enterprises from the core of the university. Reasons for setting up "offshore enterprises" include removing constraints of some university policies that are either archaic or, while appropriate for much of what the university does, are inappropriate for e-learning enterprises, which are operating in the fast-moving world of e-commerce, where you want flexibility and the ability to make quick decisions. But any total disconnect from the core comes at a real price. It also runs the risk of really not capturing that which is most valuable and most unique within the university. The predilection of some of our panelists (David Ward, Mike Heyman, Julius Zelmanowitz) is that developments that occur in our actual core classrooms should fertilize e-enterprises, and that should be the unique niche that research universities occupy.

In the University of California system, it was pointed out that there is a panoply of policies concerning continuing education, part-time education, and degree granting. Gary Brewer, Dean of UCB Extension, spent some time discussing the challenges of operating an on-line continuing education program, given current policies. Mike Heyman pointed out the past problems at UC in the relationship between some programs in professional schools and engineering, for instance, and between the potential for executive courses or for continuing education. Who's really responsible for those? Should it be UC Extension, or should it be the schools themselves? UC Extension perhaps ended up with a form of organization that works fairly well, but needs some help and redefinition in the e-commerce world. The Extension division can be relied on to carry out most of the distance learning activities that occur, and to cope with the kind of problems we're talking about here, leaving the balance of the academic enterprise to be carried out as it is, within the core institution. But in order to do that well, we could rearrange that set of relations in a way that would provide Extension considerably more flexibility with regard to the courses that it offers. It ought to have the opportunity to get into the degree world in some appropriate way, rather than to rely solely on either the interest of individuals in informal education, or certificates and the like.


The importance of "niche" identification permeated our discussions. As pointed out by Michael Goldstein, higher education is the ultimate niche marketplace. There are roughly 3,000 institutions, depending on how you count it. Every institution has its own niche. It is probable that the e-learning institutions that will have a chance of success are looking very carefully at what their particular niche is.

For example, at Cornell, the approach is not to roll out the university, but rather to identify areas where the institution can build on particular capabilities. Penn State is focusing a good deal on continuing and extension education. The bulk of what they're offering is associate degree programs, which is a niche that has a captive market. Penn State's niche has also been the global reach. In fact, as you build an infrastructure with enormous reach, and then build on that infrastructure, you already have the capacity to operate pretty much throughout the world, whereas most institutions would have to spend an immense amount of money to be able to do that. So the universities with that infrastructure in place have already carved out a geographic niche.

Louis Katz pointed out that the strategy at George Washington University is to spin off a new company, a for-profit, regional learning solutions company that will focus on GW's core markets (government and the regional corporations in the Washington DC metropolitan area). They also have an international focus, to some extent, because there are some markets that do very well internationally. By building off of those market niches that already exist, the need for large sums of new capital is not as crucial. So what they are doing, at least initially, is viewing these as programmatic investments.

As pointed out by Gary Matkin, the quick shifts in business models that can be observed in e-learning ventures suggest that identification of niche is not always easy. Inside the niche market for universities, the decision may be to go after degrees, e.g. the MBA, the "low hanging fruit." Suddenly the competition gets intense, and it turns out not to be so easy, so instead the corporate market will be the next target. This is what NYU is doing. It means creating shorter types of programs with a faster development turnaround, because that appears to be what the market wants today. The uncertainty, of course, is what the market will want tomorrow.

For David Ward and others, the question is how to translate the richness of the university experience at a distance. The ideal niche might be where there is some overlap between the traditional product and the new product. On this list would be freshman courses. This is a case in which our style of education is not necessarily ideal. We may create a new product that serves our own needs, and then it will accidentally serve other needs and populations. Another area is advanced knowledge. It ought to be possible to rethink the Master's degree, so that it would now be possible for people with a Masters or Ph.D. in one field to get a Master's degree in another field. It may well be that we have the monopoly on knowledge to create effective at-a-distance graduate short courses for adult professionals.

It also may be that there will be some other species of product other than a degree. Can the university, in its complex culture, create some space where neither classroom nor credit is the currency? This might mean modules that are in a sense "just in time," modules that are highly customized to specific cohorts of learners. The challenge, obviously, is whether our academic culture is capable of transforming in order to create a product that we currently don't deliver. Our culture, or some segment of our culture, will now have to decide how we might do that.

What is the comparative advantage for universities over the other actors in this marketplace? What are universities trying to accomplish by being involved in the e-learning marketplace? One goal of a university might be to generate revenues. Another purpose is to simply improve the delivery of intellectual resources on campus.

Roger Geiger pointed out that there are paradoxes, or inherent limitations that universities confront when assessing their roles in e-learning ventures. It appears that the university is largely aiming for the high quality tier in this market. The universities have enormous intellectual capital, which can be converted into content. Here is where Geiger finds the first limitation or paradox. It's clear that this may be the most valuable role that universities have to play, but it's clearly not the one that's going to be the most lucrative. The things that the university is best at, that they are clearly superior at, are the things that are least lucrative in the marketplace (e.g., Charles Faulhaber's Catalan language course). The things that are most lucrative in the marketplace are places where the university probably has no comparative advantage at all, such as business training.

The second limitation is related to prestige. The advantage that universities may have in an e-learning marketplace in terms of brand name has already come up in discussion. But there's no evidence that there is or will be a differential value in the marketplace. On the other hand, there is evidence that traditional degrees from our elite universities make a big difference in the marketplace.

Another complication involving prestige is, of course, that prestige depends on scarcity. And what makes economic sense is scaleability, how to scale up to the delivery of services. So the whole process of e-learning is to produce high scale delivery, whereas prestige depends quite heavily on scarcity. This limitation concerns faculty, because ultimately the intellectual capital, the prestige of the institution, depends very heavily upon the quality of the faculty. It is very difficult to provide faculty with incentives for their participation in e-learning. The fact of the matter is, the faculty in the universities are overloaded, and have become increasingly overloaded in recent times. The kinds of structures that we're talking about today have clearly developed primarily on the periphery of the university, and tend to bypass the regular faculty.

Finance and Economics

Michael Goldstein pointed out that the economics of e-learning has forced us to look at different finance models. Because e-learning goes beyond the traditional confines of the institution, and brings into it the powerful concept of marketing to different constituencies, we need to accommodate a different set of financial and cultural and economic realities. Ultimately, it comes back to how we pay for it, and how we can make it pay. Since it is e-commerce, e-learning, it's a different way of life. This is a big piece of the struggle, because there is definitely no one-size-fits-all approach. We're in the process of learning what sizes fit what kinds of institutions.

Starting with the economics of the traditional model, once the campus is built, there's a revenue stream. The nice thing about traditional face to face education is that when we put a teacher in front of the class, the moment he or she starts teaching, we can begin to collect revenue. E-learning has dramatically changed that. We start with the high cost of creating courseware, and then over a relatively short period of time we have to reinvest in it, upgrade it, and have it meet the changing technical environment. And we don't collect a dime until we've built the courseware, so our revenue stream starts long after we have invested in the product. This means we have a working capital gap, and there's the potential for a huge gap. We have to pay for that course in advance, and our institutional systems are not built for that.

What this situation has done is driven us to look at the economics of the situation in a different way. There are essentially two different kinds of models, internal and external financing. Generally, the usual internal financing model is reallocation. Reallocation in this kind of a setting is very difficult, although many institutions are relying on such a model.

In addition to the internal model that relies on reallocation, there is a new money model, which is what Cornell University has done. The Board said, 'Let's take x million dollars from our investment portfolio, and instead of investing it in Firestone, we're going to invest it in e-Cornell, a for-profit, wholly-owned subsidiary." It doesn't change the money available for other programs; there's no reallocation. It's simply an issue of investing it internally, to ourselves, rather than investing it externally.

The external model is what, for example, Maryland and other public institutions are more likely to do. Maryland, without large endowment resources, has gone the venture capital route. Another external financing route is a strategic partner. The venture capitalist is looking for a return within a finite period; the strategic partner potentially, at least, is looking to be there for the long-term.

James Hyatt described some of the many opportunities that UC Berkeley is considering. The problem is addressing how the initiative will be financed, particularly the infrastructure that supports on- and off-campus activities, and whether or not these opportunities will result in a positive gain for the institution. Until recently, UCB has been handling these choices somewhat ad hoc. A new effort is being made to centralize decision-making processes because the expensive infrastructures that undergird e-learning also have to support e-commerce, e-business, and all the other things in the campus e-environment. When the campus is approached by outside ventures, a variety of issues must be addressed:

  • the degree to which partnering with an external entity might provide an added value versus going it alone.
  • protecting the brand name of the university.
  • developing a business plan that maps revenues and expenditures and looks at the full cost of participation. There are start-up costs, which are not insignificant; ongoing maintenance and support costs; and site licenses.
  • the trade-off between investment in e-learning versus other institutional priorities.
  • potential conflicts between what the campus wants to do versus what the system wants to do, as Berkeley is part of the 10 campus University of California system.
  • taking into consideration the public versus private nature of the university; for example, engaging in competition as a public university has many legal ramifications.
  • the many risks in this enterprise, including those shared with the partners, as well as risks to institutional reputation and credibility (the risk to the institution in being affiliated with failed ventures).

Course Development Costs

Course development costs were discussed throughout the day. Besides the question of demand, there is the issue of prestige as it relates to a demand for something special. The cost functions of the traditional elite institutional program compared to the advanced e-learning programs are diametrically opposed. In the traditional elite program, there is a low set-up cost for each course and quite a high marketing cost. If you get more than 15 or 20 students in a seminar course, it begins to deteriorate. To develop quality on-line learning environments, the set-up cost is very high, approaching $1 million a course in some cases; or in the case of infrastructure, a huge investment in broadband technology is necessary. So the set-up cost is very high and the marginal cost, once you get things underway, is of course zero.

There is a very wide range of models/possibilities for course development. In the high level courses, for instance the half-million dollar course, the faculty member, who is typically a distinguished research faculty member, is supported very extensively by a structural design team. He or she will be providing content, which is then built into a learning environment. The individual may show up in streaming video or in audio. You're buying, partly, his brand name. The faculty member becomes almost like a scriptwriter, who delivers the script which then becomes the movie; it is in between delivering the script and the movie that this transformation occurs.

The Phoenix model is an institutionally designed course. They started out by saying, "We want an MBA Program. And we'll assemble experts from employers, and we'll figure out what the learning objective should be, and we'll parse that into courses, and we'll design this thing, square one, from the institutional standpoint."

Then you drop down into the individual and structured design, where there is a curious set of models. On the one hand we have something like online learning at UCLA, where a content expert instructor, often a work-for-hire instructor, sits down with a technologist, and together they put up some pages on the web that serve as the online course and part of the instruction. This costs about $1,000 and maybe five or six hours from the instructor.

As at NYU, another model involves the faculty spending 8 to 10 hours in primarily a reviewer's role. He or she is probably supported by non-faculty content experts and a technical team. The faculty member may make minor suggestions such as the sequence of lessons, or corrections to content.

Then there is the UC model, maybe 140 hours of faculty time at Berkeley, or 140 or 150 hours at Irvine, where the faculty are really doing the writing themselves, assisted by a technology team.

Someone like Don Norman will argue strenuously that by investing what Unext does in a course (>$500,000), they are creating a vastly superior learning environment. That is absolutely not supported by any kind of decent data, but that's the script. They're not investing that kind of money in the course because they think it's a nice thing to do; they're investing in it because they believe that ultimately the market will reward that kind of capital investment.

This brings up the marketing aspect of e-learning: you could be enormously successful if it pays off, so to speak. The University of Phoenix' audience is primarily business, so their success depends upon the degree to which a business customer will view what they are selling as, in fact, adding value to their environment. So they are betting that this is in fact the case. Nobody cares how much it costs, but they're erring on the consumer side because they have an expensive product.

In addition to course content, the design and maintenance are important. What is the quality of instructional design? How much should be spent on the instructional design? How much should be spent on media, enriching the range of stuff being put into the course? And what kind of content is actually purchased? Is it worth it to shoot video and so forth? That's what really adds up the cost. There's a very wide range, and there are probably no real data that say that spending a million dollars to create a course is more effective for the learner than spending $30,000.

There is still the cost of maintaining an e-course. There's a faculty component and a student services component, which is relatively costly. The weak spot in almost all the learning courses programs, so far, is in student services. That's where the learning management systems, which are very expensive, begin to come into play.

Policy / Research Questions

Sheldon Rothblatt emphasized that there are many different kinds of institutions and different kinds of academic cultures. Of course we want to know what the future's going to be like, but we also need research projects that assess what impacts we have already been able to measure in our current environment. What cultures have been changed? What cultures have been modified? What has not been modified? What has shifted in our academic culture? What has not shifted? There is the question of learning for these different audiences in their different environments, which is really a clue to some other issues about what learning is and where it takes place.

David Breneman has been looking at why Wall Street is investing in private on-line education. Why are students attending? What are they getting? There is great interest in the new degree-granting entities, many of which have issued stock. Right now, or at least as of a year ago, the data sets aren't out there that identify the institutions well enough to allow you to examine rates of return for these non-traditional entities. His group has also become very interested in the continuing education units of the major universities, a great unexplored part of this whole terrain.

We wouldn't want to write off e-ventures that don't work out as necessarily being irrational exuberance, but we do want some kind of model to understand why it is that these things were done in the first place, suggests Saul Fisher. In addition to the research questions of demand and supply behavior among institutions, issues of financial aid, revenue dynamics, rates of return on education, and demand behavior among students, there is also the question of who might be conducting this research.

Another set of issues, not in economics per se, but more in terms of finance, concerns investment strategies. The discussion today has centered on the range of successes and failures and different case studies, but what kinds of patterns might we start to see with respect to investment strategies? What sort of precedents are there with respect to investment strategies in the non-profit sector, venturing into any sorts of business-type endeavors?

Martin Trow points out the continuing necessity for research, especially given the continual and rapid obsolescence of the technologies whose effects are being studied. So one question that any research plan might address is how robust, or how stable, or how persistent the research findings can be in the face of the rapidity of technological change. That, in turn, calls for the kind of research that is highly reflexive, subcritical in that area.

Secondly, it seems that a reasonable hypothesis is to see ICTs as an enhancer of student qualities that are already present to some degree. Therefore student motivation may be a particularly crucial characteristic to study in connection with the effectiveness of ICT. To what extent do new technologies work to generate motivation, and not just serve those already highly motivated?

Intellectual Property

Michael Goldstein began the discussion by bringing up an important issue that has little to do with economics, i.e., the culture issue. The culture issue really ends up being the question of intellectual property. Who owns it? This was never really a problem when we were talking about someone standing in front of a class. The faculty member clearly owned what he or she was giving to the class. So now there is a strong precedent for the course as property owned by the faculty member. But if we use the word 'courseware,' suddenly that's a very different question. The faculty member is contributing to a defined product; that product is developed by a team, is then sold, and has value. New models are being created, which don't adapt themselves very well to the traditional internal workings of the institution.

A driving force for both Cornell and NYU was to be able to establish an e-learning structure that would not require turning the university on its head. In the working agreement between Cornell University and e-Cornell, one provision stipulated that the materials provided by the faculty member were his/her works made for hire. The faculty heard about this in about two milliseconds, and this was a life-threatening experience for them. First of all the response was, 'Guys, get over it. This is not the vehicle for changing the university's relationship with its faculty.' Ultimately, a three-cornered agreement was worked out, where the faculty member is licensing the intellectual content of the course, then this licensing is the business learning product, and the distance-learning product is jointly owned by the university and by e-Cornell. E-Cornell produces the business-learning product and markets it, and what Cornell contributes, which gives them co-ownership, is the name. The faculty has the right to keep the intellectual content, and use it any way he or she wants, even if they go to another institution, with the condition that they sign a non-competition agreement not to use that same intellectual content to create a competing business learning product. There is nothing here that speaks about the relationship between the university and the faculty, in terms of the faculty's rights and prerogatives; that issue has been completely separated.

It was agreed that intellectual property rights are a big issue in terms of new media and education, and there's a consensus actually developing within the university that's interesting. Nationally, the mainstream is to move more towards the textbook model than the patent model. The directive seems to be that, at this stage of courseware development, it's really important to give the faculty incentives to be innovative and creative, rather than giving them disincentives. Of course, where the university makes an obvious contribution, there will be an effort for some recapture.

In terms of moving toward the textbook models, rather than a patent policy model, particularly given the accepted course with significant university involvement, Michael Goldstein comments that Pandora's box is probably a more apt analogy than Sisyphus. The reason is that most institutions are moving in the direction of a bipolar model, but everybody is terrified of the middle. The question is courseware: how is it defined? It is compared to textbooks because of the intellectual content. Ownership with regard to courseware is an important issue; whether it's an economic issue or not, it's an enormous emotional issue. It seems that treating the issue not only in terms of getting maximum economic value, but also in terms of encouraging people to be creative, is a major challenge.

Gary Matkin argues that the issue of a patent vs. textbook model is a false dichotomy. Universities start out by saying either that the faculty members own this copyright or the university owns the copyright, but these come right down to the same place, unless there is an agreement that specifies how this thing should be owned, or a third party agreement requires that something else happen, or substantial university resources are being used. The latter becomes an issue when some faculty member has been using substantial resources without an agreement, and it sort of pops up, and somebody says, 'Oops, we've got this very valuable stuff that we can sell and now we've got this dispute.' It turns out to be a relatively small subset of possibilities here, because the university extension would never start an online course development without an agreement with the faculty.

David Ward also comments on the patent analogy. The difference with patents, he suggests, is that there are significant up front costs, legally and otherwise. If the university is providing very good service in that respect, and there is a track record of success for tackling these problems in the patent arena, then individuals see the advantages of having the university negotiate this terrain, and they don't mind sharing the profits. The challenge with the courseware is that the probability of payoff is significantly less. This represents a significant difference, which is a challenge.

Ward sees the crisis beginning to develop at Wisconsin as stemming from people asking for accountings of all supplementary revenue. Consequently, other issues are being raised that traditionally have not been an issue, because, unlike patents, they're amorphous and unexplored. The whole question of what might be described as consulting has become very visible. This even includes consulting for the public sector: there have been several serious problems with pay for engineers and lawyers consulting for the public sector, and they're in public employ; or even worse, in court action, pay for individuals who are seen as not working in the "interests of the state." In the past, these things were very quietly handled by somebody who would have had enough common sense not to give testimony in that particular case because it would embarrass the university.

So the whole issue of intellectual property is now being raised in other areas, which is perhaps why, even though we're coming to a middle point between the patent and the textbook model, that ultimately e-commerce will force us to have a more specific policy. This could be good or bad. Universities like the idea of not having too strict a policy, and then simply dealing with the exceptions. But the challenge is that when there are too many exceptions, there needs to be a policy, and working out this policy can be very difficult.

As to the future in the intellectual property area, one lesson (perhaps Intellectual Property 1A, as taught by the entertainment industry) is that the question is not who owns the property, but what is the deal. In the last seven years, the entertainment industry has really worked out the business of how much the studio owns and what the individual writer owns. In our case, the faculty may own the content, but the university has a real say in setting the parameters of allowable deals. One thing to avoid, which has come up in journal publishing, is faculty having to go outside the university to pay to buy that intellectual property back. Presumably, if faculty develop some courseware here at Berkeley, they will be able to use it, but Irvine might have to pay for it. Again, the big consideration is what the deal looks like. Berkeley and/or the faculty member may own the courseware, but that's not where the university's stake lies; the university's stake may be in what the deal is. What are the policies for faculty using the stuff that they own, at least with regard to the university's future?

Meeting Program | List of Participants | Proceedings

Introduction and Overview

Our original intent with the University Teaching as e-Business research project was to begin to bring some order to the myriad on-line ventures in which both new and old higher education providers were engaging. Our focus has been on the placement of research universities, as initiators and respondents, in this universe. We were especially interested to see whether, with discussion and analysis, we could define a common language and reveal underlying patterns that would be useful for higher education decision-makers and scholars alike. At the peak of the confusing frenzy, in 1999, these concerns seemed especially timely. Needless to say, the landscape shifted as much between 2000 and our October 2001 meeting as it had in the few years prior to 1999. It is just this rapid pace of change -- in business models, technologies, stakeholder demands and attitudes--that drove our original interest in issues of typology, categorization, and conceptual models. Cataloguing these shifts and rapidly disseminating our work has been an important goal of this project. The progress we have made to date is reflected in the materials and papers on this website.


With generous support from the A.W. Mellon and Hewlett Foundations, we held a number of planning meetings in early 2001 (March 2001 Meeting Summary) . It was clear from these meetings that there were five broad areas that were in need of further exploration and discussion:

  • The tensions between economics, education, and culture.
  • The costs, benefits, and risks of e-learning ventures to the institution.
  • The factors that influence decision making, including how to define niche and determine viable structures for e-learning ventures.
  • The placement of e-learning initiatives within or outside of the institution, as reflected by the array of business models that are currently available.
  • The establishment of a common conceptual framework and the fleshing out of a possible future research agenda.

