Houghton Mifflin sells Sunburst Technology to investment firm

Thayer Capital Partners, a Washington, D.C.-based private equity investment firm, has acquired Sunburst Technology, a division of Houghton Mifflin Co. and a leading supplier of software to schools in the United States and Canada.

Sunburst develops and sells educational software for the K-8 market, including such well-known brands as Tenth Planet, HyperStudio, and Type to Learn. The company’s software division is one of three branches; the other two are educational reseller Educational Resources and Sunburst Health and Guidance, which produces videos and printed supplements for educators.

“With the growth in education spending at all levels of government and the greater emphasis on technology in the classroom, we see this as an excellent business opportunity, buying top brands in a very stable industry with strong growth prospects,” said Chris Temple, managing director for Thayer Capital Partners. Jim McVety, a senior analyst for educational market research firm Eduventures Inc., called the move “an interesting transaction” for all parties involved.

Although Houghton said it made the move to get back to its core business, McVety said the company’s decision was puzzling. He said it’s not clear why the publishing giant would choose to divest a highly profitable company with proven experience in such critical areas as reading, math, health, and science.

McVety attributed the sale to Houghton’s own impending sale. Last month, eSchool News reported that French media conglomerate Vivendi Universal—which owns Houghton Mifflin—was looking to unload the company in an effort to shed expenses.

In light of its pending sale, McVety said the publisher probably is looking for ways to secure its own place in the market. “Houghton is struggling to define its future,” he said, adding that the move proves Houghton wants to concentrate its efforts on publishing and assessment.

Thayer, which McVety said has been shopping for a stake in the education market since the mid-90s, finally found a viable entry point in Sunburst. “This is a bold, intelligent step for Thayer,” McVety said. According to him, the company is strong, profitable, and has a good sales model.

McVety said Thayer was “intrigued” by the deal because it gives the firm—which traditionally has been focused on manufacturing businesses—access to “a positive growth market.”

Though executives at Thayer said they are excited about the opportunity to grow the business, there is some question as to whether an investment firm with no prior experience can succeed in an admittedly complex education marketplace.

McVety said Thayer has tried to safeguard itself against such uncertainties by bringing in corporate managers who have proven track records and are considered experts in the field. Sunburst’s new Chief Executive Officer John Crowley, for instance, is former president of Educational Resources. Thayer will use long-time veteran Crowley not only to grow its investment, but also to deflect claims of inexperience and reassure customers that Sunburst’s services are in confident hands, McVety said.

“I think the team is falling in line quickly,” he said. “But the market will need some time to adjust to this.”

McVety said it’s “much too soon yet” to speculate about what this sale might mean for Sunburst’s school customers in the long term. But the first 100 days of the venture should be an indicator of future success, he said.


Special Report: Linux & Learning

To hear the Linux proponents tell it, it’s a classic story: the little guy versus the big guy, David versus Goliath. All that is good and free and open versus the evil corporate overlord.

You could even say it’s the story of the founding of America itself . . .

But that might be going too far. Maybe it’s the battle of the network stars—or, rather, one star and one up-and-comer.

In this corner, the champ, Microsoft. Huge, powerful, predominant on the desktop. The maker of Windows—such an essential part of our computer that, for a long time, most of us really couldn’t tell the difference.

In the other corner, Linux. The open-source software symbolized by Tux the Penguin, created by a community of developers and long heralded by this small, vocal minority as the operating system of choice. For years, “techno-geeks”—the kind who would describe Linux as “a completely free reimplementation of the POSIX specification, with SYSV and BSD extensions”—have sung the praises of this community-developed, open-source operating system.

It’s clear that Microsoft isn’t going anywhere. But Linux quietly has been making inroads at some of the nation’s top corporations—Amazon.com and the film company DreamWorks, to name just two.

In schools, you might have stolen a glimpse of some Linux-based file servers in the back office—or, rarely, a desktop workstation that’s flying anything but Windows or Macintosh.

That might all be changing. Linux is finding a core of enthusiastic fans in K-12 education. The operating system and its applications, they say, are stable, flexible, and—best of all—free.

