Steve Jobs's New Lesson Plan

Apple's CEO could be quietly preparing a revitalized strategy aimed at schools and universities, the company's biggest market

By Charles Haddad

There's no more effective way to win sympathy than a humbling confession -- especially if it comes from someone not known for humility. In this case, that someone is Apple Chief Exec Steve Jobs. He has repeatedly accepted blame for letting Apple slip out of first place as a computer supplier for schools, explaining that the company bungled a reorganization of its educational sales force late last year.

The issue now: What's Jobs going to do about it? Schools and colleges, which account for 40% of the company's sales, are a market Apple absolutely must dominate. Both students and teachers value most what Apple does best: design smart-looking computers that are easy to use and incorporate the hottest new technology.

So far, Jobs hasn't said much, other than to promise that Apple will redouble its efforts to win back the lead in educational sales. But recently, he has made series of unrelated moves that I'm reading like a scout following a faint trail of footprints through the forest.


  What I see ahead is a big strategic thrust that will again move Apple ahead of the curve in the educational market -- a plan that repositions the company as the gatekeeper in an increasingly wired educational community. Macs will become the portals in a larger Apple network that provides schools with everything from Internet access to the management of student records.

But to understand where Apple is going in education we have to understand where it has been. The company invented the school market almost 20 years ago. Its sales people taught educators not to fear computers but to embrace them. Schools paid for that lesson by buying millions of Macs and becoming Apple's largest single market.

Eventually, the education market became so lucrative that in the mid-1990s, PC makers took notice. Dell in particular began courting educators, seducing them with inexpensive machines. By 1999, Dell had captured 21.4% of the market compared to Apple's 16.5%. Apple remains a major player in schools, but much of its equipment is old, signaling that educators are ambivalent about upgrading and are thinking of jumping ship.


  Now, back to the tracks Jobs has been making lately. The first is the company's registration of as a new domain on the Web. To me, that signals Jobs is following the same path he did with iTools, a company site that offers Mac users such Web-based services as storing files and sending greeting cards and e-mail. Is Jobs now thinking about developing a similar set of Web-driven applications for schools?

The CEO signaled the answer is yes with his next move. Two weeks ago, Apple announced it would pay $62 million for PowerSchool, one of the leading makers of Web-based school-management software. PowerSchool's programs are already used by 2,000 schools nationwide to automate such everyday tasks as grading, attendance, and meal planning. Schools also use the software to create and post newsletters and limit and monitor Internet access. PowerSchool can be accessed by any browser, but it runs only on a Mac server. A Windows NT/2000 version was under development. How much do you want to bet that project is now dead?

Here's the final sign I gleaned from studying Jobs's footprints. For the first time, he'll deliver the keynote speech at the 22nd annual National Educational Computing Conference in Chicago on June 25. The theme this year: developments in classroom-computing technology. Tens of thousands of teachers and administrators are expected to attend. Jobs couldn't ask for a better platform to kick off a new education strategy.


  So, let's put it all together. Apple registers a catchy new domain called ischool. It uses that name to brand a collection of sites embedded with powerful, already-popular educational software by PowerSchool. Then Jobs announces the new ischool initiative before thousands of educators struggling to figure out how to use computers, networks, and the Internet to run schools better.

The last piece of this puzzle is OS X, Apple's new operating system. Based on Unix, OS X has supercharged Internet and networking capabilities. It could be the thread that ties together all the other pieces of Jobs's plan. Sounds like a winner to me.

Haddad, Atlanta-based correspondent for BusinessWeek, is a long-time Apple Computer buff. Follow his weekly Byte of the Apple column, only on BW Online

Edited by Thane Peterson

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