As preparation for the October meeting, we assembled:

  1. Background readings;
  2. Twelve detailed case studies ; and
  3. A Typology Overview for Organizational and Funding Models in E-Learning(PDF document)


(Complete list of meeting participants)

The October meeting assembled a stellar group for discussions of specific areas in more depth. The diversity of views represented at this meeting raised fresh questions and possible new solutions to understanding the significant external and internal pressures facing universities in the marketplace for higher education. We were not interested in facilitating conversations among like-minded individuals, as the complexity of the questions being asked demands multidimensional and interdisciplinary approaches. Instead, we insisted on involving a mix of experts with backgrounds in ICT research and implementation, higher education administration, social science scholarship, foundation program development, and entrepreneurship. In that we succeeded admirably.

Saul Fisher’s background paper, Teaching and Technology: Promising Directions for Research on OnlineLearning and Distance Education in the Selective Institutions provided an essential scaffolding for many of our discussions. Not only did we focus on what we knew, but we spent a significant amount of time exploring what we needed to know, and how we might develop methodologies for knowing it. As you read the proceedings, you will see that the theme of potential future research agendas appears again and again.


After reviewing the transcripts of the meeting, we decided that their high quality warranted asking individual authors and respondents to review and revise their contributions in light of the discussions. The results of their efforts form the basis of this collection. Although both they and we have done significant editing of the original transcripts, we did not attempt to force the papers into one editorial style; rather, each represents the style and perspective of its author. Some authors chose to rework their talks into formal papers, and some authors chose the extemporaneous tone that emerged on the transcripts. In some cases, authors also integrated the Q&A sessions into their talks.

We thank all of the authors for their contributions and for generously agreeing to include them on this site. Additional editing of the proceedings has been provided by Shannon Lawrence, the assistant director of the HEDA project, and by Jenny L. White.

View Meeting Proceedings


(by invitation only)

Friday, October 26

Welcome: Diane Harley and Saul Fisher

E-Learning Trends and Pressures Defined: Industry Views - University Views

What lessons (Questions, Issues, Concepts) are key for campus planning and implementation? What is known and what needs to be investigated?



  • Diane Harley, Ph.D., Research Associate, Center for Studies in Higher Education, UCB

Strategic Planning and Implementation I: The Challenge of Adapting Organizations and Creating Partnerships to Target New Markets

Why and how are universities capitalizing on new technologies to enhance or scale activities?

What are the costs, benefits, and risks of e-learning ventures to the institution?

What are the business model choices that have evolved, and their costs and benefits?

Where are e-learning initiatives placed within the institution?

What is the role of Extension and continuing education divisions, and the relationship of their activities to the core institution?

What are the challenges and opportunities of wider global markets?



  • Professor David Collis, Yale School of Management
  • Professor Julius Zelmanowitz, Vice Provost, Academic Initiatives, Office of the President, University of California


  • Professor David W. Breneman, Dean of Curry School of Education, University of Virginia


Saturday, October 27

Strategic Planning and Implementation II: The Challenge of Adapting Organizations and Creating Partnerships to Target New Markets

UNext, UMass Online, Stanford

  • Cardean and UNext: Dr. Geoffrey M. Cox, Cardean University President /UNext Vice President for Academic Affairs
  • UMass Online: Dr. Jack Wilson, CEO, UMass Online
  • Stanford: Dr. Andy DiPaolo, Executive Director, Center for Professional Development; Senior Associate Dean Engineering, Stanford University
  • Moderator: Professor David Kirp, The Goldman School of Public Policy, UCB

Global Perspectives

The Possibilities and Limitations of Emerging Technological Innovations

What are emerging innovations in e-learning?

How does the pace of change in the technologies influence institutional decision-making about e-learning, including the locus/loci of authority?

What are assumptions about (and plans for) the possibilities for learning that will be opened up by future technologies?

  • Internet2: Associate Vice Chancellor John W. McCredie, Information Technology (AVC-IT), Chief Information Officer, UCB
  • Learning Environments: Professor Lawrence Rowe, Computer Science, EECS, UCB
  • Learning Management Systems: Gordon Freedman, Founder, Knowledge-Base; Director, Strategy & Alliances,
  • Learning Federation/Digital Promise: Thomas A. Kalil, Assistant to the Chancellor for Science and Technology, UCB



Discussion of Developing Research Agendas/Foundation Views

Open discussion of possible research projects/collaborations


  • Diane Harley, Ph.D., Research Associate, Center for Studies in Higher Education, UCB
  • Dr. Saul Fisher, Program Officer, The Andrew W. Mellon Foundation, New York
  • Professor David Kirp, The Goldman School of Public Policy, UCB

Meeting Participants

  • Professor Hal Abelson, Computer Science and Engineering, MIT; Co-Chair, MIT Council on Educational Technology
  • Mary Beth Almeda, Assistant Dean, Online and Distance Education, UCB Extension
  • Malte Beinhauer, Researcher, Institute for Information Systems, Saarland University, Germany
  • Ulrike Bentlage, Consultant, The Boston Consulting Group
  • Professor David W. Breneman, Dean of Curry School of Education, University of Virginia
  • Dr. Michael P. Carter, Acting Program Director, Alliance for Life-Long Learning
  • Professor David Collis, Yale School of Management
  • Jon Conhaim, Director, e-Berkeley, UCB
  • Dr. Geoffrey M. Cox, Cardean University President /UNext Vice President for Academic Affairs
  • Professor Chris Curran, Founding Director, the National Distance Education Centre, Dublin City University
  • Dr. Barbara Gross Davis, Assistant Vice Provost, Undergraduate Education, UCB
  • Dr. Andy DiPaolo, Executive Director, Center for Professional Development; Senior Associate Dean Engineering, Stanford University
  • Dr. Dieter Dohmen, FiBS, Education and Socio-Economical Research & Consulting, Koeln, Germany
  • Dr. John A. Douglass, Senior Research Fellow, Center for Studies in Higher Education, UCB
  • Professor Charles Faulhaber, Spanish & Portugese; Director, Bancroft Library, UCB
  • Dr. Saul Fisher, Program Officer, The Andrew W. Mellon Foundation, New York
  • Gordon Freedman, Founder, Knowledge-Base; Director, Strategy & Alliances,
  • Marytza Gawlik, Ph.D. Student: Policy, Organization, Measurement and Evaluation, UCB
  • Professor Roger Geiger, Higher Education, Pennsylvania State University
  • Michael Goldstein, Member of Dow, Lohnes and Albertson, Washington DC
  • Diane Harley, Ph.D., Research Associate, Center for Studies in Higher Education, UCB
  • Professor I. Michael Heyman, Boalt School of Law; Chancellor Emeritus, UCB; Director, Center for Studies in Higher Education, UCB
  • Terry Hilsberg, Founder and CEO, NextEd Limited
  • Vice Chancellor James Hyatt, Budget & Finance; Chief Financial Officer, UCB
  • Dr. Sally Johnstone, Executive Director, Western Cooperative for Educational Telecommunications (WICHE), CO
  • Thomas A. Kalil, Assistant to the Chancellor for Science and Technology, UCB
  • Professor David Kirp, The Goldman School of Public Policy, UCB
  • Dr. M. S. Vijay Kumar, Assistant Provost and Director of Academic Computing, MIT
  • Dean Robert Lapiner, Continuing Education and Extension, UCLA
  • Kurt Larsen, Centre for Educational Research and Innovation, Organization for Economic Co-operation and Development (OECD)
  • Shannon Lawrence, Assistant Director, Higher Education in the Digital Age Program, Center for Studies in Higher Education, UCB
  • Steve Lindauer, Senior Vice President, Strategy & Business Development, eCollege, Denver, CO
  • Professor Peter Lyman, Associate Dean, School of Information and Management Systems (SIMS), UCB
  • Professor Christina Maslach, Ph.D., Psychology; Vice Provost for Undergraduate Education, UCB
  • Dean Gary Matkin, UC Irvine Extension
  • Associate Vice Chancellor John W. McCredie, Information Technology (AVC-IT), Chief Information Officer, UCB
  • Larry Merkley, Consultant for Provost and Executive Vice Chancellor on Information Technology, UCSC
  • Thomas I. Nygren, Program Officer, The Andrew W. Mellon Foundation, New York
  • Professor Sheldon Rothblatt, History; Director Emeritus, Center for Studies in Higher Education, UCB
  • Professor Lawrence Rowe, Computer Science, EECS, UCB
  • Dr. Marshall Smith, Program Officer for Education,Hewlett Foundation, Menlo Park, CA
  • Professor Philip B. StarkStatistics; Faculty Assistant in Education Technology, UCB
  • Professor Martin Trow, Professor, The Goldman School of Public Policy; Director Emeritus, the Center for Studies in Higher Education, UCB
  • Professor Marijk van der Wende, Center for Higher Education Policy Studies (CHEPS), Netherlands
  • Professor Hans N. Weiler, Political Science and Education, Stanford University; Max Planck Institute for Human Development, Berlin
  • Dr. Jack Wilson, CEO, UMass Online
  • Professor Julius Zelmanowitz, Vice Provost, Academic Initiatives, Office of the President, University of California

Teaching And Technology: Promising Directions for Research on Online Learning and Distance Education in the Selective Institutions 
by Saul Fisher, The Andrew W. Mellon Foundation (PDF document)

Regulation of e-Learning: Regulating the Medium and the Messenger 
by Michael B. Goldstein, Dow, Lohnes & Albertson, pllc

Investing in Educational Technologies: The Challenge of Reconciling Institutional Strategies, Faculty Goals, and Student Expectations 
by Diane Harley, Director, Higher Education in the Digital Age Project, CSHE

Trade in educational services: Trends and Emerging Issues (Working Paper) 
by Kurt Larsen, Rosemary Morris, and John P. Martin, Organization for Economic Co-operation and Development (OECD)

Typology Overview for Organizational and Funding Models in E-Learning 
prepared by Shannon Lawrence, CSHE (PDF document)

eLearning, Is it over? 
by Jack M. Wilson, CEO, UMass Online 

  • Diane Harley, Ph.D., Research Associate, Center for Studies in Higher Education, UC Berkeley
  • Chancellor Emeritus and Professor I. Michael Heyman, CSHE and Boalt School of Law, UC Berkeley
  • Professor and Dean David W. Breneman, Curry School of Education, University of Virginia
  • Professor David Collis, Yale School of Management
  • Dr. Saul Fisher, Program Officer, CEUTT, Andrew W. Mellon Foundation
  • Gordon Freedman, Director, Strategy & Alliances,
  • Professor Roger Geiger, Head, Higher Education Program, Pennsylvania State University
  • Michael Goldstein, Dow, Lohnes, and Albertson, Washington DC
  • Professor David Kirp, The Goldman School of Public Policy, UC Berkeley
  • Dean Gary Matkin, UC Irvine Extension
  • Professor Martin Trow, Goldman School of Public Policy, UC Berkeley
  • Chancellor Emeritus David Ward, University of Wisconsin; President, American Council of Education
  • Professor Julius Zelmanowitz, Vice Provost, Academic Initiatives, Office of the President, University of California

The draft case studies below are an internal resource for the University Teaching as E-business? research project. They are intended to provide a general overview of selected e-learning ventures and reflect information gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. Our primary task was to assemble the relevant sources in a form that would be useful to our research associates and reflected the changing nature of university and corporate activities.

These case studies were compiled by Shannon Lawrence, the Assistant Director of the Higher Education in the Digital Age program. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe. Goldie Blumenstyk, Scott Carlson, Dan Carnevale, Sarah Carr, Stanley N. Katz, Geoffrey Maslen, Florence Olsen, and Jeffrey R. Young provided invaluable insight through their detailed articles.

Unless otherwise noted, interviews with company officials were not included. The case studies were originally released in October 2001 and updates were made to a number of these case studies in March 2002. Due to the fluidity of the e-learning marketplace, information presented may not reflect recent changes in these programs. Please contact Shannon Lawrence with corrections or updates to the case studies below.

Case Studies:

Update: Since these case studies were first published in October 2001, the e-learning industry has seen some changes. Most notably, NYUonline closed its doors the following month, citing a weakened economy. By January 2002, George Washington University's Prometheus was purchased by Blackboard, MIT OpenCourseWare began its pilot phase, and Army University Access Online (AUAO), more commonly known by it's portal name, eArmyU, met its enrollment goals for 2001 and issued new RFPs to add more partner institutions. UNext signed marketing deals with Thomas Learning and Knowledge Universe to bolster lagging sales, and AOL opened an education portal that directed users to Western Governor's University, among others. WGU has also established a scholarship program for Olympian teachers to receive master's degrees and is concerned over possible cuts in expected federal funds. Fathom has shifted their marketing approach and added several hundred mostly noncredit corporate training courses by SmartForce, Zoologic, Kaplan, and, which increased their overall offerings by 20%.

Army University Access Online (AUAO)

NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.



E-learning model: portal, distance education 
Funding model: government 
Leadership: PricewaterhouseCoopers LLP 
Revenue Streams: government contract 
Funding Source: government contract 
Profitability expected: none, but servicemember retention and technical saavy are expected to increase 
Strengths: draws on knowledge/courses/accreditation from educational partners, SCORM standards make information uniform across platforms, free to soldiers 
Challenges: expense, scalability

Launched in January 2001, Army University Access Online (AUAO) is designed to provide access to quality education for enlisted soldiers around the globe, helping them further their current career or prepare them for a new one, while providing the Army with top preparation for its forces. AUAO brings together a select consortium of education institutions via a state-of-the-art web portal,, with comprehensive student support and quality control. eArmyU is part of a series of dynamic changes that the Army is engaging in to transform the Army, and how the Army educates its soldiers. The mission of eArmyU is to increase retention by allowing soldiers to earn credits, degrees and certificates at low or no cost to them while they serve on active duty and to develop educated, technology-savvy soldiers who can succeed in the network-centric missions and battlefields of the 21st century.


AUAO provides many educational benefits to soldiers, including a high quality classroom experience, comprehensive student services, full course credit portability between institutions, and the granting of credit for military training and experience.

AUAO’s degree and certificate options are expansive, ranging from general education to health services to technology and business. Students can choose from more than 87 degree programs from more than 24 different universities throughout the United States to fulfill their educational and career goals. AUAO also offers a highly flexible online course catalog that allows soldiers to identify available programs and determine whether they must complete any pre-requisite courses in order to enroll. In addition to the comprehensive course catalog, soldiers are able to access a broad array of student services online. To support students as they select and then work toward the completion of their degree, AUAO provides a full scope of advising and mentoring services via the web and telephone, as well as in-person. Specifically, soldier-students have access to academic support services at the portal, degree, course and subject levels through counselors, program mentors, tutoring, and instructors. Soldiers receive 100% of the funds required for tuition, books and course fees, as well as a personal laptop, printer, Internet access and email account.[1] In addition to 24-hour technical support, AUAO provides soldiers with assistance in determining a program of study, registering for courses and transferring credits.

AUAO is made up of 5 program communities: Arts, Humanities & Social Sciences; Communications & Business; Health, Nutrition & Education; Mathematics & Science; and Vocational Skills. There are several AUAO Program Mentors assigned to each Program Community who advise students pursuing a degree that falls within that community. Students are assigned a Program Mentor based on their chosen degree of study. Program Mentors have vast educational experience in the degree programs within their program community and can provide valuable academic guidance to soldier-students.

Each soldier-student is provided program links specific to his/her field of study, a link to his/her home institution, and important Program Mentor contact information. Using this information, soldier-students can begin to establish a distance-learning community with their Program Mentor and other students pursuing degrees in the same or similar areas of study.

Soldier-students are provided all the tools necessary to operate effectively and efficiently as an online student in a technology package training session that they will be scheduled to attend when they enroll in the program. The technology package provided to individual students includes a laptop computer and printer, Internet service provider and email accounts, live tech support through on-site specialists, call-in help desk and computer training.

The eArmyU portal is the one stop where soldier-students can access course work, educational advisory services, online registration services, and online technical and administrative support. It is also the doorway through which Army Education counselors, program mentors, and others access tools that enable them to provide online support to soldier-students. Finally, the portal provides Army officials, universities and eArmyU staff with access to program data.

When soldiers use the portal, they have to log in only once to verify identity, instead of having to log in each time they enter secure portions of the member colleges' Web sites. Books are ordered automatically when the soldiers register for classes. Most importantly, information presented has a consistent "look and feel" as a result of the SCORM standards developed by the Department of Defense. The Sharable Content Object Reference Model (SCORM) is a set of interrelated technical specifications built upon the work of the AICC, IMS, and IEEE to create one unified "content model." These specifications enable the reuse of Web-based learning content across multiple environments and products. The processing of tuition payments and other business functions of the portal are less well-automated.


AUAO claims to have the best-in-class providers of online educational programs and services, technology components, and program management (see Table 1). These providers compose the backbone to the Army's distance education programs delivered through the portal. AUAO members are market-leaders in their respective industries and are experienced at working collaboratively to deliver integrated solutions to customers. The key AUAO members are PricewaterhouseCoopers LLP, the Council on Academic Management, as well as an impressive group of education partners and learning technology and infrastructure support providers. PricewaterhouseCoopers, LLP is the integrator for the AUAO program. Council on Academic Management (CAM)[2] assisted in establishing the framework for developing standards, policies, and quality assurance procedures for selecting and managing higher education partners.

Collectively, these education partners have delivered more than 3,000 online courses to more than 250,000 students. All institutions offering degrees belong to the Servicemembers Opportunity Colleges Army Degree (SOCAD, for undergraduate degrees) or SOC (for graduate degree) programs, a consortium of more than 1,400 colleges that already offer courses to soldiers and their families. This requirement guarantees transferability of credit among schools and maximum credit for prior learning and military experience. In addition, their home institution evaluates all prior learning experiences (including military training and experience and college-level testing) for maximum credit toward the individual program of study.

AUAO has also partnered with three leading learning technology providers: Blackboard, Saba, and PeopleSoft.[3] Blackboard and Saba are providers of online tools, learning platforms, and learning management systems. PeopleSoft provides the leading market information system for managing education support services. AUAO’s technology partners provide a comprehensive, integrated technical solution on a stable platform. AUAO also provides soldier-students with hardware and software solutions using infrastructure support providers such as HP and Compaq for notebook computers and printers, Intel Online Services for managed hosting,[4] for academic tutoring, MBS Direct[5] for textbook distribution, and the GALILEO digital library, among others.


Education Partners

Technology Partners (InfraStructure Support)

Anne Arundel Community College


Baker College


Central Texas College


Cochise College

Precision Response Corporation (PRC)

Embry-Riddle Aeronautical University

Intel Online Services

Excelsior College


Fayetteville Technical Community College

Franklin University

MBS Direct

Kansas State University

Michigan Virtual University (MVU)

Lansing Community College


North Carolina Agricultural and Technical State University


Northern Virginia Community College

Technology Partners (Learning Management)

Northwest Missouri State University


Nova Southeastern University


Pennsylvania State University World Campus


Rio Salado Community College


Saint Joseph's College of Maine


Saint Leo University


State University of New York, Empire State College


Thomas Edison State College


Troy State University


University of Texas at Arlington


University of the Incarnate Word


Utah State University



Officials from PricewaterhouseCoopers worked on a $453-million dollar government budget with 60 subcontractors to build the Army's portal, including more than 20 accredited institutions that deliver courses online. The government had expected to pay upwards of $600-million for the project. The company had to create electronic "interfaces" for 10 commercial software applications from different vendors so that the applications could exchange information. The portal became operational during the summer of 2001 after testing the program in January with 15,000 students at bases in Georgia, Kentucky, and Texas.

The distance education industry was surprised at how quickly all of the necessary pieces for the portal were put together. Before the Army sought bids to build an online-education portal, technology companies had not gone ahead with the difficult technical work needed to create such an infrastructure. The Army's "$453-million carrot" had the effect of speeding up the development that needed to be done before online-learning communities could really take hold. The question still to be answered is how well this infrastructure will handle large communities like the Army's, which is expected to expand to include 80,000 soldier-learners within five years. If the site is expanded to accommodate families of soldiers, the numbers of students could reach the millions, making the army the largest broker and customer of distance learning in the US.


AUAO announced that it met its enrollment goals for 2001, providing distance education opportunities to more than 12,000 soldiers during 2001, more than 50% of whom were new to both the Army's educational program and to postsecondary education. Though the program is experiencing growing pains in its relationships with education providers, mostly a result of the Army's call to offer standardized tuition and quarterly academic schedules, overall the program was a success and received kudos for its productive startup by partner institutions. In December 2001, integrator PriceWaterhouseCoopers issued new RFPs to add more partner institutions this year, who will join eArmyU in the spring 2002. To increase participation, PriceWaterhouseCoopers reduced its requirement that institutions offer complete online degrees; now colleges are able to offer "partial-degree programs" which provide 50%, instead of 100%, of degree-related courses. Critic David Noble published Digital Diploma Mills, warning that the military's involvement in spurring technology in distance education could lead to standardization and a reduction in academic freedom.



1 Soldier-students must successfully complete 12 semester hours of eArmyU courses during their first two years of eArmyU participation. Failure to successfully complete required courses requires repayment of the pro-rated value of the technology package. As with current tuition assistance programs, the soldier-student must reimburse the government for the costs of failed courses or those courses that the soldier-student does not complete for reasons other than military (as certified by the unit commander).

2 The members of CAM include: Michigan Virtual University, Southern Regional Education Board (SREB), EDUCAUSE, America Distance Education Consortium (ADEC), Hispanic Association of Colleges and Universities (HACU), Western Interstate Commission for Higher Education (WICHE), American Indian Higher Education Consortium (AIHEC), and University of Wisconsin Academic ADL Co-Lab.