Schools across the country are finding that Linux can help reduce their total cost of ownership (TCO) in a number of ways. Tightening budget constraints mean schools must capitalize on their existing infrastructure. Linux can run on a processor as slow as a 386. Remember those?

In this month’s Special Report, we’ll hear from those who are certain your schools can save money by migrating to a Linux environment. No way, you say? Read on.

What is Linux?

Linux, the brainchild of Finland’s Linus Torvalds, is basically a clone of the UNIX operating system developed by Bell Laboratories in the early 1970s. Instead of being owned by any one company, however, like a proprietary operating system, Linux was developed by a community of programmers who freely share their work.

Torvalds holds the copyright to the kernel that runs Linux. But it’s freely distributed under the GNU General Public License (GPL). Linux and its applications are considered “open source,” which means the code is freely available to programmers who want to develop their own applications. The nonprofit Open Source Initiative (OSI) issues a certification standard that indicates that the source code of a computer program is made available free of charge to the general public. The idea is to encourage developers to create more useful and “bug-free” products for everyone to use.

Bugs in the program code are identified and eliminated by a peer review process. Proponents of open-source software say this process is faster and more efficient, because problems are identified by users who can quickly come up with solutions, rather than through a corporation’s often sluggish research and development channels.

Microsoft and other developers also have been accused of debugging their software—including Windows—by heavily marketing early beta versions to customers and tweaking the program as complaints came in.

The “updated” Windows would appear—debugged, but often requiring bigger machines to run it. This, some say, means customers are being charged on several fronts for the debugging process.

The open-source movement actually began with GNU, a UNIX-compatible software system that grew out of a project led by Richard Stallman at the Massachusetts Institute of Technology in the mid-80s. Developers took the kernel for Linux created by Torvalds in the early 1990s and began adding pieces of GNU—a recursive acronym for “GNU’s Not UNIX”—to it. The resulting operating system, widely known as “Linux,” actually consists of the Linux kernel plus GNU software.

A Linux distribution is a combination of Linux with sets of utilities and applications to form a complete operating system. Distributions are how companies make money from Linux. According to the Linux Online web site, it’s a multi-million dollar business.

Red Hat, SuSE, The SCO Group (formerly known as Caldera), MandrakeSoft, and others all sell boxed versions of Linux. These usually come packaged with applications such as a word processing program, eMail software, and a web browser.

There are also distributions that will give you a firewall, boot your computer from a floppy disk or CD-ROM, or power TV “set-top” boxes.

While there are some differences between distributions, or “flavors,” of Linux, most—if not all—applications developed for Linux will run on all certified versions of the operating system.

Standards for Linux are developed and applied by the Free Standards Group, an independent, nonprofit organization. An LSB Certification means that a Linux distribution or Linux-based application adheres to the community-developed standard. The Red Hat, SuSE, SCO Group, and MandrakeSoft distributions of Linux, for example, are all LSB Certified. (A complete list of LSB Certified products can be found at http://www.opengroup.org/lsb/cert/cert_prodlist.tpl.)

From the geek set to the mainstream

The market share for Linux is growing in all categories, analysts say. It’s particularly strong in the server market, where it’s competing against Microsoft to see who will take over UNIX’s lead.

According to market research firm International Data Corp. (IDC), last year the number of servers sold with Linux as the operating system grew 18 percent, while those sold with Windows grew only 3 percent. UNIX is losing market share, down 7 percent.

IDC predicts that by 2006, Linux and Windows will have whittled away UNIX’s share to 12 percent of servers in operation. It forecasts that one-quarter of servers in operation will be running Linux and just over half will be running Windows.

Major companies like Amazon.com and DreamWorks, the filmmaking company, have embraced Linux. Amazon is expected to post its first profits next year, after a major overhaul of its servers to a Linux-based environment.

DreamWorks is touting Linux’s speed with animation programs and, more importantly, how cheaply its employees can now work from home. Anyone, the thinking goes, can afford a machine running Linux.

In fact, anyone with $200 can have a fully-functioning PC running on Linux. In a move that perhaps is the best indication of how Linux has graduated from the geek set to the mainstream, giant retail discounter Wal-Mart has begun offering its own Linux-based computer.

