The education market is a lucrative one for technology companies who sell hardware and software to students, teachers and schools. But it’s also important for grabbing customers early in life. The technology a student becomes familiar with in school has a good shot of being their preference later in life. Microsoft (NASDAQ:MSFT) long dominated this market, but that was before Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) entered. For the past few years, Google has used the education market to push Chromebooks. And Microsoft has lost huge chunks of market share. But the company just announced new cheap Windows laptops and other products aimed at taking back the education market from Chromebooks.
Microsoft itself isn’t releasing everything — it’s leaning on OEM PC manufacturing partners for much of the hardware. But after years of ineffective measures (remember the Scroogled ad campaign?) the company seems determined to fight back against Google in a meaningful way.
Microsoft’s Latest Education Push, Featuring Cheap Windows Laptops
Google’s Chromebooks had several advantages over traditional Windows laptops, but one of the keys for budget-strapped school boards and parents has been price. When a decent Chromebook could be had for $200, it became an easy choice over cheap Windows laptops that still cost two or three times as much, but seemed clunky and underpowered in comparison.
The Bett educational technology conference is currently underway in London, and MSFT took the opportunity to announce its latest tactics for winning back the classroom from Google.
First up is a new generation of cheap Windows laptops from Microsoft’s OEM partners. Companies like Dell (NYSE:DELL), Acer and Lenovo are introducing new laptops starting at under $200. They run Windows 10 S, which is making headway in negating Chrome OS security advantages. The new devices are built to be rugged, offer all-day battery life, and there are classroom-friendly form factors including 2-in-1s that can be used as a tablet. One of the Lenovo 2-in-1 laptops can even use a standard pencil as a basic stylus…
Microsoft’s own hardware contribution takes the form of an affordable stylus. In the classroom, being able to write, draw and make notes with an electronic stylus has proven very popular. Windows Ink and other software features take full advantage of stylus use. But Microsoft’s cheapest stylus has been the $99.99 Surface Pen. The company announced a new Microsoft Classroom Pen, a stylus with a more durable tip that it will sell only to educators, and in packs of 20 for $799.80. That sounds really expensive, but works out to a much more budget-friendly $39.99 each.
The third thing MSFT announced was on the software front. Microsoft Teams continues to be pushed as a classroom tool. The company is upping the functionality in an effort to win over teachers. They’ll be able to import existing student info into Teams using a Grade Sync feature, Turnitin (a scanning tool that detects plagiarizing) is being integrated, and teachers will be able to use the Teams mobile app for iOS and Android for marking assignments.
Also announced were new VR tools including free Dyslexia training materials for teachers.
Will This be the Counter-Punch That Works?
The education technology market is a valuable one. In the U.S., it’s predicted to hit $49 billion this year, half of that in K12 classrooms. That doesn’t include what may be the bigger prize: using students to launch an assault on the business computer market. Google has captured nearly 60% of the U.S. education laptop/tablet market with Chromebooks, and has already leveraged that success to start pushing more expensive Chromebooks into the business market. That move threatens MSFT’s Windows and Office revenue, key components of Microsoft stock value.
MSFT began to fight back against Chromebooks in the classroom in a serious way in 2017 with the introduction of Windows S. Obviously that wasn’t enough.
The company is hoping Windows S combined with the latest round of cheap Windows laptops, affordable styluses and classroom software integration is enough to stop the Chromebook invasion. If this doesn’t work, Microsoft is running out of options. And with international education markets starting to go down the same Chromebook path as U.S. classrooms, time is running out.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.