1. V I E W P O I N T
The Real Story Behind the
Failure of U.K. eUniversity
The picture behind the public failure of UKeU is more complex, interesting,
and salutary than many reports would suggest
By Richard Garrett
I
n February 2000, with much fanfare, cation sector. It did not award its own campus rather than as a supplement,
the British government announced degrees, instead contracting with U.K. as has more often turned out to be the
funding of £62 million ($113 mil- universities to offer theirs. The company case. UKeU’s business model centered
lion) for a national, commercial e- focused on infrastructure development, on wholly online provision, with very
university called United Kingdom e- course development support, quality little evidence of a secure market.
University (UKeU). The initiative was assurance, and marketing. The target Wholly online higher education took
touted as an innovative response to the audiences were primarily (1) interna- off in the United States—U.S. research
perceived opportunities and threats of tional graduate students who wished firm Eduventures estimated almost one
online higher education—in the form of to study online rather than come to million enrolments in 2004—but else-
U.S. institutions such as the University the U.K. and (2) the private sector (busi- where growth appears to be much more
of Phoenix Online and the University nesses wanting customized degree-level limited. This is partly because online
of Maryland University College, not to training for staff, for example). delivery outside the United States has
mention the many—at the time—dot- The first programs were available in (with key exceptions) yet to attain suf-
com start-ups such as NYU Online and early 2003. By early 2004, more than ficient status, scale, and sophistication
Cardean University. 20 U.K. universities and other organiza- to succeed.
Despite considerable resources and tions were listed on the UKeU Web site This led to a third problem—brand-
a lengthy development period given offering around 40 programs, but most ing. Confusion existed between the
to UKeU, the government announced with a start date of mid to late 2004. The mainstream U.K. education brand
in February 2004 that the project had only recruitment figures ever released emphasizing the three elements of tra-
failed to meet recruiting targets, and it were 900 students by November 2003 dition, place, and quality and market-
quickly became clear that the initiative (against a target of 5,600). ing by UKeU that promised “the best
would not survive. Recruitment and of U.K. higher education with online
marketing have ceased, and negotia- Timing, focus, branding convenience” without being able to
tions are under way to transfer certain The first problem for UKeU was tim- utilize these elements. This is not to
activities and assets to the U.K. higher ing. UKeU debuted in February 2000, say that online delivery is low quality,
education sector. just a few weeks before the dot-com but rather that its novelty—and some
In the wake of the announcement, crash. During the Internet boom, critical comment in the media—have
much press coverage has accused the the potential for new technology to led many to question its potential.
venture of wasting public funds and transform many aspects of society in Leading U.S. providers such as the
pursuing an unrealistic business model. the short term, including higher edu- University of Phoenix Online were
Such criticism raises important ques- cation, was dramatically overstated. arguably better placed because of a
tions: To what extent was UKeU funda- Concern that if the U.K. did not “do strong alignment between the conve-
mentally misconceived? Or was it simply something,” its international student nience branding of the parent body (the
saddled with impossible expectations? market would be overrun by aggres- University of Phoenix itself) and the
sive online universities from the United convenience branding of online learn-
Snapshot of UKeU States and elsewhere was based on fear ing. Of course, many U.K. universities
Prior to its demise, what did UKeU rather than fact. might be characterized as convenience
look like? In brief, the venture was a pri- The second problem was focus. The institutions, but convenience is not a
vate company (with around fifty staff), dot-com boom presented online deliv- strong part of the image of U.K. higher
majority owned by the U.K. higher edu- ery as an alternative to the conventional education abroad.
4 E D U C A U S E Q U A R T E R LY • Number 4 2004
2. Buy or Build? Impatience
A fourth problem arose from plat- All this leads to a fifth problem—impa-
The underlying difficulty
form investment. Early on the com- tience. An April 2004 press release from
pany decided that existing commercial was that the venture took the Higher Education Funding Council
and other platforms were inadequate for England (which administers public
and that competitive advantage lay in
three years before it could funding for higher education in Eng-
developing a world-class platform in- even recruit, and it had not land, including for UKeU) stated that
house. The central argument was that one reason for “restructuring” UKeU
the platforms then available (course attracted any cash support was that “student recruitment had
management systems such as Black- from the private sector. not met planned targets in the first
board and WebCT) were year.” This serves as a reminder that
too narrowly conceived (concerned in terms of recruitment, the company
with course management only, rath- has only been operational for a single
er than integrating portal, content, and support services as on core func- year. In other circumstances, the 900
and other functionality); tionality. Key trends have been the students recruited by November 2003
positioned e-learning as supple- integration of the course management to the handful of programs then avail-
mentary to the campus (whereas for function into broader administrative able would have been judged quite
UKeU, at least in the original think- capabilities and attempts to enhance respectable. That said, the underly-
ing, provision was to be entirely the pedagogic respectability of leading ing difficulty was that the venture
online); platforms. took three years before it could even
overly content-driven (rather than Whether or not the UKeU platform recruit, and it had not attracted any
student-driven); and is (or would have been) among the best cash support from the private sector.
did not permit much of what the in the world would be very difficult to Again, timing was the problem. Many
developers regarded as good peda- demonstrate to potential students. of the firms trying to carve out a place
gogy (team teaching, problem-based There is generally a significant gap in higher education during the dot-com
learning, blind marking). between the pedagogic conception of boom—the very firms UKeU imagined
Between 2002 and 2004, UKeU spent instructional designers and those of the would invest—quickly retreated to their
millions developing a new platform. average faculty member, to say noth- core businesses once the bubble burst.
