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Through the back-to-back acquisitions of its two major rivals, the media conglomerate Pearson PLC has strengthened its position as the leader in the market for K-12 student-information systems, analysts say.

London-based Pearson announced its acquisition of Apple Computer Inc.鈥檚 PowerSchool, the third-largest provider of computerized student-information systems based on revenue, on May 25. Six days later, Pearson announced its purchase of Chancery Software Ltd., based in Burnby, British Columbia. Chancery is the second-largest SIS provider based on revenue, according to Pearson.

PowerSchool will become the lead brand of Pearson鈥檚 SIS businesses, and future SIS products will bear the PowerSchool name. None of the companies involved would disclose the terms of the sales.

鈥淭he acquisitions of PowerSchool and Chancery transform our SIS business, doubling its size and enabling us to offer the pre-eminent software solutions for all levels of schools and districts (small, medium, and large),鈥� Steven Dowling, the president of Pearson鈥檚 School Companies, the company鈥檚 K-12 division, said in a May 31 press release announcing the Chancery purchase.

Up to now, Pearson鈥檚 student-information systems were almost all housed on computer servers. The company鈥檚 main SIS product has been SASI, a server-based student-information system that鈥檚 used by almost 16,000 schools.

But analysts say that the future of K-12 data management is now seen as residing in Web-based technologies, making the potential for consolidation clear.

鈥淲eb-based is the way to go,鈥� said Anne Wujcik, an education market analyst with Quality Education Data, a Denver-based education and marketing firm. 鈥淐learly, Pearson is now the market leader for SIS and [data-management] systems.鈥�

The iPod Connection

Products from the three companies, now combined into Pearson School Systems, are now used in more than 29,000 U.S. schools.

Pearson spokeswoman Wendy Spiegel said the acquisitions not only expand Pearson鈥檚 client base, but also will allow the company to improve the level of customization it can deliver.

While PowerSchool tends to serve smaller schools, Chancery focuses more on larger districts, which often require a greater degree of customization, according to Pearson.

At a time when the appetite for improved systems for managing education data is strong, the adoption of Web-based systems by smaller to midsize school districts is expected to grow as the products become more user-friendly and secure, said Catherine Burdt, a senior education analyst with Eduventures. That Boston-based market-research firm tracks the education market.

鈥淚n the case of Pearson acquiring Apple鈥檚 PowerSchool, this brings together two strong players, 鈥� with the added benefits of leveraging the K-12 digital content and iPod connection,鈥� Ms. Burdt said in an interview.

Pearson said in a press release that the PowerSchool purchase would allow it to develop new services, including research-based educational content compatible with iPods, the popular digital audio players made by Cupertino, Calif.-based Apple Computer.

PowerSchool will continue to be based in Folsom, Calif., and Mesa, Ariz., where Pearson School Systems is based, and Chancery will stay in its Canadian location. Pearson School Systems will be headed by Mary McCaffrey, the former president of PowerSchool.

Product Duplication?

Pearson already had a big footprint in the burgeoning precollegiate market for data-management tools. According to a survey of U.S. public schools last year by Market Data Retrieval, a Shelton, Conn.-based research company that tracks the use of educational technology, SASI had captured a 21 percent slice of the K-12 market for student-information systems. PowerSchool came in a distant second, with 7 percent of that market, and Chancery had 3 percent. (鈥淩isk & Reward,鈥� Technology Counts 2006, May 4, 2006.)

After the announcement of the Chancery purchase, Ms. Wujcik said she was puzzled by the acquisitions. 鈥淚 don鈥檛 know what they鈥檙e doing,鈥� she said. 鈥淚t鈥檚 not like Pearson is inexperienced in large districts and customization.鈥�

Also, she said, Pearson introduced its own Web-based SIS product, called Pearson Centerpoint, less than a year ago. Ms. Wujcik wondered whether Pearson would retain or change its SIS offerings as a result of the acquisitions.

The company has 鈥渁lready got SIS products and other [K-12 data-management] products coming out of its ears,鈥� she said. 鈥淭here鈥檚 duplication of product here.鈥�

Pearson plans to support all of its SIS products, Ms. Spiegel said. She added that PowerSchool and Chancery complement, not duplicate, Pearson applications.

As for the acquisitions, she said: 鈥淐ustomers who have relationships [with the acquired companies] will have continuity. 鈥� I absolutely believe that it will be seamless.鈥�

Pearson is far from inexperienced in the world of acquisitions. It bought Bloomington, Minn.-based National Computer Systems, which supplies test-scoring equipment, for $2.4 billion in 2000, for instance.

Pearson also acquired Scholar Inc., an Upper Saddle River, N.J.-based company that provides K-12 Web-based data-management tools, in November 2003.

Still, Ms. Wujcik doubts that the transition will be as smooth as Pearson predicts. 鈥淚f all they do is leave the companies where they are, then it will be seamless,鈥� she said. But she expects Pearson School Systems to undertake 鈥渂ack-office changes.鈥� For example, she said, 鈥測ou can鈥檛 run three customer-service centers.鈥�

As a result, Ms. Wujcik suggested, Pearson鈥檚 biggest challenge will be keeping everyone happy, including employees and clients. 鈥淎lthough,鈥� she added, 鈥淚 don鈥檛 know where [the clients] would go if they were unhappy.鈥