06/07/2013 10:51 am ET Updated Aug 07, 2013

Cloud Universities and the Democratization of Higher Ed

I am a proponent of access, especially to education. MOCC, short for "massive open online course" offers education to those who might not otherwise have a chance and I am all for it.

According to Educause, a company leading the IT industry in Higher Education, "MOOC is a model for delivering learning content online to virtually any person -- and as many of them -- who wants to take the course. Course activities can be scheduled or asynchronous, and a fluid structure is valuable because students can choose their level of participation and many will do so in an à la carte manner. A MOOC throws open the doors of a course and invites anyone to enter, resulting in a new learning dynamic."

Had MOCCs been available in my youth; I might have taken advantage of their free benefits.

My biological father is an alcoholic Cuban refugee and my birth mother is schizophrenic. I endured forty foster homes, three group homes and eventually the death of adopted parents, all before my fifteenth birthday. My education was haphazard.

I spent little time thinking of secondary education. I was too busy trying to survive.
I was later adopted, as an adult, and my new mother helped me to go back to school. I became wildly and passionately involved in my college. My story is rare. Most who walked a minute in my shoes will never see the inside of a college classroom.


We live in a nation that boasts about its democracy. We even push the idea on other countries that don't want it. Yet we have not democratized our higher education system, so only a select few go on past high school. This had become the American way until MOOCs came along. MOOCs offer top-notch service to anyone who has access to a computer. MOOCs could easily democratize education worldwide. If colleges and universities don't incorporate it into their business models, they will ultimately fail. Though MOOCs have important implications, there are still more questions than answers about it now.

According to the Associated Press, "Millions of people worldwide have signed up for these massive, open online courses -- known as MOOCs. Their key features include short videos and interactive quizzes that provide instant feedback. Some educators worry that colleges and universities are rushing to adopt such technology without considering concerns about quality and impact."

Love it, hate it, admire it or fear it, MOOCs are here to stay. Quality measures aside, it will not be long before students who complete a MOOC begin to demand college credit for it.

Colleges and universities have reason to be afraid. The rising cost of a college education is the greatest issue in Higher Education today, and MOOCs are still free, funded by billionaire giants like Bill Gates. The purpose of a liberal arts education is to create free thinkers. Past generations who attended Liberal Arts colleges and universities went on to own businesses, be professionals and leaders. Now those who graduate become waiters. Times have changed, but rising tuition has not. At this rate, colleges and universities are going to price themselves out of the market.

Recent months have brought a plethora of news about MOOCs. MIT, Harvard, Stanford and Berkeley have announced that they are working together on such courses. Some in Higher Education are less excited than others. One survey suggests a wide disparity in opinion between faculty and administrators, with faculty expressing fear, and administrators having enthusiasm for the new technology.

This is not the first time technology has changed giant corporations. For example, Kodak knew as early as 1981 that digital imaging was being developed by SONY, and reacted by investing some $5 billion in research and development to learn what that had to offer over its established film technology. Five CEO's and thirty years later, Kodak filed for bankruptcy because it was completely unable to adapt.

Another example is the case of LaserJet printing and Inkjet printing. Xerox had been the leader in LaserJet printing, but could not adapt to the Inkjet technology. By contrast, HP experimented with the latter, and made a bonanza out of the process. The writing is on the wall. Colleges and Universities are not immune to the changing economic environment, and MOOCs are speeding along the process.

Prof. Clayton Christensen identified the issue as early as 1995 by asking why major corporations failed to grasp the significance of new entrants and new technologies, such as Easy Jet in airlines, Netflix in the video industry and the Japanese entry into the luxury car market. Christensen's answer was that the traditional firms' very success with established customers inoculated them against perceiving the threat and responding appropriately. That question is worth asking with regard to colleges and universities: What will be the impact of a half-new, half-old technology on the industry known as Higher Education, and their old physical infrastructures that exist now?

Salman Kahn, a Bengali American educator, entrepreneur, and former hedge fund analyst states that when he began teaching math to his cousins in India, they told him flat out that they preferred the video to his being there in person. It was easy to rewind what he had said without embarrassing either Kahn or one of the cousins.

Sebastian Thrun, an educator, programmer, robotics developer and computer scientist from Germany explained that in an online course a student asked him to clarify a point, and before he had a chance to speak, another student in the chat room beat him to the answer. When it wasn't the best answer, another student corrected the first, obviating the necessity for the professor to intervene. Many professors note similar problems and that a plug would suffice to provide an automated response. Some educators do this by writing a list of 20 problems students have -- say with a case study -- identifying and answering the problem on a single list, without having to write the same response on each student's paper. The new technology allows this automation to provide the answer, just as Google shows possible sites to answer your questions.

Joseph Schumpeter, the late Austrian-American economist and political scientist, described what he called the "creative destruction" of business firms that do not satisfy a market when a new entrant does better, or a recession culls out inferior ones. This is the fate that may happen to some of the 3,000 colleges and universities in the United States.

When I presented the idea of MOOCs possible dominance in the marketplace, MIT Professor Emeritus Noam Chomsky told me that while MOOCs might have some traction, "It's pretty clear that the online system is growing. It has its uses, but can't replace a real college education, where one typically learns from peers and informal discussion as well as, or more than, in classes."

Who am I to challenge Chomsky? Though I think that MOOCs will go a long way to changing the landscape of the brick and mortar experience of Higher Education.

So what might happen if Cloud Universities take over the marketplace?