Instead of Windows, the new Wal-Mart computers come loaded with Lindows, a hybrid Linux operating system from the San Diego-based company of the same name. Lindows says its software supports many, but not all, of Microsoft’s programs—including Office 2000 applications.

The Wal-Mart computers, with hardware from Microtel, start at only $199 for 128 megabytes of RAM and a 10-gigabyte hard drive. (A monitor and speakers are extra.)

Although Linux is rapidly establishing itself as a server platform, it’s a different story on the desktop, where Windows sits on 95 percent of all new computers sold last year, according to IDC. Apple’s Macintosh OS accounted for 2.4 percent, and Linux, just 0.5 percent.

This, too, might change, thanks to initiatives like Wal-Mart’s and that of Sun Microsystems. In September, Sun announced plans to release a new line of low-cost computers powered by Linux and other open-source software beginning next year.

Sun’s new desktops will use Intel processors and the Linux OS rather than Sun’s own chips and its Solaris operating system. Further details weren’t available, but it’s expected that Sun will market these new machines heavily to K-12 schools.

Although it’s unclear how many K-12 schools now use some form of Linux, anecdotal evidence suggests this number is growing. In fact, schools make the perfect market for Linux-based systems, for several reasons: Many schools can’t afford Microsoft’s costly per-seat licensing fees; the operating system and its applications are free and run on old computers; Linux workstations are cheaper and—some say—easier to maintain; and several initiatives recently have been launched to help make Linux even easier for schools.

Taking license

Microsoft might unintentionally have helped schools see the financial liability of using licensed software when it began to demand software audits last year. …

To read more, click here to view enitre story.


USDA probes $15 billion benchmark

Concerned that too many students might be getting free or reduced-price lunches, the U.S. Department of Agriculture (USDA) is considering changing the reporting and record-keeping requirements of the National School Lunch Program (NSLP).

Such a move could have ramifications far beyond school cafeterias, however, because lunch status determines eligibility for a wide array of federal programs. Changes—especially more stringent procedures—could undermine access to more than $15 billion in federal education funding, including billions earmarked specifically for school technology.

Over the years, federal officials acknowledge, lunch status has become the benchmark for programs having little or nothing to do with nutrition. “This issue is complicated, because certification data [are] used to distribute billions of dollars in education aid, telecommunications funds, and other funding,” Eric M. Bost, Undersecretary of Food and Nutrition Service (FNS), testified March 20 before the Senate Subcommittee on Agriculture, Rural Development, and Related Agencies.

Now, some federal officials say evidence exists suggesting too many students receive subsidized lunches. The USDA’s Office of Inspector General reportedly found that in one state—which the agency did not name—nearly 20 percent of free or reduced-price meal applications selected for verification couldn’t be verified.

Also, data from the U.S. Census Bureau’s Current Population Survey suggests that fewer children are eligible for NSLP than are registered, USDA officials said.

In response, the FNS division of the USDA—the federal agency that oversees the program—has embarked upon a series of corrective steps.

In its most recent action, FNS has proposed changing the way school districts verify which students should receive free or reduced-price meals.

Currently, school districts send forms home for parents to fill out. School officials then approve or deny the applications based on income and other factors reported on the form. Next, school officials must verify a small sample of those applications by contacting parents and requestingquesting copies of income tax statements or similar documents to keep on file.

FNS proposes that school districts be required to report their verification information to state authorities by March 1 each year. To facilitate this reporting, FNS would provide an electronic “data collection instrument” to report the data.

School districts would have to report:

  • The number of children approved for free and reduced-price meal benefits based on direct certification, income applications, and categorically eligible applications;

  • The method of verification sample selection;

  • The number of applications selected for verification;

  • The number of students on selected applications;

  • The number of students approved for free-meal benefits and reduced-price meal benefits whose eligibility for benefits were reduced or terminated as the result of verification;

  • The number of non-respondents; and

  • The number of students reinstated for free or reduced-price meal benefits, as of Feb. 15 of each year.

The state would have to report to FNS by April 15 each year.

In addition to this proposed rule-making, the agency is working to make local and state school officials understand the magnitude of the certification problem so they can be more proactive in solving it.

Educators who spoke with eSchool News said using the free and reduced-price meal criteria to determine educational technology funding is flawed.

