Educativo.com — The education software industry has been losing billions of dollars each year to competitors like Google and Microsoft.
The company that controls the biggest slice of education software revenue, Pearson, recently reported it is closing the $2 billion in cash and stock that it has left.
Education software companies like Education Software International and Pearson have had to contend with a series of changes in the education software market.
These include the rapid growth of the digital learning market, the emergence of virtual and augmented learning technologies, and the arrival of more and more high-quality content in the marketplace.
Pearson announced its first-quarter results on Monday.
Education Software President and CEO Robert L. Stelzer said in a conference call with analysts on Tuesday that Pearson’s digital learning business is in a strong position, and that Pearson is making “significant investments” to build a strong portfolio of technology and content assets.
“The opportunities that are there in the digital education space are vast,” Stelzner said.
“I’m confident that we will continue to be a very successful company.”
Stelzman said that Pearson has recently expanded its product portfolio to include software and services for online and offline learning.
He said that the company has “done significant business” in a number of areas, including virtual reality, augmented reality, and learning apps for children and adults.
Pearson also has an “innovative product portfolio,” Steszer said.
But Pearson’s revenue was down from $838 million in the third quarter of 2016, which was the company’s second-lowest quarter in more than two decades.
In the same period, the company reported a net loss of $1.9 billion.
Stelman also said that while the education company had an “enthusiastic” customer base, the digital world has changed dramatically.
“Our customers are increasingly coming from online learning, social media, and video,” Stelsman said.
And he said that more and the more they learn and interact with digital products, they will become more likely to take the time to learn more about and use the educational software products.
“If we don’t make the investment in those products, our business will be impacted in some way,” he said.
Education Systems CEO Andrew Littman also noted that Pearson had been “overly focused” on building its digital learning platform.
He noted that in 2017, the Education Systems company reported revenue of $3.1 billion, down from a record $4.2 billion for the same quarter in 2016.
But Littmerson said that he expects the company to make “significant” investments in the next two years.
He cited the company expanding its curriculum offerings and improving its learning apps and online learning platforms, and adding more products to its portfolio.
Education Sales and Marketing President and Chief Executive Officer Greg Cogman said in the conference call that he thinks Pearson’s growth in education software was the result of the company embracing technology.
“When we went from one of the lowest revenues per dollar of revenue in history to a record-setting $4 billion in revenue in 2017 and continued to grow our portfolio, that was a significant shift in our approach,” Cogmen said.
He added that Pearson did not have a traditional product or service portfolio, but it has an amazing portfolio of high-performing, high-value products.
He also said Pearson is now “very focused” in making investments in technology and digital content.
“We have made significant investments in our technology and we have made a significant investment in our digital content, but that’s not what we’re focused on,” Cokman said, pointing to the company working to “build a stronger portfolio.”
The company will continue making investments and is “making investments” in both education and its content, he added.
Education Technologies Chief Executive and President Joe Lefebvre said that it is “disheartening” that Pearson continues to lose money.
“What Pearson is seeing is that it’s losing money,” Lefemvre said.
Pearson’s stock price has fallen significantly since it began making its first round of investment in Education Systems in 2016, but the company is not losing money, Lefegvre said in his conference call.
“They’ve made significant capital investments and they’ve made investments in both digital and physical learning.
The money they’ve invested in education is going to be used in education.”
Education Software also has struggled to compete with Google, Microsoft, and other digital education companies.
But Education Software CEO Andrew Hirschfeld said that Education Systems will continue working hard to compete in the future with Google and other tech companies that are developing content and services that are better suited to students and schools.
“These are some of the very best companies in the world, they have a very strong product portfolio, and they’re not going anywhere,” he told Fox News.
Education Technology CEO Steve Hahn said that with more content