3 Blackboard has a user base of more than 2.1 million people worldwide. Saba is an active participant in an industry-wide effort to develop systems that comply with SCORM standards. More than 50 Global 2000 companies and government agencies rely on Saba to support their education and training programs. More than 450 institutions, including some of the largest universities in the United States, use PeopleSoft's SA product.

4 currently serves over 50 colleges and universities across the nation.

5 MBS Direct is the nation's largest provider of course material distribution services to institutions of higher education offering distance-learning programs. MBS Direct currently serves nearly 300 institutions.



NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.


E-learning model: portal 
Funding model: for-profit spinoff of Columbia University 
Leadership: Ann Kirschner, CEO; Board of Directors; Academic Advisory Council 
Employees: 30 in New York; 8 in London 
Main Office: 5th Avenue in New York 
Revenue Streams: e-learning, consulting 
Funding Source: $28.7 million in uncontrolled funds from Columbia University 
Profitability expected: 2003 
Strengths: authenticated content, brand names 
Challenges: economy, bust

Fathom Knowledge Network Inc. ("Fathom") is a for-profit spin-off of Columbia University, established in April 2000, that operates as a consortium of elite education and cultural institutions (see Table 1). On its website (, Fathom offers over 600 courses from partner institutions, boasting 800 faculty contributors, 750,000 unique visitors, 100,000 registered users and hundreds of students enrolled in online courses.


Member Institutions

Course Providers

Columbia University

Arizona State University

Cambridge University Press

Columbia Interactive Arts & Sciences

London School of Economics and Political Science

Distance Learning Inc.

New York Public Library

FT Dynamo

University of Chicago

Iowa State University

University of Michigan


British Library

Michigan State University

American Film Institute

Online Learning Net


Purdue University

Woods Hole Oceanographic Institution

Sports Business University

Victoria & Albert Museum

Syracuse University

Science Museum

University at Buffalo - The State University of New York

Natural History Museum

University of California Extension Online


University of Michigan - Flint


University of Washington


Virginia Polytechnic Institute and State University





*All partner universities are ranked as R1, the Carnegie Institution's higher education classification system, and content provided through other course developers originates at R1 institutions.


Fathom distributes lectures, interviews, articles, and exhibits by faculty and experts from some of the world's leading universities, libraries, museums, and disseminators of research. Online courses and seminars are available, as well as books and other products. Unique reference content spans all disciplines and fields of study and is organized in "knowledge trails," which are groups of Fathom features or reference entries that explore a common subject or theme.

Unlike other e-learning ventures, Fathom seeks to provide a more comprehensive, interactive site that allows the user to chat with the professor and to purchase the book under discussion, without ever leaving the site. Fathom’s competitive edge, however, is its high quality, authenticated content. All content is attributed to the contributing institution and its faculty or staff. Partner institutions contribute mainly content and brand and pay for the development of their respective courses and seminars. Course development takes anywhere from three months to a year. Fathom does not develop original courses, but takes a commission of about 20 percent on each sale.

Fathom does not offer degrees, though individual institutions may offer credit for courses taken through Fathom. Classes that can be taken for college credit or for personal enrichment cost up to $500 for 7 to 12 weeks of instruction. Shorter seminars cost between $50 and $200.


In order to maintain quality control, Fathom relies on two separate groups: 1) a group of faculty and administrators from Columbia University Teacher’s College, which approves all courses offered on the site, and 2) an academic advisory council that oversees other academic content on the website to ensure Fathom’s standards of academic and editorial integrity. The Council is chaired by Jonathan Cole, Provost of Columbia University, and includes leading representatives from the Fathom consortium who represent a range of disciplines and responsibilities within academic and intellectual communities. The Council was established by Fathom's Board of Directors to provide strategic oversight of Fathom programming, to alert Fathom to scholarly trends, and to serve as a resource on all matters that pertain to either academic content or the academic community.

The Academic Council advises and supports Fathom in its mission to have programming that is of the highest academic quality and that also welcomes the diversity of opinion accompanying the creation of original scholarship and knowledge. The Council helps ensure that Fathom's content reflects the integrity of its universities, libraries, museums, and research institutions, and the ideas of individual faculty and staff members. The Council, chaired by Jonathan Cole, Provost of Columbia University, includes leading representatives from the Fathom consortium who represent a range of disciplines and responsibilities within academic and intellectual communities.

Ann Kirschner, CEO of Fathom, maintains a close relationship with the Columbia University’s Executive Vice Provost, Michael Crow, in order to better understand how the university, and its decision-making processes, function. Columbia University maintains a five-member faculty panel that reports on Fathom’s progress to the faculty senate.


Fathom originally intended "to capture the high-end knowledge/education market by creating a top knowledge destination web site." (Columbia, April 3, 2000) The venture planned to rely on users who, intrigued by informative articles, would buy scholarly books and distance-education courses produced by a number of institutions, from which Fathom would get a marketing fee or a percentage of a sale. Only two months after the site went online, Fathom's original business plan did not show potential for attracting either the customer base or outside financing that its developers hoped. In February 2001, Fathom changed its business strategy to focus on students seeking courses in professional development and on students interested in lifelong learning, and to de-emphasize marketing to students seeking to complete their degrees. Fathom now offers users more short, free courses to introduce them to the idea of online education, before attempting to try to sell them on longer, more expensive courses. Fathom’s new primary direction is providing noncredit courses. This new strategy parallels a partnership with George Washington University's open architecture course software, Prometheus. Utilizing Prometheus software, the seminar material is presented in a variety of media, including text, images, audio, video, and animation. Following this "virtual lecture," participants can join discussion boards, take a self-assessment test, or learn more through related educational links. The free seminars are expected to take between a half-hour and two hours to complete.

Fathom also scaled back marketing and advertising in order to cut costs and keep the project afloat, and is concentrating instead on building a word-of-mouth customer base of students, professors, and alumni from the member institutions. Based on this new approach, the company expects to be able to begin covering its regular annual operating costs for technology, personnel, and marketing by the beginning of 2003.

Fathom also provides consulting services, which appears to be a new strategy. Most recently, Fathom was hired by the AARP to redesign their website and provide educational content.

Fathom’s ability to continue operating in new directions is partly attributable to the willingness among Columbia University’s administration to make Fathom grow through university funding and support. Columbia considers Fathom a significant part of its three-part digital media strategy, which involves the University arena, the interface between the University and the market, and the market arena. Virtually all of the initial financing, $18.7 million, came from Columbia, and the university dedicated another $10 million to the project in February 2001 to keep it operational for an additional two years, at which time it expects to be self-sustaining. Financing for Fathom has been generated through the university’s Strategic Initiative Fund, which funds innovate projects, include many digital ventures, through patent revenue. This fund is the only uncontrolled revenue stream of the university because it comes with no company or government agency agenda. Executive Vice Provost Michael Crow, who prides himself on being an "academic entrepreneur," is in charge of the fund. Mr. Crow believes that funding strategic learning initiatives will expand the traditional role of the university but that doing so requires "us[ing] knowledge as a form of venture capital."


Fathom began advertising in October 2001, targeting mostly the consumer market through ads in The New Yorker and other publications, and had partnered with Elderhostel in November. (It is notable that Columbia opened a portal site in November 2001 to showcase miscellaneous online university offerings, though there were no expectations that it would draw an audience away from Fathom.) By February 2002, however, they had shifted their approach and added several hundred mostly noncredit corporate training courses by SmartForce, Zoologic, Kaplan, and, which increased their overall offerings by 20%. This falls within the range of their original business plan, though the companies won't become full partners in the Fathom consortium.


The George Washington University (GW)

NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.


(Updated information available below.)

Websites: , 
E-learning model: learning management system (Prometheus) 
Funding model: for-profit subsidiary of GW (Prometheus and GWS), internal academic unit of GW (CPS) 
Leadership: Roger Whitaker, Dean of CPS, CEO of GWS 
Employees: Prometheus = ?, GWS = 75, CPS = 40 
Main Office: Washington DC 
Revenue Streams: license fees (Prometheus) 
Funding Source: GW programmatic investment 
Strengths: credibility gained from internal organization, ability to offer credit and non-credit courses (CPS/GWS), flexibility (Prometheus)

The George Washington University (GW), located in Washington D.C., uses a variety of distance learning techniques to reach students outside the traditional classroom. These include classes delivered via technologies such as videotape, compressed digital video via telephone lines, satellite, cable television, CD-ROM, and classes offered on the Internet or at off-campus study centers. Partnerships with other universities and organizations facilitate tailoring degree and certification coursework to suit specialized audiences. Internally, GW has committed to Internet technologies as a way to transform existing campus experiences and communities as well as also move the faculty and staff toward embracing the challenges of online education. To prepare, GW has created the Millennium Project, a $126 million project to build the E-Technology Platform and create an Internet-enabled business. This project is a major strategic push toward a centralized e-campus.

In particular, there are two types of e-learning strategies at GW from an institutional perspective. The first is Prometheus, a learning management system designed as an enterprise-wide solution. The second strategy at GW is more of a niche strategy, with several initiatives, such as the for-profit spin-off beginning in the summer of 2001, called GW Solutions that will target GW’s existing core markets (such as the government, regional corporations in the Washington metropolitan area, and some international markets), and the College of Professional Studies, a new degree-granting unit.



Prometheus is a community-based open architecture software platform. In 1997, administrators at The George Washington University were looking for a quick and easy way to help faculty members get online, either by teaching Web-based distance-education courses or by introducing online components to traditional courses. Technicians at the university decided to create a courseware system [1] in answer to the need for an easy-to-use, flexible and scalable enterprise-wide learning platform designed to allow customization for faculty, administrators, and students. The system was eventually named "Prometheus," for the Greek god who provided fire to man.

Prometheus was developed over an 18-month period, with another 18 months in intensive testing through alpha and beta stages at GW and later at Vanderbilt University. During this time Prometheus was rapidly adopted by faculty at both campuses because of its user-friendly, form-driven, question-and-answer format that walks instructors through course creation and content import quickly and easily. In the first 90 days after the 1998 launch of Prometheus at GW, 100 faculty members had logged on and created courses. Currently, over 1,000 faculty members are teaching 1,800 courses online with little or no formalized training. Some administrators have suggested that Prometheus has helped some professors at GW embrace distance education more quickly than they might have had the courseware been more foreign. Additionally, 17,000 students-or 85 percent of The George Washington University's student population-are using Prometheus.

Like Blackboard and WebCT, Prometheus is a courseware platform, but it supplements courses internally and serves as a platform for doing business externally. Built on a ColdFusion application layer, Prometheus is designed to grow quickly and easily while integrating cleanly with database, browser, and server functions. ColdFusion's modularity makes it easy for partners to build applications in various languages and then plug them directly into the Prometheus architecture. Prometheus also has user-driven features, such a math editor, an integrated e-reserve system that ties in to individual libraries, the ability to accept international characters and symbols, and automatic translation into HTML.

Professors at George Washington and Vanderbilt use Prometheus to let students in traditional courses have discussions, post lecture notes, and make presentations online. GW also uses Prometheus as the platform for its online distance-education courses. Content is developed by the faculty who use the software. With little or no training, instructors can author and edit content directly inside the learning management system as well as import content from outside applications such as Microsoft Word, PowerPoint, and Excel. Instructors can easily enhance their content by uploading movies, images, and audio from multimedia files. Prometheus also gives instructors the ability to create learning objects outside the course context, group them into "content modules," then insert and rearrange them within courses. Such modules might contain outline items, assignments, tests, projects, lectures, files, and discussion topics. Modules make content independent of any particular course, allowing reuse in multiple courses. Class information and assignments can be downloaded directly to any PDA running the Palm OS.

GW works with a number of academic partners and also provides custom solutions through specialized consulting services including product customization, systems integration, course conversion consulting, co-development, technical support, and hosting. The George Washington University leadership did not originally intend to market Prometheus to other universities, but in March 2000, GW began licensing Prometheus to partner institutions and it has since been licensed to over 35 universities (see Table 1).


The George Washington University

IT2 Group

The Wharton School


Columbia Business School

Kentucky Virtual University

Teachers College at Columbia University

Nazarene Bible College

University of Texas at Austin College of Engineering

New School Online University

London Business School

New York University School of Continuing and Professional Studies

United States Open University

Norwich College

Middlebury College

Robert Morris College

Boston University

Rochester Institute of Technology

University of Michigan College of Engineering

SAMW, Inc.

University of Texas TeleCampus

Saint Mary's College of California

Stanford Graduate School of Business

Santa Clara University

Stern School of Business

Santa Monica College

University of California, Berkeley

Siena College

<>pUniversity of California, Berkeley - Haas School of Business

Soka University of America

University of California - Irvine

Southern Arkansas University

California State University - Monterey Bay

The University Alliance for Life-Long Learning, Inc.

California Virtual Campus

University of Baltimore

The Central Texas College

University of Rochester Medical Center

The University of Wisconsin Learning Innovations

University of Texas at Houston Health Science Center

University of Wisconsin - Milwaukee

University of Toronto School of Continuing Studies

University of Wisconsin - Stevens Point

University of West Florida

University of Utah

Utica College

Fathom Knowledge Network Inc.

Valparaiso University


Vanderbilt University

Golden Gate University

Washington University in St. Louis

Indiana Institute of Technology

Washington University - Olin School of Business

In keeping with collaborative academic practice, Prometheus is a community source code product. Partners are encouraged to share code and advice in an open environment-facilitating infinite customization opportunities. Prometheus views partners as part of a development community-leveraging the knowledge and expertise of each institution. Community source code flexibility allows IT administrators to create new features, design custom applications, integrate with existing campus systems, share solutions among developers, personalize interface look and feel-at institution, department, or group level. Instructors and administrators are also encouraged to collaborate with other colleges and universities, sharing information such as content modules, courses, learning objects, and online teaching techniques. Prometheus is grounded in firsthand input from instructors. For instance, Prometheus developers hear directly from The George Washington University faculty at regular monthly meetings. Feedback from these sessions fuels product development.

Prometheus also relies on service partners for technological input and support (see Table 2).



Cerebellum Corporation, the nation's leading producer of educational videos and DVDs for high school and college students, has taken the educational media category by storm and has experienced phenomenal growth since its inception in 1993. Cerebellum produces the Standard Deviants brand of educational videos, DVDs and software. Recommended by more than 500 teachers and college professors, the Standard Deviants cover the most difficult high school and college courses. Each Standard Deviants title is written by an academic team comprised of professors from leading universities. Presented by an engaging and energetic cast of twenty-something actors and comedians, these award-winning titles cut through the confusion with a clear and concise format, high-tech computer graphics, and a fun approach to serious education. IN the Fall of 2000, Standard Deviants TV premiered on PBS and was named a "Top 10 New Show for Kids" by TV Guide and a Parents' Choice "Recommended" Winner.


Eduprise is the leader in designing, developing, and deploying private-labeled, end-to-end e-Learning solutions for education providers. Eduprise clients include higher education institutions, for-profit training and education firms, and corporate universities. Eduprise provides a complete range of services that are tailored to the needs of each client, achieving key strategic objectives through the application of e-Learning technology.


Since 1995 Embanet Corporation has been the leader in Converting, Developing and Delivering courses and training over the Internet. Embanet provides integrated and scalable learning management solutions to more than 350 academic and corporate organizations worldwide including The Art Institute Online, The Argosy Group, Becker Conviser, the entire state of Washington through Washington Online and the entire province of Ontario through OntarioLearn.


Macromedia's software brings e-business innovation within everyone's reach. Technology professionals worldwide rely on ColdFusion to rapidly and cost-effectively build their business on the Web. With a proven software foundation and a worldwide partner network, Macromedia products have enabled thousands of companies to deliver innovative Internet business solutions.

GW Solutions and the College of Professional Studies

Leaders at The George Washington University believe that they need to be able to offer both non-credit and for-credit types of offerings to the marketplace in order to be successful, so two new internal organizations have been developed to address these needs: GW Solutions (GWS), a for-profit subsidiary of GW and an offshoot of GW’s continuing education starting in summer 2001, and the College of Professional Studies (CPS), a degree-granting college, scheduled for operation beginning in fall 2001.

Under GWS, all of the non-credit professional development programs, formally under the University’s Center for Professional Development, will merge into one unit - including GW Television, the Center for Distance and Mediated Learning, Conference Management Services and off-campus marketing functions. GWS handles the nonacademic functions for CPS such as marketing, business development, customer service, consulting, teaming agreements, professional development, training, executive education and the production of distance education course modules.

The College of Professional Studies (CPS), the University’s ninth degree-granting unit, administers the University's off-campus credit courses and degree programs. The College also offers noncredit certificate programs, courses, and workshops through the Center for Professional Development. CPS will support the University’s other schools and colleges that offer off-campus programs with marketing, enrollment management and a variety of student and administrative services. In addition, CPS may develop its own degrees - Associates, Bachelors, and Masters of Professional Studies - that will be customized to address the learning needs of organizations and will be delivered under contract to partner businesses, government agencies, school systems, and other non-governmental organizations. The staff of instruction for College programs includes members of the full-time faculty of the University and academically qualified adjunct faculty from the professional community selected by the academic departments and schools. Instead of buying down the time, they would use their one day of consulting time.

CPS offers courses and programs at GW's Arlington Graduate Education Center, Alexandria Graduate Education Center, and Hampton Roads Center, all in Virginia, and at other off-campus locations in the District of Columbia, Maryland, and Virginia. All College off-campus offerings in Maryland are approved by the Maryland State Board for Higher Education; those in Virginia are approved by the Commonwealth of Virginia Council of Higher Education. The following degree and certificate programs are offered through the College of Professional Studies (see Table 3).


Columbian College of 
Arts and Sciences

Master of Arts in the fields of administrative sciences (human resources management and organizational management), criminal justice (computer fraud investigation and security management), legislative affairs, and telecommunication; graduate certificates in survey design and data analysis, leadership coaching, organizational management, security management, and computer fraud investigation.

School of Business and 
Public Management

Master of Business Administration; Master of Science in Information Systems Technology (management information systems); Master of Science in Project Management; Master of Tourism Administration.

School of Engineering 
and Applied Science

Master of Engineering Management; Master of Science in the field of engineering management; professional degrees (Engineer and Applied Scientist); graduate certificates in knowledge management and information security management.

Graduate School of Education 
and Human Development

Master of Arts in Education and Human Development in the fields of curriculum and instruction, educational technology leadership, educational leadership and administration, higher education administration, human resource development, and school counseling; Master of Education in the field of secondary education; Education Specialist in the fields of educational leadership and administration and human resource development.

CPS also works with the Center for Professional Development, which provides a broad spectrum of services focusing on innovative, nontraditional, career-oriented education. Among its programs are noncredit, graduate-level career certificate programs to prepare college graduates to become legal assistants, publication specialists, desktop publishers, public relations specialists, landscape designers, administrative managers, web developers, information systems specialists, multimedia product designers, and appraisers of fine and decorative art. Workshops, short-term courses, and intensive summer programs provide the opportunity for individuals to be informed of innovation in their fields.

An academic background appropriate for the program of studies contemplated is required. In addition, the applicant who has previously attended this or another college or university must be in good standing at that institution. An applicant who has been suspended from any educational institution for poor scholarship will not be considered for admission for one calendar year after the effective date of the suspension. Applications for admission are necessary for international students, though there is no application fee.

The normal academic workload during the regular academic year is not more than 10 credit hours for a student employed more than 20 hours per week and not more than 18 credit hours for a full-time student. During the summer a student may take a maximum of two courses during any one session. All general University regulations apply to students in the College of Professional Studies. In addition, its students may be subject to special requirements of the school through which they are taking courses.

Other Distance Learning Ventures

The George Washington University has much experience in the field of distance education. For instance, GW is one of 16 partner institutions in the Navy’s PACE program, wherein Navy students can earn GW degrees and certificates through computer video. George Washington and other universities are working with the Organization of American States (OAS) to help the Western Hemisphere's developing countries establish distance-education technologies and curricula. GW is working with countries to figure out what equipment they need and how to use it to distribute distance education. GW is also a founding member of the Global University Alliance (GUA).


Roger Whitaker, formerly GW’s associate vice president for academic development and continuing education, is Dean of the new College of Professional Studies (CPS) and Chief Executive Officer of GW Solutions (GWS). As Dean of the College of Professional Studies, Whitaker will report to the Vice President Lehman and to the Board of Directors of GW Solutions in his role as CEO. Through his dual role, Whitaker will provide the connectivity between the CPS, the GW faculty and GWS, which is the business arm of the new college. This strategy was intended to streamline the both academic and business processes. The 75 employees of GWS were hired directly from the University, but as an internal unit, the 40 staff members of CPS remain University employees. The University’s vice president and treasurer, Lou Katz, will serve as the chair of GWS’s board of directors.


Within the University, GW is making the commitment to Internet technologies as a way to transform existing campus experiences and communities as well as also move the faculty and staff toward embracing the challenges of online education. To prepare, GW has created the Millennium Project, a $126 million project to build the E-Technology Platform and create an Internet-enabled business. The E-Technology Platform provides the foundation upon which new and innovative applications supporting learning, research and service can be deployed. This project is a major strategic push toward an e-campus rather then a traditional let-a-thousand-flowers-bloom approach often employed by academic institutions.

