What does a stagnating economy mean for Ed Tech?

All signs are certainly pointing to a slowdown in our economy, if not a full-blown recession. Consumer spending is already down and Dell just reported a weaker-than-expected fourth quarter.

So what does this mean for Ed Tech? Dell is planning layoffs to boost profits, but the first-tier OEMs, in addition to cutting costs and finding new ways to convince consumers that they really do need new computers (notice that Dells are now available at Walmart, Staples, and Best Buy), will have to court the enterprise and drive further into emerging markets.

Since educational institutions are certainly part of the enterprise market, we should expect to see some fairly aggressive pricing from the likes of Dell and HP. Obviously, any economic downturns can strain our shoestring budgets, but the school buying season at the beginning of FY 09 just may be the time to extract some good deals out of companies struggling to stay competitive.

Similarly, our colleagues in emerging markets should see OEMs pushing for serious growth, since a lack of saturation in China, Brazil, India, Russia, etc., mean that these countries may be less affected by an economic slowdown. Obviously, Dell wants Russian school kids using Dells, not cheap Linux boxes and should make it worthwhile for purchasers in these markets to look at the first-tier vendors.

What do you think?

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