e-ducation could be the quickest route to on-line profits. Learn from the pioneers.

By Sanjiv Rana

If ever there was an e-biz model guaranteed to make money for you, it is this one. Just set up a v-school on the Net, get students to log in, make them pay for their learning, et voila! Best of all, you don't need classrooms; you're not limited by geographical considerations; you don't need a high teacher-to-student ratio; it costs the same to teach a thousand students as one; and your target-audience maps to the universe of on-line customers beautifully since around 20 per cent of India's surfers are school- and college-goers while another 40 per cent are managers and professionals who are also looking to retrain themselves. What's more, it is on a learning-pun intended-curve that is already more mature than all other forms of e-commerce: long before entrepreneurs were dot.coming, universities, even in India, were dot.educating.

That's why those of India's e-businessmen who have got into the e-ducation business are, probably, on a shortcut to success-and profitability. Contends M.M. Pant, 52, the Director of the School of Computer & Information Sciences at the Indira Gandhi National Open University: ''An IMRB survey recently put the yearly figure for e-commerce in India at Rs 168 crore. I believe that 25 per cent of that is from e-ducation.''

In its basic form, on-line education involves giving access to databases in the form of text files or multimedia Webpages as well as the exchange of information via file-transfers. The absence of teacher support is met by combining tools like downloadable content, on-line assignments, e-mail, and chat. At a more advanced level, video-conferencing and streaming audio and video are used too. From computer education to literature, from management to legal education, there's no theme where on-line education cannot attract fee-paying students. Originally, on-line education was just catalogueware: while the courses and other details were listed on the Net, the teaching was still in real-world classrooms. Only with the Western Governors University in the US (which offers competency-based education) was the first virtual campus, with complete on-line teaching, set up.

Around the world, e-ducation is setting mouthwatering benchmarks. In the US, an estimated 750,000 students learn on-line from about 26,000 different educational courses piped to them over the Net. According to infotech market researchers IDC, there will be 2.2 million on-line students of one kind or another in the world by 2002, accounting for 5 per cent-or, $10 billion-of the $200 billion spent annually on higher education. The attractions are obvious.

So, while computer education firms like NIIT and Aptech have, expectedly, jumped on to the Net, every second new Website is in the e-ducation business. Even Indian portals have either tie-ups with on-line education service-providers-like Rediff.com has with Aptech-or have built some sort of education component into their sites. While ISPS like Dishnet's eth and Mantraonline have got into the act-with ETH planning to go big time into on-line education with an actual university degree, and Mantra going the information portal way-media companies like Zee TV have announced ambitious plans for e-ducation too.

Says R. Krishnan, 40, Senior Vice-President (On-line Services), Aptech, which is in the process of setting up an education portal soon: ''As you grow as an educational institution, the on-line medium gains more importance. In the next 3 years, we expect more than 50 per cent of our students to be in the on-line stream.'' Aptech's portal, for instance, will give information and access to its on-line courses besides having other features like a digital library and access to educational sites.

THE DEMAND

The motivation for all these players, obviously, comes from a society that values the linkage between education and career prospects. Add to that the rising demand for post-college education, especially in the management sciences and in professional fields like finance, accounting, and, of course, infotech, and the potential is, clearly, enormous. Adds S.K. Balakrishna, 29, Chief Guru, entranceguru.com: ''Don't forget that everything can be taught-from cooking to needlework, from the skill needed by an auto-mechanic to the expertise of a fashion-designer.''

To e-ducation-providers, this presents an established supply-driven market that will constantly regenerate itself. And it can be targeted at a fraction of the cost of setting up a brick-and-mortar institution. In the US, the cost of on-line education is upto 50 per cent lower than courses offered by real world counterparts. In India too, it will, eventually, be the same once the Net infrastructure delivers high bandwidth and reliable connectivity.

In the real world, you cannot build a classroom in every city in the country unless you're assured of a critical mass of students in every location. In the on-line version, the geographical location of the student is irrelevant. Today, as many as 155 of the 2,000 students enrolled in IGNOU's on-line are the sole representatives of the town they live in. Tomorrow, the scholar-base of other e-schools will demonstrate the same width in coverage-although they wouldn't have dreamt of setting up brick-and-mortar institutions to serve single students.

Says IGNOU's Pant: ''Once the initial cost of content development is met, the incremental costs in scaling up the numbers are not much. If the cost of infotech and communication is coming down, the cost of infotech-based education too has to come down.'' Agrees Nicholas George, 37, Head (Instructional Research & Design), NIIT: ''Since the cost of buildings and salaries is increasing, there will soon be a cross-over point where infotech-based education will be cheaper than traditional education.''

Indeed, the infrastructure to set up an e-ducation site is not expensive. Of course, to start with, the usual components of a Website will be needed: a server, bandwidth, and an operating system, which could be either Unix or Windows nt. Software programs with frameworks for creating personal learning plans, space for storing information, multimedia authoring tools, and timeline tools for tracking assignments can either be developed in-house, or bought off the shelf.