E-Learning at GW has its focus on strengthening rather then replacing traditional education with online learning. In response to the risks of new online competition, GW has expanded the resident undergraduate population and developed a focused approach to deal with the demands for online learning coming from professional and continuing education clients. The phased introduction of technology into the traditional classroom environment is quickly building savvy and Internet ready faculty that will be ready to take on the challenges of online learning.

GW also perceives new market segments opening or expanding, including large focused corporate markets, which also include government agencies, that they have already begun to address. GW sees the possibility of expansion of their professional enhancement and certification program, and is exploring the pre-college advanced placement market among advanced high school students. New technologies also enable GW to find ways to address these markets, including online education and also partnerships and contract learning. Partnerships can include higher education consortiums that are emerging to address the broad demands of the e-marketplace and also various forms of arrangements where GW can partner with corporations to deliver customized training and educational programs.

To launch these types of e-learning ventures, however, the need for capital is not as extensive because GW is building off of their brand and existing market niches. At this time, e-learning initiatives are viewed as programmatic investment-versus an upper-case investment-which means they are non-endowment investments. GW’s initial investment is, according to Gordon Freedman, "in the millions of dollars, but…not tens of millions of dollars." (University Teaching as E-Business? Planning Meeting, 27 March 2001).

GW chose the dual internal model (GWS as a for-profit subsidiary with CPS as an internal degree-granting unit) to keep their options open. Gordon Freedman says, "Later on, if we do not need the for-profit structure because we do not need to raise capital or we do not need that for-profit structure for providing the appropriate incentives to the management of that company, we may just collapse it into a non-profit structure or collapse it back into the institution. So we just chose that model for now to keep our options open." (University Teaching as E-Business? Planning Meeting, 27 March 2001). While GW desires a return on this investment, that is not their primary motivation. To illustrate that point, early in the development stages of their institutional plan for distance education, GW turned down several profit-making opportunities through brand licensing. (Whitaker, 2001) From the GW perspective, partners are strategic partners versus venture capital investors.

GW Solutions (GWS) was established as a for-profit unit for three reasons: 1) to free itself from the University’s bureaucracy, especially in terms of employment, 2) to enable it to purchase or partner with other companies, and 3) to attract outside investment in the event of future scaling. To compete effectively in the marketplace, GW leadership believes, ultimately, that products needs to be scaleable. So GWS is a business-to-business enterprise in the Washington region. This enables GW to develop strategies, both on an enterprise-wide level and on the niche level. In all aspects of GW’s enterprises, the focus is on the flexibility of the operating entities. Roger Whitaker suggests that GW’s "trump card" is their ability to issue valuable credentials and "a facile, nimble, disciplined business that will be responsible for…developing customized responses to the learning needs of organizations." (Whitaker, 2001)

The niche that GW has formed is educational expertise combined with flexible structure and functions, especially with the Prometheus platform. Though Prometheus began as a measure to institutionalize e-learning within GW, its ease and flexibility made it appealing as a product to other educational entities. Also, because Prometheus is essentially an in-house product, licensees receive all the source codes for it, which means there’s a certain amount of academic freedom in terms of what you do with this product. Flexible branding has also been a big draw. Gordon Freedman reports "tremendous receptivity, yet we’re finding sales occurring, state levels, where the competitors are just confounded about why this 30-person operation has just scooped a piece of the market." GW is a niche player up against extremely well-funded companies that made a market presence in the last couple of years. But what’s been interesting is that a lot of GW’s credibility comes from the fact that GW’s ventures are internal units, and not outside entities. The Chronicle of Higher Education reported in June 2000 that George Washington University charged universities $15,000 to license the courseware for a year. (Carr, 9 June 2000) The cost enables Prometheus customers to use the courseware for up to 250 concurrent courses, and includes the cost of service and installation. In comparison, Susan J. Kavanaugh, the director of marketing and communications for, says her company charges colleges $3,000 for an unlimited license for one year, which includes some basic support services.

Prometheus’s close relationship with GW and other partner institutions is a carefully cultivated strategy for the future of Prometheus in higher education. Their goal is to remain closely aligned to partner schools for future product development and possibly for investment. The strategy of working with their academic institution customers as partners, rather than a commercial company selling the institution an off-the-shelf product, has resulted in close, lasting relationships with the academic community that few others enjoy.


In January 2002, George Washington University's Prometheus course management system was purchased by its competitor, Blackboard. Prometheus chose Blackboard over two other interested parties, though their names were not available, because Blackboard historically has maintained multiple operating systems for differing services. The financial terms of the deal were not disclosed. Though Blackboard's long term plan is to incorporate Prometheus into its existing system, short-term support and development of Prometheus as a separate product is in place.



  1.  Prometheus is a product of Intuitive Networks, a subsidiary of The George Washington University, located in Washington, D.C.

Global Education Network (GEN)

NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.

Global Education Network: An Overview


E-learning model: portal, distance education 
Funding model: private, for-profit 
Leadership: Herbert Allen and Mark Taylor 
Employees: 15, as of late 2000 
Location: New York 
Revenue Streams: percentage of tuition and fees from students enrolling in courses offered through institutions, also direct income from non-affiliated students 
Funding Source: unknown initial funding, $20 earmarked from financier Herbert Allen 
Strengths: concept of courses for credit from individual elite liberal arts colleges 
Challenges: buy-in from colleges in order to make business model work

The Global Education Network (GEN) is a private, for-profit company, founded in May 1999 by Herbert Allen, president of the venture-capital firm Allen & Co. and an alumnus of Williams College; and Mark Taylor, Cluett Professor of Humanities and Director of the Center for Technology in the Arts and Humanities at Williams College. Their vision is to provide the highest quality educational experience in the humanities, arts, and sciences, to the greatest number of people through the use of emerging Internet technologies. By fully utilizing innovative teaching and multimedia technologies, and by exploiting the strengths of traditional educational techniques, GEN is creating a new learning environment. GEN operates solely as a web-based company with plans for steady growth that will include adding six new courses through 2002.


From September through December 2001, Global Education Network is conducting a pilot with two courses ("Alexander the Great" and "Understanding Mass Media"), with 200 students across the United States affiliated with several colleges, universities, and alumnae associations. Starting in 2002, these two courses and two others will be available to the general public, targeted at college and community college students as well as lifelong learners. Students can take a GEN course through an academic institution by enrolling through that institution. Students unaffiliated with a group who want to take a GEN course will be able to register directly through the website in early 2002.

Working closely with top-level college professors, GEN courses are created by combining four different kinds of learning modules:

  • Preparation Modules provide students with everything they need to know before taking each class,including: required readings, key points, thought questions, glossary terms, and a printable transcript of all video lectures in each class.
  • Lecture Modules include videotaped lectures illustrated with animations, archival images and footage, and on-screen glossary terms.
  • Interactive Modules allow students to interact with both course materials and other students, as well as constantly assess students' understanding of the subject matter.
  • Test Modules allow students to participate in private online discussions with instructors as well as in class discussions, and allow instructors to assess students' understanding of course materials via these discussions.

The GEN learning modules are as flexible or as fixed as students and instructors want to make them, thus helping all GEN students learn in the ways they are most comfortable. A "Course Map" then helps both students and instructors navigate through these modules and keep track of which have been completed throughout each student's course experience.

GEN courses will vary in length, with most lasting from 10 to 16 classes. Individual classes will average approximately one hour. This does not include taking time out between viewing modules for additional note taking, studying, or reviewing your own work through the use of self-assessment modules, nor does it include reading and other assignments. Time frames will vary depending on each student’s level of enrollment. For instance, students who take a course for credit will need to complete the course work in the time frame set forth for that individual course. GEN advises students to allow at least 110 to 130 hours to devote to course work, or approximately eight hours per week for a 14 or 16 week course, which includes the time to view the classes.

Graded students will be expected to take all classes and complete all assignments and required readings within the allocated time frame set forth by instructors of the individual course. Graded students will also be expected to hand in all tests, including a midterm and final exam, within set time parameters.

Students can, in theory, take GEN course modules in whatever sequence they want. Students can start with the first module of the first class, and work their way through all the modules in sequence as presented; courses are often structured in a certain way for good reasons. Or, GEN instructors may ask students to take certain classes in a certain order - perhaps class one, then class five, then class three, and so on -- or even to take certain sequences of modules within a class in a certain order.

Global Education Network's courses that are offered for credit require the participation of assigned instructors, who are responsible for monitoring students' participation, determining topics for discussion boards, addressing student questions and concerns, grading assignments, and issuing grades. When a college or university uses a GEN course, it provides its own instructor. Eventually, GEN may build its own faculty organization in order to ease the burden on participating institutions of higher education. Instructors can be professors, adjunct professors, or senior teaching fellows. By giving students the opportunity to view lectures on their own time, GEN courses allow instructors to maximize the time they spend interacting with their students.

GEN courses will most likely cost a student between $500 and $700, but students will have the option of auditing for a reduced cost, and scholarships also will be available.


The academic advisory board was formed to oversee and consult on all GEN courses.


John W. Chandler, President Emeritus of Williams College and former professor of philosophy and religion

Professor Chandler attended Wake Forrest College and Duke University. He holds honorary degrees at 16 other prestigious institutions of higher education and is the former President of the Association of American Colleges and Universities.

Reverend Theodore M. Hesburgh, President Emeritus of the University of Notre Dame

Reverend Hesburgh holds 141 honorary degrees and received the Medal of Freedom, the nation's highest civilian honor, from President Johnson in 1964. He has served as Chairman of the Rockefeller Foundation, President of the Board of Overseers of Harvard University and Chairman of the International Federation of Catholic Universities.

James O. Freedman, President Emeritus of Dartmouth College

A graduate of Harvard College and Yale Law School, Professor Freedman served as a law clerk to Thurgood Marshall on the U.S. Court of Appeals for the Second Circuit. He also served as President of the University of Iowa and is author of the book Idealism and Liberal Education.

Frank H.T. Rhodes, President Emeritus of Cornell University

Professor Rhodes teaches geological sciences and is a visiting fellow of both Clare Hall in Cambridge and Trinity College in Oxford. He holds honorary degrees from more than 30 institutions and has served as Chair of the American Council on Education and the American Association of Universities. Professor Rhodes also chaired the 1987 National Commission on Minority Participation in Education.


Herbert Allen, the Wall Street magnate of Allen & Co., has earmarked $20 million to launch and sustain Global Education Network (GEN), designed to be a clearinghouse of courses from America's top colleges. Projections show that colleges that work with the company could earn $250,000 per course. By the fall of 2000, GEN had approached 15 elite liberal-arts colleges about collaborating to sell online courses, and met with mixed responses. Global Education Network officials are trying to be flexible in adapting to the different responses.

"In instances where the schools are not prepared to push ahead institutionally, we have -- with their knowledge in some cases -- worked with individual professors," says Steve Greenberg, the chairman of the company's board of directors. By this fall, he adds, GEN will have worked with more than a dozen professors to transfer courses they are already teaching in person into an online format. The courses will all be advertised as GEN courses, and will not be offered for credit at any of the colleges involved.

William S. Reed, vice president for finance and administration at Wellesley, says the college has reached "an agreement in principle," and will most likely soon become a "charter member" of the company. Five Wellesley professors are working with the Global Education Network staff to videotape courses that should be ready to go online for students in January, says Mr. Reed. He adds that Wellesley administrators were interested in cooperating with the company because the partnership will allow them to work through several logistical issues related to online learning without bearing the financial responsibility. "We are not investing any college money," he says. "But it focuses our attention on a host of complicated issues which we don't have answers to -- like intellectual property, faculty release time, and how to provide services for distance students."

The professors who create the courses will be identified as being from Wellesley, according to Mr. Reed, but the students will not receive credit for the courses from the college and the professors so far have made the courses during the summer on their own time. GEN pays Wellesley, which then pays the professors, says Mr. Reed.

At Brown, officials are "exploring the possibility" of entering into a formal agreement with the Global Education Network, according to Laura Freid, executive vice president for public affairs and university relations. She confirms that five Brown professors are working to produce courses for GEN, but said the courses will not be promoted as being part of the Brown curriculum.

Duke University is also considering an arrangement with GEN. "We have indicated to them that we may be interested in pursuing a relationship with respect to some undergraduate courses," says Peter Lange, the university's provost. "But we have not gone into detail, either with them or amongst ourselves." Mr. Lange adds that Duke might eventually make the company's courses available to its undergraduates during summer vacations and when they are on leave or studying abroad.

Spokesmen for Harvard, Princeton, and Stanford Universities have said that they are unlikely to strike deals with GEN (The Chronicle, January 28).

Some schools, such as Allen's alma mater, Williams College, are concerned with losing control over their "intellectual property," i.e., the lecture material. Others ponder the issue of selectivity: how valuable is an Ivy League course when it's available to millions of people? Herb Allen is aware of the difficulties. For the newcomers to compete with established educational institutions on the web, private capital must bring needed innovation to the educational process. "The question we will continue to ask is: Can we [GEN] make it better than sitting in English 101 at Williams?" And if not, he says: "If we don't get the quality we want, we'll shut it down."


  • Carr, Sarah. "Distance-Education Company Woos Bastions of the Liberal Arts." The Chronicle of Higher Education, 28 January 2000.
  • Carr, Sarah. "Online-Course Company Makes Only a Few Inroads in Working With Elite Colleges." The Chronicle of Higher Education, 18 August 2000.
  • Grimes, Ann. "E-commerce on the Battlefield: A Matter of Degree." The Wall Street Journal, 17 July 2000. 
  • Svetcov, Danielle. "The Virtual Classroom versus the Real One." Best of the Web, 18 September, 2000. 
  • Weber, Thomas E. "Allen is Wooing Elite Colleges to Teach Online." The Wall Street Journal, 28 July 2000.


  • Davis, Alix. "Two Professors Produce Online Classes with GEN." The Williams Record(Williams College), 19 September 2000. 
  • Traub, James. "Online U." The New York Times Magazine, 19 November 2000.

MIT OpenCourseWare (OCW)

NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.


E-learning model: content provider 
Funding model: university non-profit 
Leadership: Booz-Allen & Hamilton 
Employees: 25-30 expected at start 
Main Office: not stated, but likely on-campus in Cambridge 
Revenue Streams: none 
Funding Source: $11 million from the Andrew W. Mellon Foundation and the William and Flora Hewlett Foundations. 
Profitability expected: none expected 
Strengths: access to all MIT course content 
Challenges: no degrees offered

MIT OpenCourseWare (OCW) is the Massachusetts Institute of Technology's bold initiative to make nearly all of its course materials used in the teaching of virtually all of MIT's courses available on the Web, free of charge, to any user anywhere in the world. MIT's initial announcement of MIT OCW was made in April, 2001, and was greeted by an extraordinary outpouring of enthusiasm and excitement from around the world. MIT OCW has received initial support from the Andrew W. Mellon Foundation and the William and Flora Hewlett Foundations. MIT and the foundations that support it, believe that such a venture will continue the tradition at MIT and in American higher education of open dissemination of educational materials, philosophy, and modes of thought, and will help lead to fundamental changes in the way colleges and universities engage the web as a vehicle for education.


The OpenCourseWare project will begin as a large-scale pilot program over the next two years. The first steps include design of the software and services needed to support such a large endeavor, as well as protocols to monitor and assess its utilization by faculty and students at MIT and throughout the world.

MIT OCW is still in the very early stages of organization and course material is not yet available online. MIT plans to make materials available to the public beginning in 2002, with 500 courses available within two years. Over the next decade, the project expects to provide over 2000. MIT officials have not yet determined which course materials will be the first to go online, but they will encompass MIT's entire curriculum, including engineering, science, management, architecture and planning, and the humanities, arts and social sciences. Depending on the particular course or the style in which the course is taught, this could include material such as lecture notes, course outlines, reading lists, and assignments for each course. A sampling of MIT course materials are online now, though these are not in OCW format.

MIT courses themselves will not be offered online. MIT OCW is not a distance learning initiative. Distance learning involves the active exchange of information between faculty and students, with the goal of obtaining some form of a credential. Increasingly, distance learning is also limited to those willing and able to pay for materials or course delivery. Rather, the goal of MIT OCW is to provide the content that supports an MIT education as a resource to people, particularly teachers, worldwide. Additionally, MIT will not award credit or grant degrees through MIT OpenCourseWare; however, faculty at colleges and universities around the world will have access to use these materials to develop new curricula and specific courses, and individual learners can draw upon the MIT OCW materials for self-study or supplementary use.

The MIT OCW website will be coherent in design but flexible enough to accommodate many different types of courses, lectures, seminars, etc. The design and searching capabilities will help users locate materials by discipline and subject area, type of materials, name of individual faculty or author, and type of instruction. No registration will be required to use the MIT OpenCourseWare materials. Once MIT OCW is up and running, it will be available free of charge to everyone. MIT's course materials will be made available only in English, though MIT OCW has expressed a willingness to have others to do translations as long as the original source is acknowledged. No policy has yet been developed.

The materials on the OCW site will be open and freely available worldwide for non-commercial purposes such as research and education, providing an extraordinary resource which others can adapt to their own needs. Some of the anticipated benefits are:

  • Faculty at colleges and universities around the world can use the OCW materials to develop new curricula and specific courses. These materials might be of particular value in developing countries that are trying to expand their higher education systems rapidly.
  • Individual learners could draw upon the materials for self-study or supplementary use.
  • The OCW infrastructure could serve as a model for other institutions that choose to make similar content open and available.
  • Over time, if other universities adopt this model, a vast collection of educational resources would develop and could facilitate widespread exchange of ideas about innovative ways to use those resources in teaching and learning.
  • Within MIT, OCW would serve as a common repository of information and a channel of intellectual activity that would stimulate educational innovation and cross-disciplinary educational ventures.

MIT OCW will radically alter technology-enhanced education at MIT, and will serve as a model for university dissemination of knowledge in the Internet age.


Participation of MIT faculty in MIT OCW will be voluntary, so if a professor has concerns that publication of his or her course materials might hinder the publication of a book based on the course, for instance, the professor could choose not to put the course online. Over the past few months, leaders of the OCW project have interviewed M.I.T. faculty members to make sure professors would be willing to participate. Judging by the number of faculty who already actively utilize the web as part of their teaching, and the interest expressed by faculty, MIT expects that within 10 years, over 2000 MIT courses will be available on the MIT OCW website.

Resources will be available to provide teaching assistants and professional production support for developing and maintaining the MIT OCW website. MIT will commit to the continuous support of the MIT OCW educational environment. One MIT professor on the study group that helped formulate the OCW concept noted that the pioneering new program may set in motion innovations in teaching. Once students begin acquiring course content on the web, faculty will be able to pay more attention to the actual process of teaching.

The policies toward the intellectual property created for MIT OCW will be clear and consistent with other policies for scholarly material used in education. Faculty will retain ownership of most materials prepared for MIT OCW, following the MIT policy on textbook authorship. MIT will retain ownership only when significant use has been made of the Institute's resources. If student course work is placed on the MIT OCW site, then copyright in the work remains with the student.


The Andrew W. Mellon Foundation and the William and Flora Hewlett Foundation have funded the first phase of MIT OCW. The $11 million in grants, $5.5 million from each foundation, will support MIT OCW through the 27-month, $12 million start-up and pilot phase of the project. The institute has also pledged to commit about $1 million of its own money to the effort. Much of the grant money will go toward hiring a staff of about 25 or 30 people devoted to supporting and maintaining the course Web sites. The project is now scheduled to last at least eight years, at a total cost of up to $100 million. The experience gained from the first phase will help determine the costs of the second phase, which is expected to take six years.

The foundations were both drawn to the project because of MIT's interest in providing free access to a high-caliber curriculum. "MIT's pledge to share its entire curriculum, and to place its entire institution behind this ambitious effort, could transform the way in which content is made available to all who want access to it. High school and college students, faculty, and college graduates and professionals worldwide will be able to learn from the offerings of one of the world's great universities," said William G. Bowen, president of the Mellon Foundation.

Paul Brest, president of the Hewlett Foundation, also stated that "Our hope is that this project will inspire similar efforts at other institutions and will reinforce the concept that ideas are best viewed as the common property of all of us, not as proprietary products intended to generate profits."

MIT officials noted that market opportunities do exist for MIT, and will probably have some role at MIT in the future; however, the OpenCourseWare project is not concerned with generating revenue. "OpenCourseWare looks counter-intuitive in a market driven world. It goes against the grain of current material values. But it really is consistent with what I believe is the best about MIT. It is innovative. It expresses our belief in the way education can be advanced -- by constantly widening access to information and by inspiring others to participate," said Charles M. Vest, president of MIT. Other opportunities do exist, though. "There's the possibility of developing courses in the humanities or the arts, for example, for retirees or for people who have wanted to go back to school for a long time. A lot of opportunities are out there to make money. But I want to emphasize that there is no commercially available MIT degree," President Vest declared.

MIT has not ruled out the possibility, however, of licensing its online course materials to for-profit institutions, which might be interested in putting them in products or courses. If a for-profit company wanted to offer a course that primarily used materials from the M.I.T. OpenCourseWare project, for instance, the company would probably be asked to pay a licensing fee, according to Steven R. Lerman, a professor of civil and environmental engineering who is part of the team organizing the project. "But we would not do that if the condition was that we could no longer make [the material] free and open. We're not going to pull it off the site because someone's going to pay us," he said.