“I applaud the USDA for trying to run a tighter ship, but I think the larger problem is with tying eRate funding levels only to free [and] reduced counts. There really should be a multidimensional analysis of a district’s need,” said Charlie Reisinger, director of technology for the Penn Manor School District in Pennsylvania.

Some educators say the real problem is under-reporting, not over-reporting, eligibility. They are skeptical whether the changes suggested by FNS really will improve the reporting process.

Nancy Lotze, technology and curriculum director for the Selkirk School District in Washington, said many parents in her district qualify for the NSLP but choose not to apply because they are too proud to ask for what they perceive as “hand-outs.”

“Our issue is how to get parents to see the connection between access to federal programs and money and a service they are eligible for,” Lotze said. “Under-reporting affects our eRate discount as well as eligibility and funding levels for other federal programs. It is unfortunate that the level we report doesn’t consider the pride that many working families have in areas such as ours.”

Robert Hudson, technology director for the Hawthorn Elementary District 73 in Illinois, finds that older students tend to attach a stigma to the school lunch program.

“As a result, some parents of the older students do not apply for free and reduced-price lunches. This has had an impact on our ability to secure the appropriate eRate funding reimbursement level,” Hudson said. “The proposed changes still require application by parents. Therefore, this problem will likely still exist.”


Proposed Rules for Free and Reduced-Price Meals


“Justice Learning” gives students a first-hand look at democracy in action

The New York Times and National Public Radio have joined forces to create Justice Learning, a civics education web site for high school students and teachers based on NPR’s radio program, “Justice Talking.” The web site uses audio content from “Justice Talking” and related lesson plans and articles from The New York Times Learning Network, a free service for teachers, parents, and students in grades three to 12, to engage students in informed political discourse. Justice Learning is designed around eight distinct civics issues, each updated twice a year. Current issues include affirmative action, civil liberties, the death penalty, gun control, juvenile justice, and web censorship. The project “brings news issues to life for its audience,” says Gary Kalman, communications director of “Justice Talking.” Through articles, editorials, and oral debate from some of the nation’s leading journalists, Justice Learning challenges students to think about the often-conflicting values of America, while learning how each of democracy’s institutions—Congress, the courts, the presidency, the press, and schools—shapes and impacts the issues of our times.


Launch a space shuttle design project with “SpaceDay.com”

In preparation for Space Day 2003—to be celebrated May 1—this web site is meant to inspire a new generation of aviators and scientific explorers. The site contains a wealth of interactive tools, including online lessons about the many mysteries and achievements of space travel. Students can learn what it takes for astronauts to live and work in space. Or, they can explore the history of flight, participate in space-related trivia games, and solve brainteasers. Another section lets kids use the internet to communicate and collaborate with peers from across the globe as they compete to design model airplanes and spacecraft. Educators, too, will find the site useful. A comprehensive teacher’s section provides a number of lesson plans about space science education and includes ideas for helping students join in the celebration with special activities. Geared toward students in grades four through eight, the site uses several space-age speech and sound effects to hold students’ interest. Organizers of the event, which is chaired by former astronaut and senator John Glenn, say Space Day programs seek to advance science, math, technology, and engineering education and to inspire young people to realize the vision of our space pioneers.


“eCYBERMISSION” challenges students to be all they can be

With this new contest sponsored by the United States Army, seventh and eighth grade students are encouraged to work together, using science, math, and technology to help solve real-world problems within their communities. Students who wish to compete first must select a “Mission Challenge.” Challenges are left to the discretion of students, as long as the proposed projects focus on one of four themes—arts and entertainment, health and safety, sports and recreation, or the environment—and benefit some aspect of the community in which they live. Once students have chosen a theme, they must put their project into motion. Students are encouraged to collaborate using discussion forums, bulletin boards, and monitored chat sessions through the eCYBERMISSION web site. Challenges will be graded by judges based on a number of criteria, including the use of science, math, and technology; innovation, originality, and creativity; benefit to the community; and teamwork. Any students who submit projects for review will receive a free t-shirt and certificate of commendation. Winners will be eligible for a number of prizes, including savings bonds, plaques, medals, media interviews, and more. Students who wish to compete in the program must submit applications by Nov. 30.