Following a competitive tender, the ing of the average student (even at the If UKeU had been announced just one
company brought in core technology graduate level). This suggests a tension year earlier, things might have turned
and expertise from Sun Microsystems. between the amount of investment in out very differently—at least in the
Bold claims were made about the emerg- the new platform (said to be around short term.
ing system. To quote a UKeU brochure £20/$35 million) and the rather limited There is little doubt that wholly
from 2003, “We have created a new marketing pay-off in terms of student online delivery (and the various in-
eLearning platform and architecture recruitment. country support models UKeU was
that dramatically exceeds the capabili- In retrospect, the company might beginning to experiment with) will
ties of any previous system.” have saved significant funds by using emerge as a sizeable market in Europe,
On one level, in-house platform an existing platform, getting programs Asia, and elsewhere. Branding can work
development was sensible. If the UKeU up and running more quickly, and at both the high and low ends of the
courses could run on a platform widely leaving more funds for marketing. market, and much in between. There is
acknowledged to be superior, it would This would also have permitted the no reason to think that the convenience
go some way to reducing the aforemen- venture to grow more slowly (that is, of online education will appeal only to
tioned brand confusion—there would with reduced upfront investment and students in North America. Moreoever,
be a better alignment of the traditional ready-to-go third-party technology, there are now examples of leading U.K.
U.K. higher education brand and high- UKeU could both have recruited faster universities offering successful online
quality online programs. Given that the and had more modest growth targets). provision. Prestigious U.K. universities
UKeU platform remains incomplete, it is Platform innovation might better have such as Liverpool appear to have com-
difficult to assess its full capabilities. It come once drawbacks of third-party bined their traditional reputation and
is an open question whether the vision systems had been demonstrated in online convenience to good effect. Lau-
or reality of the UKeU platform is in fact practice and healthy recruitment had reate Education (formerly Sylvan Inter-
significantly and qualitatively different prompted private investment. Indeed, national Universities), for example, has
from the latest version of commercial this approach would have allowed the attracted private investment. Moreover,
and open source rivals. Recent years in-house platform to develop at an the notion of a single U.K. quality brand
have witnessed significant platform appropriate pace, thus avoiding the still has potential, allowing students to
convergence, with vendors focusing as embarrassment of missed deadlines cut through multifarious providers to a
much on third-party interoperability and media scrutiny. trusted institution.
Number 4 2004 • E D U C A U S E Q U A R T E R LY 5
3. Massive up-front investment, lack of university programs through UKeU, varying extents, building slowly and
private sector cash, low enrollments, initially to deliver teacher training) as learning all the time. This may be the
brand confusion, and an incomplete part of a wider Sino-U.K. Collaborative end for UKeU, but for online higher
platform meant that by 2004 UKeU was Program in Higher Education, and a education it is only the beginning.
doomed. Take short-term funding—and national research center specializing Participating institutions will have
impatience for results—out of the equa- in e-learning. Evidently these activities learned many valuable lessons from
tion, however, and the venture would will continue (the research center is just the UKeU experience, despite what
likely have covered its costs in another now getting off the ground), but without many regard as a waste of money and
five years or so and become a major UKeU branding. eChina has been trans- resources. The interesting questions are
online brand. ferred to the University of Cambridge. whether and how such lessons can be
Every effort is being made to accom- distilled for general consumption (the
What Next? modate students currently enrolled on aforementioned research center is work-
So what has happened to UKeU? The UKeU programs, with the majority sim- ing on this) and whether competitive
UKeU platform is to be “transferred” ply moving over to the infrastructure of advantage in e-learning, for individual
(sold?) if ongoing discussions with the originating university. Aside from institutions or for the U.K. as a whole,
“organizations in the public and pri- business closure expenses, no more might emerge as a result. e
vate sectors” come to fruition. To date, public funds will go to the venture
no further developments have been (about £35/$62 million has already Acknowledgment
announced. Aside from the brand and been spent). I would like to thank Jonathan Darby, for-
mer Chief Architect at UKeU, for agreeing
some key staff, it is thought unlikely Along with NYU Online, Scottish
to be interviewed as part of the preparation
that any other aspect of UKeU will Knowledge, and Fathom, UKeU has now for this article.
transfer with the platform. failed. Others, such as Universitas 21
Of the original £62 million of public Global and Global University Alliance,
funds originally allocated to UKeU, £7/ stumble on with no evidence of par- Richard Garrett (r.garrett@obhe.ac.uk) is
$12 million was set aside for so-called ticular success. Meanwhile, universities Deputy Director at the Observatory on
public good initiatives. These include across the world are gradually moving Borderless Higher Education (http://www
the eChina program (developing U.K. online—both on and off campus—to .obhe.ac.uk) in London, United Kingdom.
6 E D U C A U S E Q U A R T E R LY • Number 4 2004
