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Knewton is far from the only company selling personalization. Textbook giant McGraw-Hill Education launched an adaptive product line in 2009 and has tailored it to more than 200 textbooks across 30 subjects. Amplify, the education company owned by media giant News Corp., plans to launch an adaptive curriculum in 2014, and IBM has developed systems to evaluate student performance and improve instruction that are used by public schools in Alabama and Tennessee. Kaplan, Ferreira's old employer, says it generates more revenue from adaptive products than anyone else. Many start-ups are also in the fray, including the nonprofit Khan Academy, whose adaptive-exercise engine has over 6 million registered users doing some 3 million exercises per day and which is releasing a more sophisticated version this fall. "The space is changing very fast right now, and there are a lot of people making plays at it," Horn says. "I think next we'll start shaking it out and see who's real and who's not."
A COST TO PRIVACY?
In the past five years, the department of Education has made changes to student-privacy laws that make it much easier for companies like Knewton to gather data on kids. Student information can now be passed, without parental consent, to a third party that a school deems to have a "legitimate educational interest in the records," as when a district hires a contractor to perform a service that cannot be carried out without access to student data. "If a school is using a service, the school is the steward of the data and is subject to the same privacy requirements as always," says Richard Culatta, acting director of the Department of Education's Office of Educational Technology. "We encourage schools to be transparent--to make sure parents are aware of how student information is being used."
That latitude has led to an outcry from those concerned about the potential invasion of student privacy and the ability of private companies to profit from it. "Schools are availing themselves of these free or low-cost services and not seeing the real cost to student privacy," says Khaliah Barnes, administrative law counsel at the Electronic Privacy Information Center, which is suing the Department of Education over its changes to student-privacy laws.
Knewton says it doesn't have access to any information that would identify a student. It assigns each student a lengthy identification number that is used to track performance and build a learning profile, but it does not know the student's real name or Social Security number. "The data we collect is only ever used to drive the best possible recommendation for the next thing you do," Ferreira says. "That's it." He acknowledges that Knewton "co-owns" the data, but he's adamant that the company will "never advertise against it. Never, never."
But that doesn't mean it won't profit from it, of course. And if Knewton is capable of delivering on its promise--and while it is a relatively young company, it does not have any peer-reviewed academic studies to back it up--then it won't be the only one reaping the benefit.