International Journal of Computer Trends and Technology- volume3Issue4- 2012

A Campus Technology Choice Model with Incorporated Network Effects: Choosing Between General Use and Campus Systems
Eric Malm1, David Loomis2, Joanna DeFranco3
1

Business Department-Cabrini College, 2Economics Department- Illinois State University, 2Software Engineering- Penn State University 1 610 King of Prussia Rd, Radnor PA 19087, USA

Abstract This paper explores the choices campuses make between providing support for campus-specific (often proprietary) solutions, and utilizing and supporting generalpurpose (often open) solutions. We present a model of technology choice that includes network effects and focuses on a faculty members choice between campus-specific and general-purpose technologies. A theoretical model presents key findings, which are demonstrated mathematically and illustrated with a numerical simulation. As the size of the software user-networks increases, it is shown that faculty members naturally gravitate toward general-purpose solutions and it becomes increasingly costly for campuses to support and promote campus-specific systems. The paper concludes with a discussion of the implications of network effects for campus technology policymakers. Keywords technology adoption, technology policy, network externalities, Metcalfes Law.

I. INTRODUCTION

Despite the growth of low cost software models in other sectors, university spending on the purchase and support of proprietary technologies continues to grow. Initially many colleges purchased proprietary systems that were typically hosted on the colleges network and designed specifically for the higher education market, or they created home-grown solutions customized for their institutional needs (which we term campus-specific solutions). Most campuses continue to use proprietary or custom solutions despite the explosion of web-based tools and the growing prominence of alternative models, such as Software as a Service, and low or no-cost web based services such as YouTube, Facebook, and Google (which we term general-purpose solutions). In this paper we present an economic model of technology choice that focuses on the individual faculty members adoption decision. The faculty member may choose

between a general-purpose solution (such as YouTube) and a campus-specific solution (such as Blackboard or DragonDrop). The economic model incorporates network effects, the idea that the value of software increases exponentially as the size of the user-network increases, and places the individuals decision within an institutional context. The theoretical model illustrates the tension between providing institutional support for generalpurpose and campus-specific systems. As the size of user networks increases, economic theory suggests that faculty will naturally gravitate toward general-purpose solutions and thus it becomes increasingly costly to support and promote campusspecific systems. Simulation results are used to illustrate the models key findings. The paper concludes with policy implications and suggestions for future research.
II. LITERATURE REVIEW

In this section we provide a context for the theoretical model by reviewing literature on campus software, models of adoption from the computer technology literature, and economic models of choice not often used to describe technology adoption. If technology is to play an increasingly important role in much of higher education, it will be increasingly important for institutions to make informed decisions about which software to purchase, how it will be supported technically, and how faculty will be encouraged to use it effectively [1]. Some background on economic modeling and the concept of networks effects is provided as background for a general audience.

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A. Campus Software

The institutional choice to use and support campus-specific software solutions is a very common one, and can be better understood when placed in a historical and institutional context. Most colleges and universities were early adopters of technology, employing mainframes and campusbased systems for decades. Similar to large corporations, colleges and universities had the resources and expertise to invest in large campusbased systems and saw many benefits from doing so. From the Electronic Numerical Integrator And Computer (ENIAC), widely acknowledged to be the first computer, housed at the University of Pennsylvania, to Programmed Logic for Automated Teaching Operations (PLATO) developed at the University of Illinois, academic institutions have played an important role in the development of computer technology. With the rise of personal computers, many campuses continued to play a leadership role in the spread of technology. For example, in 1983 Drexel University became the first university to require every student to have access to a personal computer with most students purchasing Apple computers [2]. Students access to resources was limited primarily to internal campus networks until the late 1990s when Internet access became more widely spread. During this time campuses were largely landlocked when it came to technology. Students and faculty had to rely on resources that were housed and controlled by the university. In the late 1990s companies introduced a variety of software products aimed at the university markets such as learning management system providers Blackboard, Angel, WebCT and others. Most systems were designed to be housed on campus-owned servers, where they could be customized and accessed over Intranets (and eventually accessed over the Internet). This evolution of educational software generally mirrored software development for corporate markets. For example, providers like SAP created Enterprise Resource Planning software that was normally housed on company-controlled servers that allowed access on an Intranet within the organization. It has only been within recent years,

as the penetration of high-speed Internet has dramatically increased, that web-based, externally hosted and controlled systems have become more widely available. While the jump from universityhosted to externally-hosted software was small, it did however, represent a significant philosophical leap due to a loss of control and a fundamental operational change.
B. Current role of technology on campus