The concept of MIT OpenCourseWare was born from deliberations of a study group chartered by MIT's Council on Educational Technology. The Council, a group of educational leaders from throughout MIT, asked the study group to consider ways to use Internet technology to enhance education within MIT as well as MIT's influence on education on a global scale. The group was composed of faculty and staff from MIT, and was assisted by consultants from Booz-Allen & Hamilton, who are helping with organizational aspects of the project.

The program will continue the tradition of MIT's leadership in educational innovation, as exemplified by the engineering science revolution in the 1960s. At that time, MIT engineering faculty radically revised their curricula and produced new textbooks that brought the tools of modern science, mathematics, and computing into the core of the engineering curriculum. As their students joined the engineering faculties of universities throughout the country, they took with them their own course notes from MIT, and spread the new approach to engineering education.

In similar spirit, but with new technologies, MIT OpenCourseWare will make it possible to quickly disseminate new knowledge and educational content in a wide range of fields. President Vest commented that the idea of OpenCourseWare is particularly appropriate for a research university such as MIT, where ideas and information move quickly from the laboratory into the educational program, even before they are published in textbooks.

MIT is also undertaking a number of ambitious projects to enhance and potentially transform the educational experience through the use of new technologies. These projects are stimulated and supported by MIT's Council on Educational Technology and by Project I-Campus, a collaboration between MIT and Microsoft Research.

  • TEAL: The TEAL Project will establish a technology enabled active learning environment for large enrollment physics courses, which will serve as a national model for such instruction. Building on the experience of other universities, TEAL will merge lectures, recitations, and hands-on laboratory experience into a technologically and collaboratively rich experience. Software and teaching materials developed in this effort will be made available nationally at little or no cost, in the hopes of motivating a national effort along these lines.
  • WebLab: MIT students can now test and probe fragile, microscopic electronic structures via a novel online lab that can be accessed from dorm rooms and other locations 24 hours a day. Although the lab's focus is the study of microelectronic devices, WebLab has the potential to revolutionize science and engineering education by providing online access to state-of-the-art labs.
  • ArchNet: The ArchNet project is based on the idea that educational technology should be employed to create and enhance learning communities. All community members will have individual workspaces in ArchNet which provide them with personalized entry points to the system, and which also allow them to represent themselves and their work to other members of the community. Learning community environments of this sort will be very widely used in professional education in the coming years.

MIT is also engaged in several collaborative and distance learning projects around the world. In the future the technologies that are being developed to support these efforts will also be utilized to enhance OCW materials. Some of these projects include:

  • MIT's Design Studio of the Future (DSOF): The DSOF is an interdisciplinary effort between the School of Architecture and Planning and the School of Engineering that focuses on geographically distributed electronic design and work group collaboration. As a design project moves along, aspects of the work can be shared, discussed, changed, and implemented through electronic means.
  • MIT-Singapore Alliance: In November 1998, MIT joined in an alliance with the two leading research universities in Singapore -- the National University of Singapore and Nanyang Technological University -- to explore the application of information technology in the creation of a new global model for long-distance engineering education and collaborative research.
  • MIT's System Design and Management Program (SDM): MIT's first degree granting program offered through distance education, SDM provides students with expertise in both management sciences and engineering, specifically in the areas of system design and new product development.
  • Cambridge-MIT Institute: This is a new enterprise between MIT and Cambridge University in England that will develop educational and research programs designed to stimulate the development of new technologies, to encourage entrepreneurship, and to improve productivity and competitiveness. A key component will be an undergraduate student exchange program.

MIT President Vest said, "We see MIT OpenCourseWare as opening a new door to the powerful, democratizing and transforming power of education." MIT OCW will serve as a model for university dissemination of knowledge in the Internet age, and will continue the tradition at MIT and in American higher education of open dissemination of educational materials, philosophy and modes of thought. MIT OCW is fundamentally an information dissemination initiative. "Simply put, OpenCourseWare is a natural marriage of American higher education and the capabilities of the World Wide Web," he said.

MIT believes that implementation of OpenCourseWare will complement and stimulate innovation in ways that may not even be envisioned at this point. "This is about something bigger than MIT. I hope other universities will see us as educational leaders in this arena, and we very much hope that OpenCourseWare will draw other universities to do the same. We would be delighted if -- over time -- we have a world wide web of knowledge that raises the quality of learning -- and ultimately, the quality of life -- around the globe," asserted MIT President Vest.


OCW began its pilot phase in December 2001 to find out what professors want from course web pages and to create a system for support and maintenance of the pages. Early efforts have proven that faculty skill levels vary substantially. MIT is hiring support staff and developing templates and search tools that will make the on-line course materials easier for all users. The pilot phase is schedule to end in March 2002.



NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.


E-learning model: portal, infrastructure provider 
Funding model: private, for-profit 
Leadership: Terry Hilsberg, Chief Executive Officer 
Employees: TBA 
Location: Australia, China, Hong Kong, Malaysia 
Revenue Streams: tuition and fees from students enrolling in partner institution courses 
Funding Source: unknown initial funding, $25.9 million in second-round funding 
Profitability expected: when enrollment reaches the tens of thousands 
Strengths: accredited courses from brand name institutions, Asian target market, infrastructure 
Challenges: stigma of distance learning centers

NextEd Limited is a Hong Kong-based systems integrator engaged in providing infrastructure to post-secondary education and training providers, primarily in Asia. NextEd specializes in assembling libraries of courses from mainly Western education partners, which are delivered through multiple sites in Asia by local partners, using the NextEd digital infrastructure. NextEd works with private and public education institutions, corporations, professional associations, and training organizations located in Hong Kong, China, Malaysia, Australia, Canada, Europe, New Zealand, the UK, and USA.


End-user Products/Services

A range of degrees are offered via the NextEd platform - primarily postgraduate, but also including undergraduate and English language courses . Courses range from business, IT, and accounting to psychology, nursing, and humanities. NextEd packages courses and content from the universities and markets them across Asia.

Target clients are adults over age 22, 90% of whom are seeking a postgraduate qualification or some form of post-graduate certification (the other 10% are in undergraduate courses for adults). In Asia these are usually in such practical subjects as business administration, engineering, and IT.

Its Asian emphasis is one of two things that differentiates NextEd from its rivals. The other is the network of powerful servers that NextEd has installed in eight locations (Beijing, Hong Kong, Kuala Lumpur, Singapore, Sydney, the United Arab Emirates, London, and San Jose, California).

A course on the NextEd platform costs from from $50 to $2000. Its major shareholders in include GE Capital, Fidelity Ventures, and Whitney & Co.

Formerly known as eEducation, NextEd delivers courses through an extensive network of distance learning centers, mainly in China. Sometimes referred to as the McDonald's of foreign distance learning providers because of their franchise-like business models, distance learning centers are ideal for students in remote regions that lack communications infrastructure. These centers, which are managed by large and small companies and higher education institutions located throughout Asia, are in effect locally owned computer labs-with Internet and videoconferencing capabilities, and other smart classroom features-that typically hold anywhere from 20 to 120 computer workstations connected to a satellite link.

Corporate Products/Services

NextEd operates a fully integrated, scaleable and replicable software platform comprising course teaching and learning software, "online campus functionality", electronic communications, student activity tracking, e-commerce applications (such as an online book store), call centre/IVR technology for local student service and support and software for online marketing including database mining.

The underlying technology platform is the NextEd Global Knowledge Extranet, which is a set of advanced learner relationship management, courseware delivery, publishing, and student administration applications. These are resident upon an integrated network of servers located on the Internet and at the multiple sites of course providers and education and training delivery centers.

Global Knowledge Extranet (GKE) 
The NextEd GKE is a transparent system that links people, content and experiences across multiple locations and time zones. This unique extranet is comprised of four core technologies that reside in the foundational layer, NextEd Delivery System. Resting on this foundation layer is the NextEd Learning System, comprised of enabling applications that adhere to the principle of using multiple, fully-integrated applications to cater to a range of learning styles, technologies and business models. Its adaptive and modular design ethos seeks to satisfy the business requirements of education providers to match their current business models or build new, effective, successful, and profitable education systems.

NextEd Delivery System (NDS) 
The four core technologies of the Global Knowledge Extranet are: a global server network with primary server nodes in Sydney, San Jose, Singapore, Manila, Hong Kong, Beijing, and London; a content object repository (COR), a multipoint, multilingual student information system (SIS) that integrates and manages all the learning and administration functions of users who may be students, academics, employees, or members of professional organizations, providing a ‘one student-one record’ convenience independent of location and organization; and a Customer Relationship Management (CRM) System.

NextEd Learning System (NLS) 
NextEd is ‘platform agnostic’ when it comes to learning management systems (LMS). An interactive learning environment is merely one component in a large suite of online learning and knowledge management applications. The strengths and limitations of any single LMS define the scope and depth of available learning opportunities offered by an organisation. This limitation can be overcome using the NextEd Learning System with its combination of selectable applications and tailored services that ensure the ongoing relevance of our solutions.

Continuous Publishing System (CPS) allows authors to write, edit, approve, and deliver documents from their computers via the Internet to a common database. The final copy is sent to an integrated publishing system that can generate both hardcopy and electronic materials for inclusion in an online Learning Management System.

Learning Management Systems are browser-based systems that integrate with a customized Student Information System. An LMS presents trainers, lecturers and students with advanced instructional, learning and community building tools. The NextEd Learning System accommodates different Learning Management Systems, including the NextEd customized-Blackboard LMS and NextEd's double-byte enabled LMS.

The core technologies of the NextEd Delivery System ( and the enabling applications of the NextEd Learning System ( are combined to provide unique solutions to meet the needs of organizations interested in delivering online education locally, nationally or globally. Target markets include:

  • Large multi-site corporations or government departments looking to educate and train their staff on multiple sites synchronously or asynchronously;
  • Commercial multi-site training and education providers looking to expand rapidly in multiple locations using the technology as a way of guaranteeing consistent quality and access;
  • Traditional education institutions looking to create electronic relationships with their course suppliers and distributors, in order to expand geographically and secure a position in the customer value chain.

The customized solutions from NextEd meet the varied business needs of our partners who may wish to:

  • Expand rapidly across multiple locations, largely via some form of learning center;
  • Aggregate geographically dispersed students in specialized markets;
  • Provide standard levels of quality and service;
  • Rapidly implement new programs sourced from across the world to meet the evolving demands of students and employers;
  • Eliminate manual business processes that add no consumer value.

The services provided by NextEd complement the solutions offered by the NextEd Global Knowledge Extranet to help clients reach their strategic objectives. NextEd offers web design, including portal pages and fit-for-purpose instructional design in courseware development; 24x7 technical support throughout the Pan Asian region, including technical and academic support, student inquiries, admissions, application processing, and enrollment payment processing; and training for academic, marketing, admission, and technical personnel through face-to-face, teleconference, and virtual sessions. All customer services are integrated through the Customer Relationship Management system (CRM), which provides a single record of all interactions available to authorized stakeholders as required.

All NextEd designed sites conform to World Wide Web consortium guidelines on accessibility. The advanced features of the web publishing solution offered by NextEd allow any item of content, such as a document, to be automatically delivered in multiple formats.


Terry Hilsberg, CEO, and Carl Loo, Chairman, founded NextEd in 1998 to achieve two objectives. Firstly, to provide a means to allow students in multiple locations throughout Asia, to access post-secondary education and training, often from course providers located in another city or country. Secondly, to ensure that the student undertaking such education or training utilizes a modern digital education delivery system that has high levels of performance and reliability. To achieve these objectives, NextEd partners with a wide range of courseware providers, education and training delivery organizations, and end user customers to assemble education and training experiences. NextEd’s partners include tertiary education providers, commercial training companies and established technology companies as listed in Table 1.


Education Partners

Austrade, Australia

Australian Catholic University

Australian Centre for Languages

Australian College of Applied Psychology

Australian College of Rural and Remote Medicine

Global University Alliance including: 
   Athabasca University (CA) 
   Auckland University of Technology (NZ) 
   George Washington University (USA) 
   Hogeschool Brabant International Business School (Netherlands) 
   Royal Melbourne Institute of Technology (RMIT) (Australia) 
   University of South Australia (Australia) 
   University of Glamorgan (UK) 
   University of Derby (UK) 
   University of Wisconsin, Milwaukee (USA

La Trobe University

The Open Polytechnic of New Zealand

The Pan Pacific Training Company


University of Southern Queensland

Technology Partners


Impart Corporation

Instructional Management Systems

MyInternet Pty. Limited

Associate Partners


China-Australia Chamber of Commerce, China

Hong Kong Institute of Education

Wall Street Institute

Distribution Associates

Distance Learning Center Thailand

Kolej Bandar Utama, Malaysia

Lotus College, Vietnam

Masterskill Malaysia

MSC Group of Colleges, Malaysia

Pre-Masters College, Thailand

RMIT Vietnam, Vietnam

Sedaya College, Malaysia

Schiller - Stanford, Thailand

Systems Technology Institute, Philippines

Stamford College, Malaysia

NextEd is also a member of the IMS Developer's Network. The IMS developer's network implements standard guidelines in teaching and learning software so that teachers, learners, software developers, content providers, and other parties involved in the learning process work towards creating a universally accepted system. The IMS project has the support of more 3,300 colleges and universities worldwide, as well as the support of the US Department of Defense's training division.


NextEd Management

Terry Hilsberg, Chief Executive Officer

Alan Bowen-James - Chief Operating Officer

Liz Gurrie - VP Aus/NZ, European & N. American Accounts

Sheryl Lewin - Vice President Account Services

Carl Loo - Executive Chairman

Paul McKey - Chief Technology Officer

James Thompson - Chief Financial Officer

Rex Waite - Vice President Development


NextEd Directors

Daniel Auerbach, Managing Director, Fidelity Ventures Far East and Fidelity Capital Far East

Terry Hilsberg, CEO, NextEd

Carl Loo, Executive Chairman, NextEd

Malcolm McKay, Deputy Vice Chancellor, University of Southern Queensland

Michael Roux, Chairman, Roux International Advisors

Susan Harman, founding partner, Core Learning Group; Partner, Managing Director, and Head, Robertson, Stephens & Co.; Managing Director, Paine Webber.

Beth Jacobs, Senior Financial Advisor, NextEd

Laurie Khan, CEO of i100

Barbara Kurshan


Much of NextEd’s core business comes about through agreements with well-recognized institutions that offer sophisticated online learning to students and business professionals throughout Asia via NextEd’s multiple-server network. In all of these partnerships NextEd provides infrastructure services such as customer relationship management (CRM), learning management systems (LMS), and electronic publishing services. NextEd also offers marketing services, such as student recruitment and customer support programs. In all cases the resultant products are marketed in the name of NextEd’s clients, not that of NextEd.

NextEd has contracts with universities to offer more than 200 degrees (or awards) and 1,400 courses. The first 70 courses went live in July 1999, a mere eight months after NextEd was founded. It was able to move rapidly because it didn't have the huge, old computer systems that encumber most universities. As an example, the total replacement cost of hardware and software alone is $10 million.

As a private company, NextEd does not report its results-except to say that it is not yet profitable. Though initial funding is not disclosed, NextEd has received $25.9 million second-round financing from GE Equity, and Whitney & Co. Private investors are listed in Table 3.



Date of first investment

Avila Limited


Dynamic Thinking


Endeavour Pacific


Fidelity Ventures


GE Equity


Indelta Pty. Ltd.




Roux International Pty. Ltd.


Whitney and Co


NextEd operates on both a fee-for-service basis and as a risk-sharing partner in the resultant businesses. NextEd makes its money by charging the university 30% to 40% of student tuition fees for a range of services that include converting courses to online mode and providing various online education software packages. NextEd will even supply tutors, if they are needed. NextEd charges anything from $50 to $2000 for one of its courses, although the student body must reach a critical mass of tens of thousands before profitability will be achieved. Within eight months of its formation in September 1998, NextEd had signed up 350 students and three Australian universities to provide courses. As of November 2000, the company was serving 2,600 students in more than 50 countries as far afield as Iceland and South Africa, in courses associated with seven educational institutions. The company anticipated 10,000 students by 2001, though no public reports of current enrollment are available.

NextEd's fortunes were greatly boosted by the June 2000 launch of the Global University Alliance, a grouping of ten schools from the U.S., Britain, Canada, Australia, New Zealand, and Holland whose aim is to provide high-quality education to the Asian market. The alliance, based in Hong Kong, is powered by NextEd. Such schools make ideal providers for NextEd for two reasons. One is that they concentrate on teaching, not research; the other is that they have all made significant investments in digitizing their educational infrastructure.

Stanford University’s online high school program (Stanford University's Program for Gifted Youth) joined forces with NextEd last year to offer courses to Australian and Asian students. NextEd provides the network infrastructure necessary to offer the program's courses in foreign countries. NextEd officials in Australia and Asia will work directly with schools and colleges in those countries, called "host institutions," to provide technical support and tutorial services for students there taking the Stanford courses. International students taking the courses will -- in many cases -- be able to receive credit from high schools or colleges in their home countries.

NextEd will share revenues with the Stanford program, and also with the host institutions in Asia and Australia. While the company is now, in some cases, playing a marketing function, eventually it will devote more time to converting course content onto foreign servers and providing student-support services to international students taking American courses, including round-the-clock technical support.

In the future, NextEd will be concentrating on what it does well, namely the provision of multiple-site infrastructure for rapid rollouts of Pan Asian learning center companies.



NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.


E-learning model: university-based corporate training/consulting 
Funding model: for-profit subsidiary of NYU 
Leadership: Gordon Macomber, CEO 
Employees: ~50 
Main Office: SoHo (NY) 
Revenue Streams: course fees 
Funding Source: NYU initial investment of $21.5 million 
Profitability expected: by end of 2002 
Strengths: brand name, local market 
Challenges: faculty buy-in, economic/financial strategy

Founded in 1998, NYUonline is the first for-profit e-learning subsidiary of a major American university. NYUonline is located in New York City's SoHo district, neighboring New York University (NYU) and the heart of NYC's Silicon Alley. NYUonline provides customized learning resources for corporations looking to bolster professional growth by providing continued education and training for their employees. As a for-profit subsidiary of New York University, NYUonline functions as a single point of contact to provide complete e-Learning solutions to the business, professional, and educational world.


NYUonline contracts with corporations to develop online courses for in-house training and has licensed some of its curriculum to companies that want to deliver it themselves. Education products include both for-credit degree programs and non-credit certificates programs marketed to "corporate universities" and other corporate training programs, to individuals interested in continuing professional education, and to educational institutions that do not have the capacity to offer online education. NYUonline works with the corporate education needs of Fortune 1000 companies. Their current clients include Fortune 100 financial services firms and Fortune e-50 companies, including companies like American Express and Morgan Stanley Dean Witter. Corporations pay either a flat fee based on the length of the course or the number of students taking it, or, in some cases, purchase a license.

NYUonline provides corporate services such as e-Learning strategic consulting, customized content solutions, instructional and knowledge design, assessment analysis and design, foreign-language translation, instructor training, NYU faculty integration, e-Learning support, web-based authoring system, technology integration and hosting, and 24-7 technical support.

NYUonline works closely with corporate clients to understand their goals and assess their needs. Drawing upon NYU's exceptional courses, the expertise of NYU's faculty, and the company's own instructor-led training and material, NYUonline then creates a tailor-made, web-based program of study for employees. Content can reflect company-specific material only, or a combination of the company's material and NYUonline's. Specifically, NYUonline can: 1) develop an online program with input from the company’s experts, depending on the subject; 2) train a company’s in-house trainers to teach online in synchronous sessions; and/or 3) provide the e-Learning authoring system, iAuthor, which the company’s subject matter experts can use to create online content.

NYUonline delivers many certificates and courses from NYU's School of Continuing and Professional Studies (SCPS), including information technology, e-business, and e-commerce courses, as well as programs in marketing, foreign languages, public relations, healthcare, finance, law, and real estate. NYUonline also developed and marketed SCPS's new Masters of Science Degree in Management and Systems, and offers an online-teacher-training course for professors who want to learn how to instruct in the medium.

In addition to its corporate training programs, NYUonline develops online courseware for NYU's traditional degree-granting programs, which can then be used as a distance-learning complement to its usual classroom courses. For instance, it is putting together an online class on portfolio management for NYU's Stern School of Business, and intends to provide similar services for the university's continuing-studies, nursing, and dentistry programs.

In its first year of operation, NYUonline provided about 55 courses to approximately 500 students. The biggest collection of NYUonline courses is in information and Internet technology. It also offers courses in finance, as well as e-banking, e-law, and media. Courses cover topics from global marketing and management to e-commerce and finance.

NYUonline courses can be either synchronous or fully asynchronous (anytime, anywhere), or a combination of both, with an assortment of complimentary media assets. Tools that can be incorporated into the e-learning offering include chat rooms, bulletin boards, e-mail, and voice-over-IP. Rather than solely using components that other online courses use, such as compact discs, books, or instructor-mediated sessions, NYUonline utilizes those tools as complements to the foundation of an environment delivered entirely via the Web. NYUonline has an array of offerings for both live, instructor-led delivery and for anytime, self-paced delivery. For the live portions, NYUonline either has NYU faculty members deliver the coursework/lecture, or they can train a company's in-house instructors to teach online. Students can begin a course of study any month of the year.