Protect your network—and your students—with NetDay’s “Cyber Security Kit”

While computer security experts and public policy makers debate the merits of a White House panel’s proposed national cyber security plan, the nonprofit group NetDay has developed and released its own Cyber Security Kit for Schools. The online kit is designed to create awareness among K-12 educators, administrators, parents, and other stakeholders about many of the dangers that lurk online. The site contains a guide called “What Every Administrator Needs to Know About Cyber Security.” The online guide includes practical suggestions and resources for ensuring that school computers are safe against online attacks. Another feature, “Computer-Savvy Families: A Story about Cyber Security for Children,” includes a narrative written by a fourth-grade teacher, which stresses the danger of online predators to children. Other resources include links to news, articles, and editorials addressing the delicate balance that exists between network security and internet freedom; an “action plan” for securing desktop computers from intrusion; and a list of cyber security and online safety web sites.


Bone up on the latest reading research with “The Partnership for Reading”

From the National Institute for Literacy, the National Institute of Child Health and Human Development, and the U.S. Department of Education comes The Partnership for Reading, a collaborative effort intended to provide educators with the findings of evidence-based reading research. Educators, parents, and other stakeholders can use this site as a point of reference to research key approaches such as phonics, fluency, vocabulary comprehension, and phonemic awareness. Other resources include suggestions for how to integrate technology into the reading curriculum, as well as links to continuing teacher education. For background, educators have access to the partnership’s criteria for improved reading instruction, including its definition of reading, its research stipulations, and its main principles. The site also provides access to a massive database of reading research materials separated by subject and skill emphasized, as well as recommended resources for continued research and frequently asked questions. The partnership also plans to add an online discussion forum for educators; however, this phase is still under construction.


Model exemplary teaching practices with the “Digital Edge Learning Interchange”

In August 2001, eSchool News reported that the National Board for Professional Teaching Standards, the International Society for Technology in Education, and Apple Computer—with funding from the AT&T Foundation—had launched a project to create an online library of videos showcasing best practices for teaching with technology. Based on two sets of nationally recognized standards, the videos are intended to help both current and aspiring teachers use technology in the classroom more effectively. Now, the fruits of this labor are ready for schools’ consumption. Teachers can turn to this site for access to online “exhibits” submitted by National Board Certified Teachers who have participated in the program. Each free exhibit contains a number of professional development resources and suggestions for teachers, including lesson plans, video clips, examples of student work, assessment tools, and teacher-student reflections, enabling teachers to learn from the best as they strive to integrate technology into their own curricula.


Cheryl Vedoe leaves Apple for Apex Learning

Cheryl Vedoe, the former head of Apple Computer’s Power School unit, has left the company to become chief executive officer for Apex Learning, a provider of online courses and instructional materials for high school students.

In an interview with eSchool News, Vedoe said she was enthusiastic about her role at Apex and was looking forward to leading the rapidly growing company to new heights in the ed-tech marketplace.

“Education has really only scratched the surface as far as the potential that is out there with technology,” she said. “I think there is a tremendous opportunity for educational technology to have an influential effect on student outcomes.”

Vedoe said she hopes to improve upon those outcomes by building on the products and services that have been—and continue to be—key to Apex’s business model. Among these services are ClassTools, a combination of online lessons, exercises, and activities to help strengthen educators’ teaching portfolios; Evaluation Tools, which give teachers the means to assess student progress in a given topic by way of computer assessments; and a growing library of online advanced-placement courses, which Vedoe says gives students with limited course diversification a whole new avenue for exploring their educations.

Still getting comfortable in her new role at Apex, Vedoe said she would prefer to focus on familiarizing herself with the company at present before commenting on her goals and visions for its future.

While looking forward to her new role at Apex, Vedoe refused to comment on her reasons for leaving Apple or the current state of the company’s PowerSchool operations. In September, Think Secret, an online news source for inside information at Apple, reported that the company was displeased with the Enterprise version of its PowerSchool student information system and was reevaluating its plans.

A 25-year veteran of the education and technology industries, Vedoe had been Apple’s vice president of education marketing until June, when she was shifted over to the company’s PowerSchool division. An Apple spokesman declined to comment on her departure.