Learning Management Systems (LMS) are clearly only one of many types of software used by universities, but they are common examples of software designed specifically to enhance students learning and are associated with blended learning (a combination of traditional classroom and online course delivery methods). Many authors [3,4,5,6,7] have documented positive aspects of integrating technology into traditional classrooms. Worldwide, K-12 schools have increased the online learning offerings in their curriculum, suggesting that incoming students will be increasingly accustomed to online elements [8]. A large Department of Education-sponsored meta-analysis found that blended learning resulted in higher levels of students learning than faceto-face or online learning alone [9]. As the newer generations of students who have grown up with the Internet (whether they are referred to as The VGeneration [10], Digital Natives [11], or the Net Generations [12] move into higher education they will likely expect the integration of technology into their class experience and the role of technology on campus is likely to continue to grow. The questions of which technologies institutions and faculty members will choose to use, however, remains unanswered.
C. Technology Adoption Literature

There is a large and varied literature on technology adoption within the computer and information science fields. One branch stems from Davis [13] Technology Adoption Model (TAM). According to TAM, technology is adopted on the basis of perceived usefulness, perceived ease of use, and users attitudes toward technology. The TAM has been tested and extended by many authors

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[14,15,16,17,18,19]. The model has been adapted to incorporate additional factors, examined from the perspectives of both students and faculty, and tested empirically. Yang and and Data [20] extended the literature on TAM and expectation confirmation theory (ECT) to examine factors that caused faculty to continue to use technology. Bekkering [21] used expectancy theory to model choices between alternative technologies, such as the adoption of a notebook or tablet computer. While these models could conceivably be used to compare generalpurpose and campus-specific software, and terms like perceived usefulness could capture network effects, this literature did not explicitly consider network effects. Another strand of literature focused on the institutional and support context in which the adoption decision takes place. Garrison and Vaughn [5] stressed the importance of building faculty communities to share successes and failures; these communities may be built with our without administrative support or backing. Buckenmeyer [22], for example, focused on faculty development and continual access to needed resources and key factors that need to be addressed before the adoption took place. Others had focused on the non-adoption of technology, for example Lin, Singer and Ha [23] study resistance to technology among faculty. Klobas and McGill [24] focused on the role of involvement. While this literature on institutional support could apply to general-purpose technologies, the policy choices between generalpurpose and campus-specific software was not explicitly considered.
D. Economics literature

Economics, especially microeconomics, has had a long history of studying the choices of individuals. In microeconomic theory consumers are modeled as maximizing utility- defined as the happiness or satisfaction that is derived from a decision [25]. Decisions may be modeled as continuous ones, such as a students decision of the amount of time per day spent studying. Other decisions are modeled as being discrete, such as the decision to choose between enrolling in an online or face-to-

face course. In discrete choice models (see [26], for example) consumers weigh the costs and benefits of different options and choose the option with the highest net benefit. The network effects model presented in the next section followed this economic approach. Metcalfes Law, widely cited (see [27, 28, 29] for example) in economics and technology literature, states that the value of a network grows in proportion to the square of the number of users. It was originally developed to describe the value of telecommunications networks. For example, phone systems, in a developing country where few people have phone lines were of little value to users. However as the number of network users grew the value of having a phone grew significantly. This principle had been applied widely in the technology area, and could describe the explosive growth of Facebook (and decline of MySpace), or be used as a tool to analyze the competition between the iPhone and Android. The source of this network value, or network effect, came from many places. Gallaugher [27] described complementary benefits, exchange value and staying power as key contributors to network value. In the context of the smartphone decision, complementary benefits describe the value of available apps in the iTunes and Android markets. Exchange value describes the size of the user base you can learn from, and staying power predicts whether the PalmOS will still be around in a few years. Economists Shapiro and Varian [29] viewed these positive network effects as critical to IT strategy. They argued that if network effects were strong enough, a market may experience a tipping point in which all consumers gravitated to one product or platform. This idea might describe the meteoric rise of Facebook. When tipping points were at play, the theory suggested that one provider won and all other providers lost. While the situation was not always that dramatic, the idea of tipping points dramatically illustrated how the size of user networks could quickly and dramatically affect consumer choices. We argue that network effects are likely to exist in the educational software market. Software that