As a subsidiary of New York University, all NYUonline content must meet the rigorous standards of NYU's faculty and curriculum, but NYUonline is not accredited. All the university content NYUonline delivers comes from NYU, an institution accredited by the Commission on Higher Education of the Middle States Association of Colleges and Schools.

NYUonline works with various NYU schools, departments, institutes and faculty members to develop content for the online courses, but NYUonline does not grant degrees. NYUonline coursework may be recognized for credit if a student is admitted to and matriculates into one of NYU's schools. This is dependent upon the student's success in the coursework and the rules of the accepting college that has academic responsibility for the program. Though no formal pathways for earning credit exist, NYUonline works closely with the School of Professional and Continuing Studies[1] to create a pathway for learners to complete coursework through the school for certificate/degree-earning purposes.

Through their Faculty Services Program, NYUonline also works directly with New York University to equip professors to meet the needs of the educational world by using web-based technology as a learning tool to enhance performance, comprehension, and exposure, emphasizing effective teaching and learning through technology. The Faculty Service Program is designed to be a total immersion learning experience. All sessions, both live and self-study, occur online in a Web-based environment. Participating faculty can work from their home or office, and the lessons are designed to emphasize teaching over technology, focusing on the development of techniques that foster interpersonal interactivity. The program is voluntary and relies on a magnet program approach to attract faculty interested in exploring the possibilities of e-learning. Its basic curriculum provides for about nine hours of training meant to give participants a foundation in basic online techniques and a level of comfort sufficient to let them express their own teaching style. Teachers learn how to adapt their best techniques to the new environment and develop new methods that take advantage of the wide range of educational assets available in the e-learning medium. Through this program, NYUonline encourages instructors to develop and improve techniques, such as teaching hard skills and soft skills, using assessment, providing learning support, and mentoring. NYUonline’s "Train the Trainer" program, targeted to the corporate market, is modeled after this program.

NYUonline develops the front-end program based on how they see the landscape for corporate demand. Usually NYUonline brings in a team consisting of an instructional designer, a project manager, graphic artists, and writers, who work with the faculty member over an intensive beginning stage. Then they create the content. Faculty members spend approximately 8 to 10 hours over an 8-month period of time in this process. Currently all courses are developed by NYU faculty, with a representation of both full and entering faculty. NYUonline worked with the university to structure it so that the NYUonline company contracts with the faculty for most of the work, in terms of creating the syllabus and creating the course. At that point, the process works on a school-by-school basis. For instance, at the Stern Business School, a significant portion of the royalties paid Stern go to the faculty member whose content is being sold. So faculty are compensated, at least for creating the course, and then they’re compensated on a worldly basis with the sale of the course. Instructors at NYUonline typically make slightly more than instructors teaching the same courses in a traditional classroom, but specific salary figures were not provided.

Part of NYUonline's learning philosophy revolves around delivering education in the form of "learning objects." A learning object is a piece of instruction that can stand on its own and teach one thing. It can contain various multi-media features, including audio, video, text, flash animation, and simulations, as well as complete pre- and post-assessment. A typical learning object might consist of 15 to 30 minutes of online learning, which makes it easily digestible. Related learning objects may be strung together in what is called a "curriculum object," which is similar to a course. The modular design also functions well for the university, which wants full-length courses. The university can market these curriculum objects through its distance learning program. NYUonline’s technology also separates the content from the branding.

NYUonline is just starting the process of evaluating pedagogical success. They use a combination of surveys and interviews with students to gain feedback.

Technology innovations include iAuthor, NYUonline's knowledge management system, and SCORM interfaces (Sharable Content Object Reference Model, an object oriented technical standard for Internet instruction). NYUonline also uses software from InterWise Inc to offer live online lectures and the Prometheus platform (see Partnerships below).

NYUonline created its authoring system, iAuthor, in April 2001. iAuthor is entirely Internet driven, so developers from any part of a corporation in any country can work together independently, or with NYUonline, to develop courses. NYUonline initially created iAuthor for its own use and to produce content the way companies and institutions want it--quickly, easily, and in short segments that can be readily updated. iAuthor's leading principles are collaborative development, content in learning object format, and ease of use. More than a simple authoring tool, iAuthor is an advanced content management system. It is a collaborative publishing system that enables a team of people to work over the Internet to build online courses, learning objects or any form of document. It stores objects in a database, and then compiles them as an HTML document or a document that conforms to SCORM standards developed by the US Department of Defense or to AICC (Aviation Industry CBT Committee) standards. The first release of the product focused on web publications, but Dan Daniel, CIO, expects to expand to other media such as PDAs, ebooks, and paper with future releases. iAuthor is focused on allowing people to author sophisticated, multimedia web pages based on learning objects. The system requires authors to define objects using metadata, including rights and royalties. With that information, managing payments is a relatively simple task.


Currently NYU Online works with a variety of partners (see Table 1). Content provider partners supply branded content to NYUonline, which is then incorporated into their e-Learning programs. Once developed, the courses are fully hosted and delivered by NYUonline over the web. Content provider partners benefit by enhancing their visibility in the market, reaching new customers, and realizing significant revenue streams. Channel partners collaborate with NYUonline by bringing their specific areas of expertise and offerings, which complement and extend our e-Learning solutions. Resellers take courseware developed by NYUonline and sell it to increase revenue stream.




This partnership is designed to bring together the respective expertise and capabilities of NYUonline's iAuthor, their collaborative web-based authoring tool, and Docent's award-winning knowledge management software to allow organizations to benefit from world-class course content creation and delivery within a robust, highly scalable enterprise e-learning solution. Key factors in the development of this integrated e-learning solution were NYUonline's iAuthor easy-to-use, web-based collaborative features; its conformance to open standards, such as SCORM and the XML programming language; and Docent Enterprise's powerful features and its support of the above standards.


To continually provide complete e-learning from start to finish, NYUonline's iAuthor integrates with Generation21's Total Knowledge Management System in an effort to provide clients with an end-to-end solution that will allow them to rapidly develop content, and to deliver, manage, and maintain knowledge. iAuthor produces content the way companies and institutions want it--quickly, easily, and in short segments that can be readily updated and reused. iAuthor's leading principles are collaborative development, content in learning object format, and ease of use. TKM is the only fully integrated software solution that employs Dynamic Learning Objects and allows for development, multiple delivery methods, maintenance, and administration of all forms of training and knowledge management throughout an organization. By building training from re-usable Dynamic Learning Objects, the system keeps training content consistent across all training modes: Internet-based, CD-ROM, and instructor-led.


Driven by the goal to provide businesses and students with access to revolutionary and flexible technology, NYUonline added Prometheus, the courseware system created by George Washington University, to its online education offerings to create a more extensive virtual classroom environment. Prometheus is Web-based software that allows employees, students, and teachers a greater degree of interactivity and more collaborative learning opportunities. NYUonline can integrate Prometheus software into all of its customized training courses for corporations. In addition, NYUonline uses the Prometheus platform to enable various schools at New York University to proceed with their own distance learning initiatives using cutting edge technologies. Prometheus is currently being used at other top universities, such as Wharton, Columbia Teachers College, Columbia Business School, Vanderbilt University, University of Michigan College of Engineering, University of Texas at Austin College of Engineering, and The George Washington University.


NYUonline has teamed up with InterWise, Inc. to add live, instructor-led lectures to NYUonline's Web-based courses. The InterWise software allows NYUonline students and professors to have a rich, interactive experience that creates a more vibrant virtual classroom experience to aid in the learning process. And Interwise allows NYU faculty to teach live in an online setting, and it offers NYUonline's business clients with a superior platform live collaboration over the Internet.

NYUonline joined forces in January 2000 with to finalize its inaugural certificate program in management. Through this alliance, NYUonline offered its first groundbreaking courses in management and finance, incorporating state-of-the-art technology with up-to-date content and the accumulated knowledge and educational tradition of New York University in a never-before-seen interactive format.

McGraw-Hill Lifetime Learning

NYUonline and McGraw-Hill Lifetime Learning (MHLL) formed a strategic partnership whereby MHLL provides a channel of distribution for NYUonline management courses to the corporate marketplace. In addition, NYUonline utilizes the custom publishing capabilities of McGraw-Hill Higher Education (MHHE) to provide print-based materials for its online students.

While outside partners provide useful technology or resources to enhance NYUonline products and services, in-house partnerships are two-fold. First there are enabling partnerships with NYU schools through integration and creation of e-learning technology (e.g., development of the collaborative web-based authoring tool, iAuthor, or integration of Prometheus into the university) as well as due diligence (ensuring that technology is suitable for university needs/capacity). There is the hope that someday NYUonline will accrue some benefit as a result of this sharing, though no NYUonline resources are dedicated to this activity. Secondly, there are revenue-getting partnerships with NYU schools. When NYUonline enters into strategic relationships with corporations and participant NYU schools create value-added to products/services, they share revenue with participant NYU schools.


President and CEO Gordon Macomber joined NYUonline in December 1999, roughly a year after the University's Board of Trustees and senior administration established the for-profit subsidiary. Macomber spent his first twelve months overseeing the development of NYUonline's courses. The company currently has a staff of fifty employees.

Decision-making resides with the Senior Management Team (see Table 2). The CEO reports to a governing board, which is made up of two types of members: university-employed and NYU trustees.


Gordon Macomber

President & CEO

Lauren Beiley

Vice President of Marketing & Communications

Dan Daniel

Chief Information Officer

Michael Eisenstein

Senior Vice President of Strategic Marketing

Augusto Failde

Senior Vice President of Global Business Development and Sales

David Hawthorne

Senior Vice President of e-Learning Environments

Lloyd Short

Senior Vice President of e-Learning

Jeff Tagliabue

Director of Finance & Administration


NYUonline came out of the School of Continuing Professional Studies (SCPS), the extension division of NYU. At the time NYUonline was being developed in 1998, there were two main approaches to e-learning: online education and online corporate training. NYU was interested in addressing the economic issues, the lifelong learner, and how to get into that marketplace. Internally, the academic culture suggested that those goals would not be met if NYUonline were placed within one of the schools at NYU, or if it were placed as an appendage within the NYU structure, because NYU’s prevailing thought was that individual schools were not prepared to coordinate fast enough in order to provide a sustainable business model. Therefore, NYUonline was formed as an external entity that was internally financed with a $21.5-million investment from the university. When NYU formed the company, university leaders said they might seek outside investors and eventually take the company public on Wall Street. Though the university provided initial funding, the idea of going public--or selling out to another private buyer--is still part of the long-term plan.

One reason NYU opted to create its own company rather than deal with outsiders is that the university is more comfortable controlling the venture itself. The major driving force was to use the construct of continuing education, but to step outside the constraints of the university. In this way, NYUonline was better able to capitalize on both the financial and the intellectual capacity of the institution in order to get into the extended learning market much more substantially. There was a $60 million market in the New York metropolitan area alone. The idea was that if NYUonline could capture the market in New York, the global possibilities were intriguing.

When the company was launched, its mission was to create full-length on-line courses for a consumer audience. It quickly became apparent that such efforts were too costly, and customers too few. Executives did stray from the initial strategy of catering to a corporate market, but they also learned that because of the fast pace of the corporate marketplace, the traditional semester is not appealing to corporate clients. NYUonline shifted its focus toward addressing corporate needs through the development of shorter learning objects, which, in turn, promised lower costs for curriculum development. The university’s Stern School of Business and its SPCS are likely the biggest beneficiaries, since most of the material developed by NYUonline to date relates to business and financial management.

In addition to sharing course material, NYUonline splits the proceeds of its corporate initiative with the university's component schools, as well as with individual professors. Such arrangements have greatly helped faculty members see the upside of e-learning. While they were initially concerned about issues such as intellectual property ownership, many now express a willingness to work with the e-learning arm.

In this model, the university and its faculty benefit, as well as the business enterprise. Whereas faculty have resisted developing distance-education curricula in some cases, many NYU business faculty have embraced this partnership. NYUonline works closely with faculty who collaborate on subject matter with instructional technologists to determine the most effective online ways to deliver the subject matter. The faculty get paid as consultants. NYU gets the rights to the intellectual property. Partners provide the courseware, media production and technological expertise; NYU provides the prestigious educational brand and the subject-matter experts. That translates into increased revenue, which enables the school to hire more faculty. Gordon Macomber claims that relationships with faculty are critical to producing a quality product. "Within a normal university structure, development of this kind is cost-prohibitive. The content development is often an add-on to faculty responsibilities, so it becomes a low priority. By using a business model, the university exploits the strengths and resources of a company to develop the full product, which in turn gives the university the opportunity to expand."

There may have been less controversy at NYU than other universities because fewer people and universities were talking about for-profit distance learning when NYUonline was first discussed in 1998. That doesn’t mean that it was always smooth sailing. In fact, the greatest challenge early on in getting the program operational for NYUonline was dealing with faculty. When Gordon Macomber was brought on board, responses from professors and individual school deans ranged from utter indifference to open hostility towards the new e-learning venture. According to Gordon Macomber, "At NYUonline, we are basically business people and education technologists, with an emphasis on technology. So we have tried to integrate faculty, and only now can I report that we’re having some modicum of success. It has taken a full 15 months of heavy lifting to begin to integrate properly with the faculty" (Teaching as E-Business, 27 March 2001). Officials of NYUonline are always aware that they must move more slowly than other corporations have to. "Just because you have a for-profit status, it doesn't mean you can operate like any other dot-com," says Gordon Macomber. "If you get too far out in front of your own troops, you can get killed by friendly fire."

After surveying the landscape of the online learning market, NYUonline shifted its strategy to deliver small pieces of content to users. NYUonline tested curricula with four Fortune 100 corporations and about 150 students. They kept the pilot phase small so they could focus on delivering the high quality content. NYUonline's first program, the Certificate in Management Techniques, was introduced in February 2000. By early 2001, NYUonline was ahead of their business plan, according to Gordon Macomber. A major initiative for NYUonline in 2001 will be forging partnerships with blue chip firms. NYUonline has expanded to 50 employees from half a dozen. Nonetheless, the school faces brutal competition in the e-learning sector. Players range from big-league institutions such as Columbia, Stanford, and Duke to corporate training specialists such as SkillSoft Corp. and SmartForce. Even though the marketplace is crowded, some analysts insist that NYUonline looks like a solid bet because its name recognition gives it an advantage in marketing to the corporate community. The company expects to be able to cover 40 percent of its operating costs by the end of this calendar year and 100 percent of the costs by the end of 2002.

Traditional drivers for education, especially within the tier one or research university climate are, in Gordon Macomber’s opinion, economic, cultural, and educational, the latter two being integrally linked. The perspective of the research university has been geared towards education and towards a culture through which to provide that education. However, in the e-learning marketplace that is currently emerging, the perspective is entirely different; the catalyst is economic now, rather than academic. The traditional academic mindset and the academic culture has not had the impetus from the outside coming in as aggressively as it is today. The numbers that are driving the economic piece of this puzzle are huge, even though the scale of the industry is quite small and it is also fragmented. But the economic issue is a big one, because it tends to be the driver, at least at NYU. NYUonline has received certain amounts of capital to build a business plan, which is in one sense purely an economically-driven model, and they have to provide a return on that investment. As a result, they have set out to define the corporate education training market, and they’re engaging in that market to try to get the proper return on their investment. One strategy is to re-use and to leverage the investment in the content so that it can be used in multiple markets. The multiple buyers or licensers of that content would be licensing it to use it tactically, the way they’re going to deliver it.

NYU is in a very good position right now. It has the brand and the ability to deliver education, and it understands education like very few of the for-profits do. But Gordon Macomber agrees that it doesn’t have a culture that’s willing and ready to move in this environment yet. Despite the long-standing struggle that has existed between universities and extension education, NYU is moving beyond vitriol into who can really do what.

In the future, NYUonline also hopes to establish a string of NYUonline outposts in Europe. Given that NYU has the highest foreign enrollment of any U.S. university and is the nation’s largest translation school, its brand name may be as well-known in Europe as in the U.S.



1 The School of Continuing Professional Studies at NYU, which is degree-granting, has 2,500 adjuncts, and they are adding to those ranks all the time. The school is also serving approximately 70,000 people annually through that program. (OLn)

NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.


E-learning model: portal 
Funding model: private for-profit 
Leadership: John E. Kobara, President; Paula Singer, President and CEO of Sylvan’s Online Higher Education division 
Main Office: Los Angeles 
Revenue Streams: percentage of course fees 
Strengths: exclusive rights to ULCA Extension courses online 
Challenges: instructor hesitation (early on) (OLn)-formerly The Home Education Network (THEN), and now a subsidiary of Sylvan Learning Systems--is a private, for-profit organization offering accredited courses from UCLA Extension, the University of San Diego, the California CPA Education Foundation, and curriculum materials publisher Houghton Mifflin. also features courses from Fulcrum Information Services, USC’s Marshall School of Business, Syracuse University, Georgetown University, and offers its own instructor-led Computer Certification Programs and Courses. Since 1996, has accepted more than 20,000 enrollments from students in 50 states and 80 U.S. territories and foreign countries in 1,700 online courses.

PRODUCTS/SERVICES (OLn) has developed some unique relationships with institutions, associations and publishers to deliver, market, and provide support and training to instructors and their students. Accredited courses are offered in business, computers, education, general interest and writing. OLn’s own computer programs include Microsoft Certification, Certified Novell Engineer, A+ Certification, Cisco, and Red Hat Linux courses. Though undergraduate and graduate degrees are not offered by education providers, college credits can be earned through some online courses, and those credits can be transferred and applied toward a degree at another institution at that institution's discretion. OLn also offers certificate programs and courses to earn professional development credits (see Table 1).


Award in Accounting

Award in General Business Studies

Award in General Business Studies Concentration in Technical Communication

Award in General Business Studies Concentration in Accounting

Award in General Business Studies Concentration in Human Resources Management

Award in General Business Studies Concentration in Marketing

Award in General Business Studies Concentration in Personal Financial Planning

California Tax Series Certificate Program

Certificate in Character Education

Certificate in College Counseling

Cross-Cultural Language and Academic Development Program (CLAD)

Estate Planning Series Certificate Program

Federal Tax Series Certificate Program

Online Teaching Program

Professional Designation in Applications Programming

Professional Designation in Human Resources Management

Professional Designation in Personal Financial Planning

Teaching English as a Foreign Language Program (TEFL)

Teaching English to Speakers of Other Languages Program (TESOL)


Over 250 online courses provided by are broadly grouped into five communities: Business and Management; Computers and Information Systems; Education; Writing; and General Interest (see Table 2). Within each community, courses are located in specific neighborhoods. These neighborhoods more narrowly define the curriculum offered in its courses. This organization not only makes it easier for new students to navigate, but allows course managers and other support staff to be far more expert in each of their areas and to become familiar with individual students more quickly.





Business and Management


Award in Accounting, Award in General Business Studies (Accounting, Human Resources, Marketing, Personal Financial Planning, and Technical Communication), Business Basics, E-Commerce, Estate Planning (featuring CCPA Education Foundation courses), Investing, Professional Designation in Human Resources Management, Professional Designation in Personal Financial Planning, Public Relations, Real Estate, Taxation (featuring CCPA Education Foundation courses)



Advanced Placement, Character Education, Classroom Management and Instruction, College Counseling Certificate Program, Cross-Cultural Language and Academic Development, Diversity, Educational Leadership, English Language Development, Inclusion, Instructional Technology for Educators, Math, Online Teaching Program, Professional Development for Educators, Reading, Science, Special Interest, Teacher Certification Courses, Teaching English as a Foreign Language, Teaching English to Speakers of Other Languages, Tech Connect

Computer and Information Systems


Certification Training, Cisco Certified Network Associate, Microsoft Certified Professional, Microsoft Certified Solution Developer, Microsoft Certified Systems Engineer, Computer Graphics/Graphic Design, Computer Programming, General Computing, Information Systems, Microsoft Office, Professional Designation in Applications Programming, Web Design and Production, Web Technology

General Interest


Health Sciences, History, Art & Literature, Mathematics & Science, Philosophy, Political Science, Psychology/Sociology, Writing for Fun



Basic Writing Skills, Business Writing, Journalism, Nonfiction Writing, Public Relations, The Writers' Program (Creative Writing and Screenwriting), Writing for the Web’s online course instructors are experienced professionals their field of study. Instructors develop the curriculum, conduct the class, give the assignments, answer questions, lead discussions, and assign grades. Instructor-led online courses are interactive, feature specific start and end dates, usually require textbooks, and provide the same levels of academic or professional credit. Most online courses are six to twelve weeks in length. Class size ranges from 15-30 people. The schedule of coursework, assignments and due dates are determined by each instructor. No campus visits are required. Typically, the instructor grades students on assignments, projects, and participation in the course.

Online courses are not taught in real-time. These courses are "asynchronous," meaning that everyone need not be online at the same time. Online courses use a computer-mediated distance learning process. Some courses may use the chat mode--usually at the discretion of the instructor--in which case students do have an opportunity to communicate with the instructor and other students through a "live," text-based system.

