University Teaching as E-Business?
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Case Study: NextEd

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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.

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.

Products/Services

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, SCMP.com 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 (http://www.nexted.com/shell/s_nds.html) and the enabling applications of the NextEd Learning System (http://www.nexted.com/shell/s_nls.html) 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.

Governance/Management

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.

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.

Finance/Strategy

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, SCMP.com and Whitney & Co. Private investors are listed in Table 3.

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.

References

• "Australia: Dot Points." NextEd article (Reuters Business Briefing / The Australian, page 40), 3 May 2000. http://www.nexted.com/news/articles/DotPoints-030500.html
  
• Carr, Sarah. "Online High-School Programs Plan to Market Courses Internationally." The Chronicle of Higher Education, 5 May 2000. http://chronicle.com/weekly/v46/i35/35a04902.htm
  
• Carr, Sarah. "Virtual high-school programs begin looking for students overseas." The Chronicle of Higher Education, 12 April 2000. http://chronicle.com/free/2000/04/2000041201u.htm
  
• "E-Commerce, E-Learning, and E-Services" From Ready2Net: What’s Real - What’s Not & What Really Matters to Higher Education in the Internet Age (A Free Series of National Satellite Broadcast and Webcast Programs). California State University, Monterey Bay, 5 April 2001. http://csumb.edu/ready2net/webcast/archives/p3/index.html
  
• Foreshew, Jennifer. "Unis' Asia education alliance." NextEd article (The Australian - IT Supplement, page 37), 20 June 2000. http://www.nexted.com/news/Articles/australian_asiaedalliance_20060
  
• Gluyas, Richard. "Gates fantasy a reality in China." NextEd article (reproduced with permission of The Australian), 18 September 2000. http://www.nexted.com/news/articles/australian_Gates.html
  
• Johnstone, Bob. "Ivory Servers." NextEd article (reproduced with permission of Forbes Global), 12 November 2000. http://www.nexted.com/news/Articles/forbes.html
  
• Lorenzo, George. "NextEd's Terry Hilsberg: Providing Infrastructure for Learning Centers." World Higher Education Reporter, 3 September 2001.
  
• Maslen, Geoffrey. "9 Universities Collaborate on Online Instruction in Asia." The Chronicle of Higher Education, 16 June 2000. http://chronicle.com/free/2000/06/2000061601u.htm
  
• Maslen, Geoff. "RMIT signs up for the 'e-education' push." NextEd article (Campus Review, Australia), 21-27 June 2000. http://www.nexted.com/news/Articles/camprev.html
  
• Schneider, Mica. "Can NextEd.com move to the front of the online class?" (News Flash). Business Week Online, 5 April 2000. http://www.businessweek.com/bwdaily/dnflash/apr2000/nf00405e.htm