To provide interactivity, a host of tools are readily available in the software market, like Web ct or Lotus Notes. And both chat and group communication software can be picked up free of cost on the Net. Says Hemant Sharma, 30, Managing Director, Trisoft Design: ''While it is difficult to estimate the cost of setting up a site due to the number of components involved, a very basic educational portal, not actually into education-delivery, could be developed for as low as Rs 5 lakh. But designing the architecture for a site into actual delivery of education could vary between Rs 10 and Rs 25 lakh, depending upon the features you decide to include.''

Add to that the dedicated server for hosting your site (ranging between Rs 5 and Rs 15 lakh), and you could have your e-school up and running for as low as Rs 15 lakh. of course, that's presuming that you already have developed the content that is available with you. But still, the costs are far lower than those of a brick-and-mortar institute. What's more, e-schools can add student capacity at little incremental costs, unlike the real-world version.

As a result of lower costs, e-ducation companies can keep their prices down too-and still make better profits. For instance, Aptech aims at keeping the fee for an on-line course 20 per cent lower than the equivalent real-world course. Although IGNOU's on-line courses are, at present, being offered at a premium, these prices will be lowered soon. And, like all information products, the costs are limited to development, with incremental cost per additional unit being zero. Once the critical mass of students is reached, therefore, additional revenues equal additional profits.

THE SUPPLY

Of course, content and customisation are the real differentiators. Some pure e-ducation service-providers aiming at individuals as well as corporate clients have been quick to figure that out. Take NIIT, which started early by setting up NIIT Netvarsity in 1996. After jumping into complete on-line training, NIIT quickly realised that the attention span on the Net is normally short. There are also problems of low bandwidth and unpredictable access quality. Says niitNetvarsity's George: ''We soon realised that a hybrid between the traditional system and a fully on-line system worked better. This is pure brick-and-portal strategy.''

The Tech Edge at NIIT now consists of a combination of some classroom instruction alongwith on-line elements such as e-mail (queries and assignments), tutorials (chat), quizzes, and library facilities. Fully on-line training is available in the form of short modules, called skillettes, for specific skills. These can be served up to individuals, or even small teams of the larger group being trained. NIIT will be looking more at fees for revenue as the emphasis is on catering to larger numbers. Adds Rema Subramanian, 38, Deputy General Manager, Zee Interactive Learning Systems, which plans to offer training for companies as well as certification courses: ''We plan to supplement a part of the course (the static content) through off-line media to offset the cost of access. Zee Interactive also plans to use intranet setups in case it is available in some communities to overcome access-related problems.''

Newer e-ducation Websites, which don't have the numbers to start off with, are taking another tack. These sites are driven by information, community, and focus. For instance, sites such as shiksha. com, indiaedu. com, and findcollege.com provide information on e-ducation. Advertisements and direct marketing will be the 2 main sources of revenue. But for sites offering courses, focus and customisation is the key. Sites like egurucool.com, which plans to target students preparing for admission to medical, engineering, and management institutes, are offering their content free. So is entranceguru.com, the e-school whose focus is sharper-it targets students aiming for only the premier management institutes.

''The revenue aspect will come in once the traffic grows. We will broadly be looking at a mix of paid services & direct marketing opportunities,'' says Balakrishna. Clearly, the focus here is on building regular traffic to the site by setting up general-interest content, and drawing more students in by offering customised versions such as a special package for a person weak in mathematics, or a higher-grade programme for a student whose language skills are above average.

For the moment, there's lots of work to be done on the content side. That's where some firms are making a killing at the supply-end. A classic example: ILFS' schoolnetindia.com, which, apart from offering on-line courses, offers modules to train teachers. The site invites schools to set up Webpages, and is targeting the entire on-line requirements for a particular school, from providing software to content. Say Ajaya Singh, 35, and Noel N. O'Connor, 50, Partners, The Technology Mission, a firm that develops multimedia curriculum for schools: ''Everyone seems to be focusing on the delivery vehicle rather than on the content. You have these sites with big plans in on-line education, but where is the content? When you are actually on-line, the crunch comes down to the kind of content you are able to deliver.''

There are plenty of other opportunities in the educational space, especially in the form of intermediation as pricing becomes flexible even for established educational institutions. Take the case of ecollegebid.org, which accepts bids from prospective students for payments for college courses in the US, and then tries to locate schools that will accept students at those prices. Similarly, there are e-biz ventures-like study24-7. com and versity.com-that pay students to post notes from university courses on their sites, and offer access to students free of charge.

Sure, e-ducation won't replace its real-life predecessor entirely. Warns Ramu Rai, 40, Director, KPMG: ''On-line education in the US is not as popular as optimists had initially expected it to be. A major hitch is that it misses out on classroom interaction and the traditional usage.'' But its sheer economic edge, coupled with the ease-of-delivery of educational material over the Net, will keep it booming. That's e-biz 101 for you.

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