Every course has its own Course Manager who acts as the primary contact for questions or problems that involve the mechanics of taking a class. In addition there is live, 24-hour free technical support available by phone seven days a week. Before students commence study, they attend a free online orientation, which brings them up to speed on the technical and logistical aspects of online education. Students also have individual start pages on the OLn website that provide a personalized guide for helping them get started and stay on track. Students have access to the "e-Friends" program at no cost, a service that provides networking opportunities with professional and working adult students from abroad.

Students in’s online courses have the opportunity to fill out an electronic evaluation for the courses in which they enroll. Like their paper counterparts in traditional classrooms, student evaluations elicit responses about the instructor's teaching of the course as well as about the course material and organization, but also, as befits an online classroom, about such issues as the student's experience of the software and support services. An email notifying students about the availability of the electronic evaluation access site is sent to students about two weeks before the course ends, and sent again at the end of the course if the student hasn't yet completed the evaluation. This ensures that a higher percentage of students have the chance to fill out the form and will remember to complete an evaluation. Course instructors receive their student evaluations from OLn once courses are finished for the term. To date, OLn reports that student responses to the online courses show a history of student satisfaction, with 85% of students rating online courses distributed by "as good or better than face-to-face learning. Nearly 90% of students have successfully completed their online courses and 90% say they are likely to take additional online courses distributed by also places a strong emphasis on instructor preparation and development. (OLn) works in conjunction with its education providers to offer and teach a six-week Instructor Development Training Program. The training program is conducted entirely online and successful completion is mandatory for all instructors who intend to teach online. It is a comprehensive program that combines software training along with lessons in the methods, approaches, and practical techniques for teaching online. OLn gives progress reports to the education providers on the status of instructors going through training and certifies their successful completion. This six-week training program offered elsewhere for several hundred dollars per person is a valuable professional development opportunity provided to instructors at no cost by OLn.

The Instructor Development Team at (OLn) has created a full-featured Instructor Community Web site providing the latest information instructors need to know, as well as continued training and professional development opportunities from OLn. The OLn Instructor Community website, includes professional development and networking opportunities for instructors. This site includes links to information on teaching strategies, instructional design, classroom management, technical skills building, and more. Additionally, there are links to short online tutorials, online refresher courses and seminars, and virtual guest speakers. OLn's education partners provide instructors an opportunity to network and exchange ideas with fellow online instructors through discussion forums. In addition to an Open Forum for all instructors, there is a Technical Q and A area, as well as separate forums for those in Technical Communication, Writing and Humanities, Computer and Information Systems, Business and Management, and Education. The OLn Instructor Development Team and OLn Department of Online Teacher Education moderate each discussion forum. Instructors are also provided with an online handbook that lists policies and procedures and whom to contact with possible questions as well as guidelines for online teaching and classroom management.

GOVERNANCE/MANAGEMENT has partnered with education providers for content, professional associations and course software providers (see Table 3).


Education Providers

UCLA Extension has the exclusive worldwide electronic distribution rights to courses developed by UCLA Extension for online delivery. UCLA Extension is the nation's largest single campus continuing higher education program, offering more than 4,600 courses annually.

University of San Diego has partnered with the University of San Diego Department of Continuing Education to offer quality credential and professional development courses for educators online. USD enrolls more that 6,700 students and is accredited by the Western Association of Schools and Colleges.

iLearning Inc. (formerly LeapIt) provides innovative training and educational solutions for businesses, associations and educational institutions. From content to delivery, iLearning's products are customized to meet each organization's educational needs.

California CPA Education Foundation

Founded in 1966, the Foundation provides quality continuing education and information to CPAs and other accounting and financial professionals. currently presents three certificate programs offered through the Foundation.

Professional Associations

National Education Association (NEA)

As America's oldest and largest professional education organization, the NEA is committed to bringing valuable professional development opportunities to its 2.5 million members nationwide. In December 2000, the NEA chose as its partner in providing its members with quality, instructor led online continuing education courses.

California Teachers Association (CTA)

Through a partnership between the CTA and, CTA members can participate in high quality, online professional development courses that satisfy California state requirements. Whether an educator needs to renew a teaching credential or fulfill requirements to earn a California Professional Clear Credential, provides the coursework necessary in a convenient, online format.

National Association of Insurance and Financial 
Executives (NAIFA) has partnered with NAIFA’s (formerly NALU National Association of Life Underwriters) local associations to offer its members a special course discount, including those required courses necessary to earn UCLA Extension's Professional Designation in Personal Financial Planning (PFP). This nine-course program is directed at those entering the financial services industry as the suggested method for achieving a certain level of knowledge and competency before becoming a practicing professional.

National Association of Female Executives (NAFE)

As the largest women’s professional association and the largest women business owners’ organization in the country, provides resources and services - through education, networking, and public advocacy - to empower its members to achieve career success and financial security. Members receive a special discount on any instructor led course at

UCLA Alumni Association

As a UCLA Alumni Association corporate sponsor, offers all current Association members a special discount per quarter on a UCLA Extension online course and a connection to continuing higher education for lifelong learning objectives.

Course Software Provider


Blackboard Inc. was founded to transform the Internet into a powerful environment for teaching and learning. The company offers a complete suite of enterprise software products and services that power a total "e-Education Infrastructure" for schools, colleges, universities, and other education providers. Blackboard solutions deliver the promise of the Internet for online teaching and learning, campus communities, auxiliary services, and integration of Web-enabled student services and back office systems. helps market and publicize its educational partner’s online courses nationally and around the world. OLn also assists in recruiting efforts for its education providers but prospective instructors are actually hired by the respective providers, who are ultimately responsible for providing contracts and payment to instructors. Houghton Mifflin approves the hiring of its instructors but issues the contract and payment to instructors, while University of San Diego issues the credit for the course, sends out grades, and issues transcripts to students. Each institution has additional policies and conditions that may be stipulated in their contracts or through handbooks distributed at the time of hiring. does not claim any intellectual property or copyrights for the course materials offered by the institutions, associations, or instructors whose courses they deliver and support. Each institution and association has its own policies, procedures and arrangements with its instructors regarding intellectual property and copyrights. Likewise, does not act on the instructor’s behalf to secure copyright clearance and permissions for use of third-party materials, nor does it provide legal advice.


The Home Education Network (THEN), later renamed (OLn), was established in January of 1993 as a private for-profit company. THEN was the brainchild of Alan Arkatov, a TV Producer and political media consultant who, according to distance education critic David Noble, also enjoyed very close ties to the entertainment industry and higher Democratic political circles. Arkatov planned to develop a method of distributing extension courses electronically beyond the classroom. THEN officially signed a 10-year contract with UCLA in 1994 that granted the company exclusive rights to distribute and market video recordings of UCLA's extension courses. In 1996, the agreement was amended to include on-line courses as well.

David Noble claims that UCLA originally expected great financial windfall--in the millions of dollars--from their relationship with THEN and, as a result, "adopted the posture of a venture capital operation, expending public funds and offering THEN the use of its public resources. UCLA appears to have afforded Arkatov privileged use of the UCLA brand name, access to its marketing and publication facilities and staff, and even mailing lists…" (Noble, 2001) Later it became apparent through contract negotiations that expected returns were significantly less than expected.

From the beginning, the issue of content and distribution ownership was much in debate between instructors, UCLA extension, and THEN. Though attempts were made to secure contracts with instructors that waived the rights to ownership and gave THEN the ability to distribute the materials electronically, instructors would not sign. By 1996, THEN shifted its emphasis to online delivery without a signed contract from instructors, and piloted extension courses online during the spring term. UCLA extension, at that time, claimed publicly in a press release that their agreement with THEN "ensures that all intellectual property rights ... are appropriately protected" (as cited in Noble, 2001). John Kobara, vice-chancellor of UCLA for marketing and public relations, became the president of THEN in January of 1997. In May 1998, THEN was renamed

In September 2000, OLn added new marketing and content partners including Fathom,,, and Fulcrum Information Services in an effort to strengthen a nationwide network of marketing channels for while tapping into an unprecedented number of new users in the U.S. and abroad. In May 2001, citing a response to a changing economy and increased enrollment in traditional business and management courses, OLn shifted its marketing strategy to a "back-to-business" basics approach and teamed with the California CPA Education Foundation to offer two new professional certificates online.

In July 2001, Sylvan Learning Systems acquired as part of its recently launched Online Higher Education division. After a series of acquisitions in higher education, Sylvan now owns all or part of four business units that are managed under the new division. The businesses-Canter & Associates, Walden University, Sylvan Teachers Institute, and -have retained their own names. Paula Singer, a senior Sylvan executive since 1993 who had been serving as president of Sylvan's Education Solutions division, has been named president and CEO of the Online Higher Education division. Sylvan has annual revenues of about $175-million from its elementary- and secondary-education services, and projected revenues of $300-million this year from its postsecondary education business units.


UMassOnline (UMO)

NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.


E-learning model: internal portal 
Funding model: not-for-profit arm of UMass 
Leadership: Jack Wilson, CEO 
Main Office: Boston 
Funding Source: government/university venture capital 
Strengths: regional/brand credibility

UMassOnline, the web-based learning portal for the five-campus University of Massachusetts system, provides online courses, certificates, degree programs, and corporate and professional education opportunities. UMassOnline (UMO), launched in February 2001, has more than 6,000 enrollments in 25 campus-based online degree and certificate programs (see Table 1), making it the largest distance learning organization in New England.




Certificate in Adapting Curriculum Frameworks (Boston)

Bachelor of Science in Hotel, Restaurant, and Travel Administration (Amherst)

Certificate in Clinical Pathology (Lowell)

Bachelor's Degree in Information Technology: Business Minor (Lowell)

Certificate in Instructional Technology Design (Boston)

Certificate in Communications Studies (Boston)

Certificate in Photonics and Optoelectronics (Lowell)

Certificate in Contemporary Communications (Lowell)

Master's Degree in Educational Administration (M.Ed.) (Lowell)

Certificate in Technical Writing (Boston)

Master of Public Health in Public Health Practice Track (Amherst)

RN to Bachelor of Science (Nursing) (Amherst)

Master of Science (Nursing) Community/School Health (Amherst)

Associate of Science in Information Technology (Lowell)

MBA Professional Program (Amherst)

Bachelor of Liberal Arts (Lowell)


Bachelor of Science in Information Technology (Lowell)


Certificate in Data/Telecommunications (Lowell)

Fundamentals of Arts Management Certificate Program (Amherst)

Certificate in Fundamentals of Information Technology (Lowell)

Online Communications Skills Certificate (Dartmouth)

Certificate in Intranet Development (Lowell)


Certificate in Multimedia Applications (Lowell)


Certificate in Plastics Technology (Lowell)


Certificate in UNIX



UMassOnline is an outreach effort of the University of Massachusetts campuses (Amherst, Boston, Dartmouth, Lowell and Worcester), which are fully accredited by the New England Association of Schools and Colleges. UMassOnline brings together all the online academic resources of the campuses in the University of Massachusetts system, but doesn’t grant degrees. Degrees are awarded from the individual campuses. Each campus has its own registration process and fee structure, and fees vary by program depending on whether the course offered is noncredit or for credit and the level of that credit (i.e., undergraduate or graduate).

UMassOnline focuses on the needs of Massachusetts and the region, but is marketed without regard to region. UMO’s target audience is a wide range of working professionals, military personnel, stay-at-home parents, people with disabilities, human resources managers looking for new opportunities for employees, and UMass alumni. Any person with a high school diploma or its equivalent (GED) may register for noncredit, undergraduate, or graduate courses. Students must have a bachelor's degree to be admitted to a graduate degree program. Some courses may require prerequisite college-level work. Students may enroll in courses before being formally admitted to a degree program, though enrollment does not imply acceptance into a degree program. Students may take courses simultaneously at any of the UMass campuses, though they may encounter different policies, procedures, academic calendars, and fees. Course credits are not automatically transferable from one campus to another. Credit earned by successfully completing UMass courses from one campus can, in most cases, be transferred to other campuses, colleges, and universities at the discretion of the accepting campus or school. Student services are provided by the campus in which the student enrolls. UMassOnline students receive the same benefits as their on-campus peers.

Courses at UMassOnline are taught by resident UMass faculty, adjunct professors, and experienced real - world professionals. The courses meet the same stringent academic requirements as traditional on-campus courses. Online courses include exercises, projects, and collaborative assignments as well as tutorials and courses with audio lectures, photo materials, discussions, chat rooms, readings, illustrations, and video. Academic advising, library facilities, textbooks, and more are available to online students. UMass courses are rigorous and require students to complete work by set deadlines. UMassOnline courses generally follow the campuses’ standard academic calendars and begin in early fall, spring, and summer.

Interaction with the instructor is an important aspect of a quality online education. Instructors answer e-mail questions, participate in online discussions, and personally evaluate assignments. Instructors also update course content to insure that courses stay on the cutting edge. Instructors keep scheduled "office hours" each week. Students communicate with other students and the instructor through e-mail and threaded discussions.

UMassOnline is taking a major step in building its eLearning technology infrastructure and expanding its capacity for delivering educational programs over the Web by building and hosting a dual platform eLearning "utility." UMassOnline will use software from Prometheus and IntraLearn to create a portal allowing students to manage their online courses. The software will also help professors develop virtual classrooms for their own courses.

"The decision to build and host this world class system internally gives us control of our distance learning destiny, as well as the capacity to rapidly respond to faculty and student needs," says Jack Wilson, UMassOnline CEO. "UMassOnline selected learning management systems (LMS) from Prometheus and IntraLearn because they can be hosted internally, have superior features, functionality, and ability to be customized, as well as receiving high ratings from our cross-campus selection team" (Press Release, 1 October 2001). IntraLearn, based in Northboro, MA, has a three-year tenure as UMass Lowell's eLearning platform of choice. Prometheus, based in Washington, DC and developed by The George Washington University, is new to the UMass system, but received high marks from the faculty for its customizable interface and community source code.


Dr. Jack M. Wilson, a leading national authority on distance learning and higher education innovation, is the chief executive officer of UMassOnline. Besides managing one of the most highly respected higher education technology initiatives in the country, Dr. Wilson teaches an Introduction to eBusiness course to 60 - 120 students per semester for the graduate MBA and Information Technology programs. About half of those students meet with Dr. Wilson in a classroom while the other half take the class live online from their homes and workplaces across North America.

UMassOnline has developed a draft set of principles that vest course approval authority in existing campus governance processes, requires programs to be sponsored by a lead campus, rewards faculty for developing distance learning courses, and demands high quality teaching. Because the increasing involvement of University faculty is critical to the success of distance learning, UMassOnline is designing a new training program for faculty across the system, taught by UMass faculty and targeted at faculty who have an interest in online education.


UMassOnline is a completely not-for-profit entity, as an arm of the University of Massachusetts. Jack Wilson says that could change. "We decided that it made sense to be able to get the kind of fast start that we wanted and to take advantage of the various things going on at different campuses, but we plan to re-examine that decision from time to time. Our key goal is to take a high-end approach, and we didn't want to compromise that by going ahead and fund raising. Fortunately, we didn't need to do that -- the state has put up sufficient venture capital" (Carr, 9 March 2001).

UMassOnline has really achieved a surprising level of consensus support combined with a healthy amount of controversy. Wilson describes UMass’s approach as "ecumenical," emphasizing "we don't want to hammer it all into one mold. Just looking at the range of programs that we are starting with;, we are including various types of technologies and interactions. We are not calling it asynchronous learning as many do. We will have asynchronous learning, but also live learning. And as time goes by, we will adjust our models" (Carr, 9 March 2001).

The University of Massachusetts has been a leader in distance education for over 25 years. In 1975 UMass was among the first to send out videotaped engineering courses and one of the seven founding members of National Technological University. UMass has been delivering education via the Web since 1995. Additionally, the US Army has recently selected UMassOnline as one of its partners to deliver e-learning to military personnel around the world.


UNext / Cardean University

NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.


(Updated information available below.)

Websites: http://www.unext.com 
E-learning model: coporate-university joint venture: hybrid course/content provider 
Leadership: 1997, by Andrew Rosenfield, an entrepreneur and lawyer who has also been a professor and trustee at the University of Chicago. Geoffrey M. Cox, Cardean University President / UNext Vice President for Academic Affairs. Board of Directors, Academic Advisory Board 
Location: Deerfield, IL 
Employees: 335 full time 
Enrollment: Nearly 2,000 students between summer 2000 and May 2001 
Programs: UNext-through Cardean University-offers an M.B.A. program and shorter, nondegree courses in business subjects. 
Customer: General Motors, AOL Time Warner, Barclay's Capital, and others 
Investors: Include Thomson Learning and Knowledge Universe. 
Courses: 80 (as of May 2001)

UNext was founded in 1997 as a privately held corporation by Andrew M. Rosenfeld, a lawyer, entrepreneur, and former professor at the University of Chicago. UNext is partnered with an elite group of academic institutions including Carnegie Mellon, Columbia, and Stanford Universities, as well as the University of Chicago and the London School of Economics and Political Science. It aims to provide training and development solutions to corporations globally, and to provide educational opportunities for people around the world. Cardean University, an online degree-granting university for business education, is a wholly owned subsidiary of UNext, which provides the managerial support and infrastructure for Cardean's operations. During its first year of operation, UNext enrolled about 2,000 students in nearly 100 courses through Cardean University, and employed nearly 400 people.


UNext offers two basic types of business courses through its subsidiary, Cardean University: degree-based courses, and noncredit professional development courses. Both types of courses are grouped into "suites" of four courses each. A master's-degree course takes about six weeks to complete (25-30 hours in total) and is based on a problem-centered approach, in which students are confronted with real-world business scenarios. They cost about $500 each. Shorter courses, called "Quantum" courses provide focused overviews of specific business topics and take less than two hours to complete within a two-week period. Quantum courses are offered in a package of five for $380. All Cardean courses are broken into a series of tasks, each with a specific objective for the student. Courses are interactive, using e-mail messages and discussion boards as well as multimedia features such as animations. The Cardean University Student Center offers a variety of resources for business professionals, including links to leading business publications, key business resources on the web, tools, and calculators.

Cardean University is accredited by the Accrediting Commission of the Distance Education and Training Council. Cardean University is the first online university to receive degree authorization from the Illinois Board of Higher Education and currently offers an accredited M.B.A. degree as well as certification and continuing education units in certain subject areas. Cardean intends to broaden its offerings over time.

The quality of content provided by partner institutions has helped the company win some major deals, including a new multimillion-dollar contract to offer courses to General Motors employees. The business model depends on making a huge up-front investment rather than a business-to-consumer model of selling individual courses. UNext has an unusually extensive system for evaluating its offerings. Almost every day, the company pays people to come to its offices and test its courses. As they progress through them, UNext officials watch the testers via dozens of television screens.

The company’s biggest expense is course development, which can reach $700,000 for a single full-semester course. The largest expenses in the course-development process are labor and payments to UNext's partner universities. UNext has hired teams of editors, cognitive scientists, and technicians to assemble the courses. Several professors at UNext's partner institutions say their involvement in the development process has been primarily at the outline level. Teaching is broken down into disaggregated duties. Senior faculty, who work with experts at partner universities, are involved in all aspects of curriculum planning, student assessment, and institutional academic evaluation. Adjunct faculty interact directly with students in the learning environment by assessing student work, evaluating assignments, and providing informed and useful feedback. Advisory faculty mentor new faculty members, support and evaluate adjunct faculty, advise students, and ensure the quality of instruction in delivering Cardean courses.


Intitial funding for UNext was provided by Knowledge Universe, an organization of financier Michael Milken, though he has no voting rights in the company. Additional funding of undisclosed amounts was provided by other outside investors. UNext has raised a total of $180 million, including the Thomson Corporation’s March 2001 $38 million investment and $18 million in credit, and has spent about $120 million to date. None of the partner universities have invested in UNext, although they do have the opportunity to convert part of their compensation into an equity stake in the company after it goes public, collectively about 20 percent. Administrators at the universities estimate that their individual contracts with UNext are each worth about $20 million, although each is structured slightly differently. The professors who help develop the courses do not have contracts with UNext, but instead make individual arrangements with their institutions about compensation for their participation. As recently as August 2001, UNext had asked its partners to restructure their agreements with the company.

UNext's original plan of selling blocks of courses to large corporations has not been as successful as its leaders had hoped. While UNext has made several major sales to companies such as General Motors, Barclay’s Capital, AOL Time Warner, and Singapore Technologies, they were surprised that that investment-banking companies were not more interested in the UNext courses. Though the slowing economy did not affect investments, UNext has had difficulty becoming profitable. As a result, UNext has shifted its focus to develop shorter courses to better meet the demands of the corporate marketplace. In May 2001, UNext laid off 52 of its nearly 400 employees.

UNext has also expanded beyond its initial model of selling business courses to corporations by including universities, organizations and individuals in its target market strategy. UNext plans to start a program called Get To Work, through which college students approaching the end of their undergraduate careers could take a course introducing them to basic business concepts. The program, which would cost students about $1,000, would be aimed at liberal-arts students unfamiliar with the job-search process in business. UNext plans to work with a career site on the Web to market Get To Work, and to send mailings to college career centers. Some university officials talk about eventually paying to use UNext's team of course graders, or purchasing just one segment of the company's services. UNext has already started to offer broader consulting services to some corporations, advising them on their employee-training practices.