Well, careers will hang in the balance, endangering the jobs of live professors and even tenured faculty. Likewise the other 50 percent of staff jobs in colleges and universities may be outsourced, if not eliminated. College buildings, like old mental hospitals, might become relics of yesteryear.

Soft infrastructure such as the peer-reviewed journals, accreditation organizations, tenure and promotion reviews might have to adapt to on-line schooling.

MOOCs would "teach to the test," much like that involved in the "No Child Left Behind" program of standardized testing. MOOCs also employ questionably reliable tools to gauge how proficient freshmen or seniors are in subjects such as English, Philosophy, and Political science. There is also a question of accreditation.

Today's approach to assure a minimum level of quality relies on regional accreditation boards, composed of teams of professors who come to a college or university with a set of established criteria and make human judgments on whether they have been met, are in jeopardy, or whether to dis-accredit the school. Moving toward virtual colleges and cloud universities might cause accreditation agencies to rethink their criteria. Employers will be faced with choosing between those who have actually sat in a classroom or participated in its cyber equivalent. Some even argue that virtual classrooms are incompetent compared to the real thing.

Clearly, well-endowed universities like Harvard, Yale and Princeton, or colleges like Swarthmore, Reed and Sarah Lawrence will not disappear even if MOOCs become a valid method of education. Should MOOCs take over the mainstream marketplace, we would see a bifurcation of education not dissimilar to what happened in England between Oxford and Cambridge, the red brick universities, compared to lesser institutions with far larger classes, fewer amenities, more day students and lack of elite networking.

If MOOCs do dominate the market, some think that graduates of real classrooms might have an advantage. Consider the challenges facing a complete MOOC takeover. In societies that regard themselves as egalitarian, the idea of a MOOC- infused education raises serious questions of legitimacy, affordability and social consequences.

It may have been all right in the past for banks, white shoe law firms, and major consultants to hire only graduates of elite institutions, true meritocracy may prevail when there are a multiplicity of providers, and market-set indicators of quality, and individuals educated solely through MOOCs as the program currently stands.

The Supreme Court has already insisted on commonality in public education admission in the cases of Bakke and Michigan. Rather than toleration of individuality, recruitment may be standardized. Would any of the three branches of Government in the U.S. accept bifurcation in higher education with only those who could afford $50 thousand annually to go to private colleges and universities while the vast majority must rely on virtual universities? I think not.

A recent Bain & Company study on the state of higher education in the U.S. made the point that the current state of classroom teaching is unsustainable. A third of institutions are financially unstable, they say. Yet, most of these institutions refuse to change organically and are burying their heads in the sand. Boards of Trustees and Faculties will remain conservative as long as they can be, according to Bain.

The only alternative for Higher Education is to try the new technology; just as some hotel chains are experimenting with diversification. Accor in France has been the most aggressive in extending their properties from 1-star to 5-star, each with a unique name, features, and clientele.

Airlines have had mixed results: British Air bombed with their attempt at low cost subsidiaries (Air Inter in France), Singapore Airlines have been successful with Tiger Air in Southeast Asia. Clearly MIT and Stanford are making these virtual courses available but believe that students who get certification will not be seen as equivalent to their traditional graduates.

Amy Guttman, president of the University of Pennsylvania, has stated that such courses will never equal what Penn graduates will have.

Of course, institutions of learning could just go for broke. Kahn and Thrun have chosen this route, separating themselves from an existing paradigm and starting afresh with the new one. This approach mirrors Christensen's dictum that trying to run a disruptive technology within an existing institution and location is doomed to failure (i.e. Kodak). HP tried it when they put inkjet production in the same factory in Fort Collins, CO only to admit incompatibility. They successfully moved inkjet printer production to Idaho. Toyota has successfully pioneered the hybrid inside of their organization. Renault, for example, deliberately started their low cost models in Rumania and India. As a student, both of life and of a liberal arts college, I hope that College Boards will pay close attention to these models from other industries as they consider the future.

If the folks in Higher Education and my friends like Chomsky are correct, it is unlikely that we shall see major impacts on existing institutions beyond the presently envisaged effect of costs rising at double the inflation rate (CPI).

Smaller institutions with high dependency on tuition and fees will have to monitor their catchment area and demographics very carefully to avoid severe financial problems. There is a possibility they will price themselves out of the market.

Individual schools will try to define their competitive advantage over each other and over virtual institutions by pointing to graduates' outcomes after 5 or 10 years of employment.

It is likely that higher education will follow the industrial pattern and new breakthrough technologies will take many years completely to replace the old. Look at mainstream companies to compare and contrast what MOOC means to higher education: Blockbuster is still alive, as is Netflix despite massive changes into DVD disks, streaming and Satellite distribution. IBM only sold its typewriter division in 1990, some 13 years after the first Apple, and 9 years after its own PC.

For Colleges and Universities, the outlook is far more troublesome. If Bain is correct that the present cost structure of most schools is untenable, change is inevitable. Christensen looks at the typical pattern in industry: new technology mostly started at a lower quality than the prevailing one, but the slope of improvement, and the acceptance in the marketplace of "good enough" soon outpaced the previous technology. Large pharmaceutical companies fought bitterly against generics, but later simply produced them in-house while shifting research and development into higher value medications.

An unarguable fact remains: greater choices mean greater opportunity and access. Colleges and universities are dealing with the human mind. Both folks with backgrounds like mine; fighting to survive in the world, and those who are wealthy and able to make any choice they desire, need a good education to be relevant in the workplace.

Our local, state, national and international economies are dependent on the education of our people. If colleges and universities fail to address the surge in cost and the emergence of MOOCs, they are destined to fail.

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