According to the latest Futuresource Consulting #EdTech K-12 Market Report*, Microsoft and its Windows Operating System (OS) is poised to raise its game in the fight for adoption and market share in the worldwide K-12 PC/Tablet market in 2016.
The past few years has seen Google gain rapid traction in the US market with its Chrome OS (Via Chromebooks) coming at the expense of both Microsoft and Apple. Q3 saw Chromebooks reach over 50% of sales for the first time (51% of US Qtr 3 2015 K-12 sales) with 1.63 million units sold of the total market (please note, this figure refers to Q3 sales and not installed base). The rise of Chromebooks has coincided with the need for Districts to implement online assessment (and the stipulation that all devices needed keyboards). The combination of the simple to use ecosystem, attractive hardware price point and industry leading management platform has resulted in Chromebooks gaining widespread momentum in the US market.
Outside of the US market however, Chrome is growing at a much slower rate (3% share of Rest of World in Qtr 3 2015). Without the short term driving factor of a switch to online assessments (apart from a recently announced project in Finland) there has been much less overall momentum. Many countries globally, especially the major emerging markets such as Brazil, Mexico and India, do not have the connectivity required to run a cloud based infrastructure and although Chrome adoption is developing steadily in the more mature Western European markets, it's not at the same explosive growth rate as witnessed in the US.
Microsoft to Fight Back With Focus on Device Manageability & New Product Ranges
Microsoft has started the fight back outside of the US. It's won significant projects in emerging
K-12 markets, such as a 960,000 unit national deal in Mexico and an 11,000 unit deal with the Microsoft Surface in the UAE as part of the Bin Rashid Smart Learning program. All places where Android tends to be the main competitive solution.
Microsoft is clearly taking a multi-faceted approach to the K-12 market, led by the launch of Windows 10 but which also includes a recently announced strategic technology partnership with Lightspeed Systems to tackle the whole manageability challenge across multi-user K-12 environments. One of the greatest reasons cited for the rapid rise of Chromebooks is the simplicity for IT administrators to manage and deploy devices at scale. Users have often complained about the Windows ecosystem being too complicated. The partnership with Lightspeed is aimed to counter this and feedback to date is that the partnership is being well received by users.
One of the other core success factors for Chromebooks has been the attractive price points (typically $200-230) with Chromebooks effectively cornering the 'entry level' of the K-12 market (for non-tablet purchases). Futuresource understands that in 2016 Microsoft and its OEM partners will be aggressively fighting back and a wide range of Windows notebook devices will enter the market targeting the sub $300 price point. HP and Acer have already launched the HP Stream and Acer Cloud Book, with equivalent solutions from other OEMs likely to be announced in early 2016. Microsoft may have been on its back foot for a while but a war path has been carved and it's aggressively fighting to maintain and grow its position.
One other battle ground in 2016 is likely to be with 2 in 1 products, (devices that can either operate as a tablet or notebook via detachable keyboards or 360 convertible devices). 2 in 1 products have long been viewed as ideal for the education sector, but the high price points (devices typically over $500) have led to relatively limited adoption to date - 5% of US demand in Qtr 3, 3.7% globally. Prices on these devices are also expected to drop significantly, with devices expected to retail between the $300-350 price range opening up volume opportunities on a global scale. Futuresource expects 2 in 1 products to reach 11% in the US in 2016, 8.5% globally. Microsoft has traditionally been in pole position on these devices and in the short term at least is expected to remain so, but the recent announcement from Google regarding the blending of features across Chrome OS and Android suggests that touch capability is likely to become a more prevalent part of the Chrome ecosystem.
Mike Fisher, Associate Director of Education Technology, Futuresource Consulting highlights that, "Chrome is the clear US market leader now with over 50% of the K-12 OS market share, meaning Apple and Microsoft both have significant ground to make up. Microsoft is making strong moves, developing a partnership with Lightspeed to address device manageability, whilst bringing new devices to market which are likely to compete head on with Google in the key sub $300 range. It will be interesting to see if Microsoft can halt the momentum Google has developed in the US. We envisage that the summer buying season in 2016 could be incredibly competitive with an OS price "war" taking place."
Outside of the US, the declining prices for 2 in 1 models is expected to see Microsoft develop a stronger position in some emerging markets, directly competing against Android tablets for large scale deployments. One thing is for certain; the winner should be schools as they are likely to see a much wider range of affordable devices as vendors rush to take advantage of the strong growth opportunity of computer sales in K-12 education.
Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments. www.futuresource-consulting.com
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Mike has been with Futuresource Consulting for ten years, in this time primarily focusing on the education and B2B display industries. With a wide range of executive level industry contacts and full visibility of vendor developments, channel segmentation, positioning and end-user usage scenarios, Mike is able to add value to a whole host of blue chip clients in the education technology area.
Mike's specific expertise focuses on the areas of IT in education and channel segmentation. He is also recognised as an international authority in this space.
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