In January 2002, UNext signed marketing deals with Thomas Learning and Knowledge Universe to bolster lagging sales. Thomas Learning will target large businesses while Knowledge Universe will be responsible for smaller companies, both of which will be selling courses aimed at business executives. This new arrangement threatens even more of UNext's employees, 70 of whom have been warned that their jobs could be cut this year.


Universitas 21

NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.


E-learning model: consortia, online university 
Funding model: private, for-profit 
Leadership: Sir Graeme Davies, Chair of Universitas 21 and Vice Chancellor of the University of Glasgow 
Location: Britain (incorporated) Australia (website) 
Revenue Streams: undeclared, but it assumed that U21global will depend upon tuition and fees 
Funding Source: $25 million from Universitas 21 member institutions and $25 million 
Profitability expected: 10 years 
Strengths: portable degrees/credit, brand names of educational partners 
Challenges: perceptions among higher education leaders about corporate online course development

Universitas 21 LBG[1] is an international network of 17 research-intensive universities in Europe, North America and East Asia, including South East Asia and Oceania, founded in 1997. Collectively, its members enroll about 500,000 students each year, employ some 44,000 academics and researchers, and have a combined operating budget of almost $US9 billion. Fifteen of the 17 member institutions are also involved in U21Global, an online university created as a joint venture between Universitas 21 and Thomson Learning in September 2001.

Universitas 21 also has two incorporated subsidiaries, U21pedagogica and U21equity. U21pedagogica, drawing heavily upon the well-established internal quality assurance processes and expertise of Universitas 21 member institutions, provides quality assurance services to higher education under the direction of its Academic Standards Council.[2] U21pedagogica, the exclusive provider of quality assurance services to U21 global, ensures that standards are maintained consistently with relation to admissions, course design, development, pedagogy and courseware, and assessment procedures. U21equity provides a corporate structure to manage the consortium's financial arrangements for U21global.


Founded in 1997, the consortium's original aim was to enhance collaboration in research and through staff and student exchanges. Another goal was to develop international benchmarks through a shared set of performance indicators. Currently, Universitas 21’s core business is providing a pre-eminent brand for educational services supported by a strong quality assurance framework. It offers experience and expertise across a range of vital educational functions, a proven quality assurance capability and high brand value. Universitas 21 has been established for the purposes of:

  • Developing international curricula for graduates educated and trained to operate in a global professional workforce, with credentials that are internationally portable and accredited across a range of professional jurisdictions;
  • Providing a quality assurance structure that operates globally to offer internationally valid processes for the enrollment, instruction, assessment and certification of students, and an internationally recognized brand identifiable with a global network of high quality universities;
  • Providing partnership opportunities for major new providers, including corporate universities, wishing to access a fast-growing international market for higher education and advanced training;
  • Bringing to such partnerships international recognition and legitimacy, premium higher educational branding, a demonstrable quality assurance capability, and a proven capacity for producing and delivering quality higher education and training programs.

As an incorporated entity, Universitas 21 is in a position to leverage the reputation, resources and experience of its members on behalf of corporate partners. Universitas 21 is therefore uniquely placed to address the cross-jurisdictional branding requirements of new educational providers.

U21global, on the other hand, is scheduled to begin operations in January 2003. It will initially concentrate on the M.B.A. market and other business-related postgraduate seeking students in Singapore, Malaysia, and Hong Kong, and will later attempt to attract students in Africa, China, and Latin America. Planners of U21global, which would offer courses for professionals, chose Asia as a starting point in part because students are brand-conscious, and thus will be receptive to online courses delivered by well-known universities in the consortium. The language of instruction will initially be limited to English, but will be extended to include Mandarin by 2003 and Spanish by 2006.

Thomson Learning and Universitas 21 will produce new curricula, courseware and delivery platforms designed specifically to deliver an effective e-learning experience. The courses will be delivered over the Internet, augmented by satellite television when necessary. Thomson Learning will be responsible for the course design, testing and assessment, and student-database management for the project. Universitas 21 will award degrees, diplomas, or certificates to students who complete course requirements. U21 global will not offer any course or accredit any award that has not been validated and endorsed by U21 pedagogica, an international quality-assurance agency established by the Universitas 21 universities to operate at arm's length from U21 global. Course offerings will receive multi-jurisdictional accreditation from the 15 Universities that are participating in U21global.


Universitas 21 functions as an equal partnership of its members (see Table 1). The number of members is limited to no more than 25 institutions. Membership of the Board of Universitas 21 is made up of the Managing Director of the Company and the Chief Executive Officers of the member institutions. A meeting of the Universitas 21 Board is held annually. The Executive Committee of Universitas 21 acts on behalf of the Board on the day to day operations of the Company between meetings of the Board. The current Chair of Universitas 21 is Professor Sir Graeme Davies, Vice Chancellor of the University of Glasgow. The Managing Director and Company Secretary is Dr. Chris Robinson.


North America

McGill University* 
The University Of British Columbia* 
The University Of Michigan 
The University Of Virginia*


The University Of Birmingham* 
The University Of Edinburgh 
The University Of Glasgow* 
The University Of Nottingham* 
Lund University Sweden* 
Albert-Ludwigs University Freiburg*

East Asia

Fudan University* 
Peking University 
The University Of Hong Kong* 
The National University Of Singapore*

Australia & New Zealand

The University Of Melbourne* 
The University Of New South Wales* 
The University Of Queensland* 
The University Of Auckland*

*Participants in U21Global online university


Universitas 21 had signed a memorandum of understanding in April 2000 with TSL Education Ltd., a British subsidiary of Rupert Murdoch's News Corporation, to establish a joint venture that would offer online graduate-level courses around the world. Microsoft was named as the "preferred third party" in the deal. At the time, the three groups planned to grab a major share of the rapidly expanding global higher-education market, but that deal fell through in November 2000.

After a year of negotiations, Thomson Learning and Universitas21 formed a joint venture in September 2001 to establish U21global, an online university. Each organization pledged $25 million in funding. In order to raise funds, Universitas 21 turned to its member institutions. Each of the 15 universities involved in U21global agreed to pay at least $500,000, with some institutions investing as much as $5 million. While most universities did not disclose the amounts they invested, the Universities of Glasgow, Melbourne, New South Wales, and Queensland are known to have specified the sums they intend to contribute. The three Australian universities have promised up to a total of $8 million, including $5 million from Melbourne. Glasgow has indicated it will put in up to $2 million.

The Asian-based venture will address the estimated $111 billion global demand for higher education by offering business and technology degrees via the Internet, starting in January 2003. Revenue of $500 million is projected by the 10th year for U21global, with the profits being split among Thomson Learning and the member institutions.

The challenge will be to provide relevant, accessible higher education of a consistently high quality to students who in many cases will have no access to conventional campus-based education. Participating universities were confident about the academic integrity and commercial viability of U21global.

The plan to set up an online institution in conjunction with Thompson Learning to market graduate courses alarmed some member institutions. Two institutions decided not to participate in the planned global online university. Among other issues member institutions cited were concerns about how the consortium would use their names and logos in issuing its own certificates and degrees. The University of Toronto, a founding member of the consortium, resigned from Universitas 21 altogether, and the University of Michigan system decided not to participate in U21global, although it remains a member of the consortium. Michigan representatives expressed concern that faculty would not be sufficiently involved in the development or assessment of courses, or the quality control of the venture's academic programs. They also stated that their educational interests would likely be better served through other ongoing elearning activities. Representatives from the University of Toronto indicated that the U21global project was moving too rapidly, and that the University of Toronto could not make the necessary policy decisions in time.

During negotiations with Thomson, a group of five faculty unions also complained about the speed of U21global's planning process, calling on the group to hold off on establishing the virtual university until all academic and employment issues had been resolved. The faculty unions sought clarification of issues of governance, intellectual freedom, quality assurance, and intellectual property, as well as financial arrangements surrounding the proposal. The president of the American Association of University Professors, Jane Buck, and the heads of unions in Australia, Britain, Canada, and New Zealand raised their concerns in a letter to the Universitas 21 chairman at the time, Alan Gilbert, Vice Chancellor of the University of Melbourne. The chief concern involves contracting out course design, content development, and testing and assessment to Thomson Learning, which are core academic tasks that should stay with faculty members.


1. Limited by Guarantee. Universitas 21 is incorporated in Guernsey, Britain. 
2. The Academic Standards Council of U21pedagogica approves courses, subjects, templates, instruction and assessment, ensuring that each meets Universitas 21 quality standards.

Western Governors University (WGU)

NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.


E-learning model: portal, distance education 
Funding model: private, for-profit 
Leadership: Robert Mendenhall, President and CEO, Western Governors University 
Employees: 30 in four states 
Location: Salt Lake City, Utah 
Revenue Streams: tuition and fees from partner courses 
Funding Source: $100,000 start-up from member states, private corporate sponsorship 
Profitability expected: to be determined 
Strengths: accredited, draws on knowledge/courses from educational partners, corporate sector supports competency-based assessment 
Challenges: slow start up, name recognition, educational researchers critique competency-based assessment

Western Governors University (WGU) is private, not-for-profit, virtual university offering competency-based degrees at the associate's, bachelor's and master's level. WGU was founded in June 1995 as a joint venture by the members of the Western Governors Association to address regional higher education needs. WGU's first degree and certificate programs were opened to students through its website ( ) in 1998. WGU is the only competency-based university with accreditation status.

The university has 30 employees and faculty members in its Salt Lake City, Utah, office, where WGU is based, and online in California, Colorado, South Dakota, Washington and Wisconsin. As of February 2001, the university had 500 students enrolled, up from 200 students in the previous year. The average age of WGU students is 40 years, and 85 percent work full-time. WGU has students enrolled from 44 states and 5 countries, with a nearly even split between male and female students. In addition, WGU has 10 articulation agreements in place with institutions from around the country.


The university offers 939 business, information technology and education courses in its online catalog from 45 education providers across the United States and Canada. There are three types of classes offered through WGU: self-paced, which are typically asynchronous or have a flexible schedule; term-based, which have a fixed beginning and end date, and which students often take with a cohort or group; and short-term, which also have a fixed beginning and end date and are completed in one week or less.

The courses and programs offered through WGU are delivered to students through various distance learning methods. Those methods include some high-tech approaches (such as desktop video) and traditional approaches (such as postal correspondence). Some high-tech ways of connecting students and teachers include e-mail, the World Wide Web, closed-circuit cable television, video and audio tapes, video conferencing, satellite broadcasts, and voice mail.

Instead of entrusting a single professor with the authority to design a course of study, deliver information, and test students on their knowledge, W.G.U. divides those tasks among several groups. WGU's distributed faculty includes mentors, the program councils, and the assessment council. Each student is assigned a mentor who is knowledgeable in the student's program field to work with a student throughout his or her progress toward a degree or certificate. The mentor develops an Academic Action Plan, a kind of roadmap, for the student to follow to earn a degree or certificate. Program councils, which are comprised of experts from the program field, examine the competency-based degrees and certificates, and must approve them prior to inclusion in the Catalog. Faculty on the assessment council, who are national assessment authorities, are responsible for reviewing credentialing assessments to ensure that they are valid measures of the competencies related to a given degree or certificate. WGU does not have any teaching faculty, because all courses are taught by the education providers' instructors.

The costs of courses and programs offered through the WGU vary according to the education provider and the class. The Catalog lists the total cost for a class (including WGU's fees), and the cost is the same for all WGU students who enroll in the class, regardless of their state of residence. Tuition varies by program and ranges from $120 for a single course to $4900 in tuition.

The competency-based model is designed for the working adult who already has a mixture of college and work experience and doesn't have time to go back to school. Each degree or certificate program has its own application requirements, although several of the certificates are generally unrestricted. WGU awards its degrees and certificates based on what a student knows, rather than on the number of hours a student spent in class or the number of credits earned. WGU does so by administering assessments that give students an opportunity to demonstrate mastery of a particular subject area by showing competency in a number of "domains." These include general education, such as writing and mathematics, and domains specific to the subject, such as business management. Students illustrate mastery by passing a number of assessments, which can range from a pencil-and-paper test to a hands-on demonstration of a skill. These assessments correlate to a specific set of competencies or performance descriptions.

Each major has its own project requirements. For example, in an associate degree of business science, students have to create a marketing plan for a small company. The project takes the form of a five-page essay in which students detail how a company can improve its reach to customers. These projects are part of the university's portfolio requirement. Professors review the portfolio to determine whether the student has demonstrated the knowledge and skills to earn a degree.

Western Governors officials create some of their own assessment examinations and buy some from other organizations, such as the ACT and the Educational Testing Service. For WGU's own exams, experts from the professional and academic arenas collaborate to determine what students need to demonstrate to prove they are competent in a field. Unlike traditional colleges, Western Governors separates assessment from learning. The professors who grade the assessment exams have not had any prior interaction with the student.

Western Governors learned how to assess outcomes from other institutions, such as Excelsior College and Alverno College, a women's institution in Milwaukee. The university has found that assessment is particularly popular with private companies whose employees take the university's courses. The university gets much of its money as donations from such companies, and it works with them to create degree programs and to find out what knowledge students must have to be able to do jobs at the companies well.


WGU selects education providers that meet its strenuous quality screening to list courses and programs in the catalog. To assist its affiliated education providers in developing their niches and in meeting students’ expectations for their courseware, WGU offers several support services to them, including communications, student support services, advisement and consultation, market recognition, and transfer and articulation. One of the most-cited reasons for such collaborations is that they create successful marketing tools. Institutions can take advantage of creative ideas developed at neighboring institutions. And colleges can share services and courses, instead of reinventing the wheel. Additionally, WGU gives its affiliate education providers a world-wide stage for their distance-delivered courses as well as support services such as the Online Bookstore, Central Library, and student support services.

The university is overseen by a number of boards, including a National Advisory Board, a Board of Trustees, and an Academic Policy Committee.

The WGU National Advisory Board was created in order to enhance the implementation of the WGU mission, and aid in the strategic planning process of the WGU. The NAB serves at the pleasure of the Board of Trustees and consists of a diverse group of industry representatives, currently including the fields of technology, publishing, and consulting. The primary aim of the NAB is to foster a global and visionary perspective consistent with the successful implementation of the Western Governors University. (See appendix 5 for a list of board members)

The members of the Board of Trustees are elected by the governors of the states that participate in WGU. WGU is governed by a board of trustees made up of educators, industry leaders, and governors. (See appendix 3.)


W.G.U. started with $100,000 from each member state; now it relies on corporate partnerships and donations to keep afloat. The university gets much of its money as donations from private companies whose employees take the university's courses. WGU originally charged a $30 fee for each course, but now receives a percentage of each student's tuition, with the rest going to the institution through which the course is offered.

The university has 22 corporate and foundation partners with its newest partners including Convergys, the Bill & Melinda Gates Foundation, Marriott, Oracle, SCT and Qwest. These partners join America Online, Apple, AT&T, Cisco Systems, Drake International, IBM, KPMG Consulting, Micron Technology, Microsoft, Novell, Sallie Mae, Alfred P. Sloan Foundation, Sun Microsystems ($285,000), Swartz Foundation, Thomson Learning/Prometric, and 3Com in their support of the university and its mission. These foundations and corporations have invested in the institution because they believe they are helping to create much needed change in higher education. Corporate sponsors see their investments as seed money to grow a new model university that will both be relevant to business demands and a leader in training and education.

WGU had rocky beginnings. One challenge WGU’s administrators and member institutions didn't completely anticipate when the collaboration began is that the novelty of the arrangement itself -- combined with a considerable amount of plain old hype, generated by the governors and members of the Western Governors Association, who were pushing for the creation of the institution -- brought such high expectations that managing them became a problem in its own right.

Nearly two years into operations, only about 200 students had enrolled in WGU degree programs and 150 more students had signed up for individual classes. Western Governors originally anticipated 500 degree-seeking students by the year 2000. Also, the institution advertised that it would have 3,000 students participating in certificate programs and 7,000 in corporate training programs, but by mid-2000, neither of those programs had been developed. Since then, WGU enrollment has increased 150% to 500 students. No figures are available for individual course enrollment.

The biggest hurdle facing WGU officials was the long-awaited accreditation process. By November of 2000, WGU was granted accreditation status by the Inter-Regional Accrediting Committee (IRAC), which is composed of representatives from four regional accrediting agencies. In June of 2001, WGU was finally granted accreditation from the Accrediting Commission of the Distance Education and Training Council (DETC).

Because of its unique combination of political support at both the state and federal level, corporate and foundation support, and educational partnerships, WGU has been a leading innovator and thought leader in higher education. Though WGU has had lower than expected enrollment, its corporate sponsors feel that it has had reasonable growth in both programs and students and WGU leadership expects that it will continue to grow.


AOL opened an education portal (AOL Online Campus) in December 2001 that directed AOL subscribers to distance education programs offering degree-offering, career-based and personal-enrichment courses, and Western Governors Universities, among others, has paid a fee to have a link included. Financial terms were not disclosed. In February 2002, WGU announced a scholarship program for Olympian teachers to receive master's degrees in math and technology, although approximately $1.8 million in federal money for WGU is currently threatened by President Bush's request to Congress in February to rescind earmarked funds.




American College of Computer & Information Systems 
United States Sports Academy


Magellan University 
Northern Arizona University 
Rio Salado College 
THE Institute


California National University 
Chapman University 
Fresno Pacific University 
Teacher Universe


ISIM University 
Jones International University 
Regis University 
University of Colorado - Boulder


University of Hawai'i, Hilo 
University of Hawai'i, Leeward Community College 
University of Hawai'i, Manoa


Idaho State University 
New Horizons Computer Learning Centers







Chadron State College 
Metropolitan Community College 
Education to Go/Metropolitan Community College


Community College of Southern Nevada



New Hampshire


New Mexico


North Dakota



Marylhurst University


National American University

South Dakota


Territory of Guam

Dallas County Community College 
ITP/Course Technology 
Texas Tech University 
University of Texas at Arlington


Brigham Young University 
Utah State University


Champlain College




IBID Educational Services 
Washington State University 
Western Washington University


University of Wyoming


Athabasca University




The Open University

Great Britain

Open Learning Agency


Tokai University Educational System


Universidad Virtual del Instituto Tecnologico y de Estudios Superiores de Monterrey (ITESM)



Cisco Systems 
Drake International 
HP Invent 
KPMG Consulting 
J. Willard and Alice S. Marriott Foundation 
Alfred P. Sloan Foundation 
Sun Microsystems 
Prometric Thomson Learning 


Eric A. Benhamou

Chairman, 3Com Corp.

Jim Geringer

Governor of Wyoming

Kim Jones

Vice President, Worldwide Field Operations, Sun Microsystems

Tony Knowles

Governor of Alaska

Michael O. Leavitt, Co-chair

Governor of Utah

Gary Locke, Co-chair

Governor of Washington

Clara M. Lovett

President Emeritus, Northern Arizona University

Judy Martz

Governor of Montana

Robert Mendenhall

President and CEO, Western Governors University

Tom Pelto

Vice President, Law & Government Affairs, AT&T Corp.

David Powers

Executive Director, Nebraska Coordinating Commission on Higher Education

Roy Romer

Former Governor of Colorado Superintendent, Los Angeles Unified School District

Sean Rush

General Manager, Global Education Industry, IBM Corp.

Samuel H. Smith

President Emeritus, Washington State University

Tom Vander Ark

Executive Director, Education, Bill & Melinda Gates Foundation


Jim Geringer

Governor of Wyoming

David Powers

Executive Director, Nebraska Coordinating Commission on Higher Education

Samuel H. Smith

President Emeritus, Washington State University

Bess Stephens

President & Executive Director, Hewlett Packard Company Foundation

Tom Vander Ark

Executive Director, Education, Bill & Melinda Gates Foundation

Karen Vauk

Academic Relations Manager, Micron Technology Inc. and Education Program Officer, Micron Technology Foundation


Robert Autor

Senior Vice President of Corporate Development, Sallie Mae

Greg Baroni

Higher Education Partner-in-Charge, KPMG Peat Marwick

Eric A. Benhamou, Chair

Chairman, 3Com Corp.

Lori K. Dalton

Vice President Education Initiatives, Oracle Corporation

Garth Howard

President, Custom Solutions Group, Convergys

Kim Jones

Vice President, Academic and Research Computing Worldwide Field Operations, Sun Microsystems

Marcia Kuszmaul

Group Manager, Industry Relations, Microsoft Education Solutions Group, Microsoft Corporation

Richard Marriott

Chairman of the Board, Marriott

Debbie Maucieri

Vice President, Novell Education

John Morgridge

Chairman of the Board, Cisco Systems

Bob Moul

President, Global Education Solution, SCT

Tom Pelto, co-chair

Vice President of Law & Government Affairs, AT&T Corp.

Bill Pollock

Chairman, Drake International

Sean Rush

General Manager of Global Education Industry, IBM Corp.

Bob Russell

CEO, Thomson Lifelong Learning Group

Rick Shapiro

Managing Director of Government Affairs, Enron Corporation

Bess Stephens

President & Executive Director, Hewlett Packard Company Foundation

Jim Swartz

Founding Partner, Accel Partners

Karen Vauk

Academic Relations Manager, Micron Technology Inc., and Education Program Officer, Micron Technology Foundation

Tom Vander Ark

Executive Director, Education, Bill & Melinda Gates Foundation

George Vradenburg

Senior Vice President, AOL