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enables large communities of user, both teachers and students, to share and collaborate is likely to result in a robust set of tools and resources. As the number of users grows, so does the value of the technology. It is within this context that we argue that a general-purpose solution like YouTube is . The scaling parameters and include likely to have more value than a campus-specific factors that could amplify the value of a particular solution like DragonDrop. technology. We would think of as being an institutional parameter that reflected institutional III. METHODOLOGY support for a particular technology (including We developed an economics-based model, training, user groups, inclusion of technology usage utilizing Metcalfes Law, in which faculty members in faculty evaluation, etc.) The cost of adopting a weighed the costs and benefits of technology teaching technology was assumed to vary with the adoption. The faculty member would choose the individual faculty member, according to their option with the highest positive net benefit (where comfort and familiarity with technology. Through net benefit is the difference between benefits and first order conditions for optimization (see [30] costs). The benefits could include items such as example), we knew that the general use technology reduced faculty effort, institutional recognition, will be selected if: additional pay or improved student learning; costs represented the direct and indirect costs of adopting Equation 2 a: Equation 2 b: the technology including the time needed to learn If then the general-purpose technology will be adopted if G > R how to use a platform and create course content and the potential for more work, or the risk of decreased If the institution favored the campus-specific student performance. Faculty could choose from a campus-specific technology, or an external, technology and was neutral toward the generalassumed the value of 1 general-use technology that was available to anyone, purpose technology, (meaning that the general-purpose technology or choose not to use technology. Unlike most models of technology choice, our model explicitly would neither be favored nor discouraged). Under accounted for network effects (the idea that the these assumptions general-purpose technology value of a technology increases with the square of would be adopted as long as: Equation 3: the number of users). We argued that the power of network effects is great, and that universities that The term represented the variety of strategies fail to acknowledge network effects would need to that campuses employ to promote campus-specific devote an increasing amount of resources to software programs, and could include things maintain or increase adoption of the campus- ranging from spending on technical support, faculty specific technology. training, course release or stipends for using the The faculty decision was shown algebraically technology. Equation 3 suggested that the campus below in the equation 1. Faculty members were faces an uphill battle. As the number of users of assumed to have three choices. They could adopt general-purpose software (represented by G) grows, the campus-specific technology, a general use the campus (through ) must devote an increasing technology, or neither (choosing not to use amount of resources to support the proprietary technology). The faculty member would adopt technology. Therefore, every increase in G must be technology if the benefits of adoption (represented met with an increase in in order to maintain by the first term in the square brackets, ) usage levels of the campus-specific software. outweighed the costs (represented by ). Equation 1:

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familiarity with technology in general; faculty who We used a numerical simulation to illustrate the could figure out technology easily faced relatively Distributions of these models implications. We simulated 100 faculty lower adoption costs. that varied with respect to their technological individual-specific parameters were randomly comfort and the sizes of their proprietary and distributed within the ranges shown in Table I. general-purpose software networks. We simulated TABLE I DISTRIBUTION OF INDIVIDUAL-SPECIFIC PARAMETERS faculty choices using three cases: a base case, a Low High case illustrating increasing network sizes, and a Campus-specific 75 125 case illustrating the impact on campus technology network size (R) policies. In this approach, each of the 100 faculty General-purpose 175 225 members were assigned values for each element in network size (G) Individual Effort (C) 20,000 50,000 the equation. The mathematical choice problem was then solved for each faculty member, based In addition, there are also campus-specific factors on the individual parameter values. While the that were incorporated into the model, which were network size parameter represented people, the value of the equation as a whole is measured in all captured in the parameter from Equation 1. dollar-equivalent units. As is typical in economic This institutional support parameter, for example, modelling, costs and benefits are represented could represent the costs of providing technical numerically, however it is important to note that support and training, as well as direct financial these costs and benefits are not limited to financial payments or course release credits that some costs and benefits. Economists represent a broad institutions provided for developing course content For other variety of things in dollar terms, from happiness to utilizing educational technologies. institutions it could represent the monitoring the use the value of a clean environment; the costs and benefits in this model represent similarly broad of teaching technologies, and rewarding it directly conceptions of the value of software. This or indirectly through the promotion, tenure and approach was used to illustrate the choices that review process. These institutional incentives were were likely to be made by a varied population of incorporated into the scaling parameter for the We assumed faculty under varied assumptions. The approach campus-specific technology ( ). , the scaling parameter for the generalput the theoretical model in action by assuming that purpose technology was equal to one, indicating varying distributions of model parameters. that the campus neither rewarded nor penalized the A. Case 1: Base Case use of general-purpose technologies. The base case assumed that faculty members Benefits were calculated for each individual for differed with respect to the size of their campus- both campus-specific and general-purpose specific networks (R in Equation 1), the size of technology using Metcalfes Law (valuing the their general-purpose networks (G in Equation 1), network based on the number of users squared) as and in their level of effort required to learn indicated in Equation 1. Since each individual had technology (C in Equation 1). a different size network, the total benefit of each The variation in the sizes of the campus-specific technology was different for each faculty member. and general-purpose networks (R and G Net benefits for each individual were found by respectively) represents the number of people in the taking the maximum value of the campus or general faculty members technology network. The technology and subtracting costs. Costs were variation in network sizes reflected the represented by the individualized level of effort. connectedness of faculty; some faculty have a The results of the base simulation are shown in larger network of technologically proficient Table II. A total of 56% of faculty members colleagues than others. The variation in individual incorporated technology into their classes. While effort (represented by C) reflected faculty many (70%) of adopters utilized the campusIV. RESULTS

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specific technology, some others (30% of adopters) utilized another general-purpose technology.
TABLE II FACULTY CHOICES IN THE BASE CASE

campus could maintain adoption rates of the campus-specific technology, but that this would come at a cost. The campus could only maintain B. Case 2: Increasing Network Size adoption rates of the campus-specific software by In the second case we increased the size of the increasing . This could be done by increasing technology communities to which faculty belong. spending on tech support or incentive payments for The size of both the internal and external adopting the campus technology. community, represented by parameters R and G in V. DISCUSSION Table I, grew by 10%. This reflected the growing As the availability and complexity of general use set of users of both technologies. All other factors software systems increases, campuses should remained the same. carefully consider how these systems fit into future TABLE III campus technology plans. While most campuses FACULTY CHOICES WITH INCREASING NETWORK SIZE had a long and strong history of proprietary Choices % Proportion of adopters who used 45% campus-specific software programs, administrators campus-specific technology should carefully consider how network effects Proportion of adopters who used 55% might impact faculty adoption and craft policies general-purpose technology that explicitly account for these trends. Key policy Total percentage of faculty who 88% adopted either technology implications of our model included: Table 3 showed the results for this case. The exponential growth in value predicted by Metcalfes Law meant that the value of the generalpurpose software grew relative to the campusspecific solution. This value might represent an improvement in available content, the sharing of best practices for student learning, or best practices for the administrative use of technology, for example. The total percentage of faculty using classroom technology increased from 56% to 88%. But more strikingly the percentage of faculty who used the general-use technology increased from 30% to 55%.
C. Case 3: Campus Policies- Leadership and Support 1) Network effects are important: The idea behind these effects was that value does not just come from software alone; significant value could arise from a large user base. The number of videos posted on YouTube, for example, is extraordinary. This vast library of content provides suitable videos for nearly any course. That many faculty members have learned to use this technology outside of the classroom makes choosing this option even easier. Campuses that ignore general-purpose technologies will likely experience declines in system use, especially in relative terms. 2) Consider the available options: Faculty members face an ever-growing number of software and technology options for teaching and would not always adopt the campus technology. While many campuses find it easier to support only campus-specific software solutions, doing so limits adoption of general-purpose software. Since theory suggests that spending money on support reduces the facultys adoption costs, supporting only campus-specific solutions limits adoption of general-purpose solutions. Campus technology strategies that do not consider or support general use technologies might be missing opportunities and spending more than necessary on technology.

Choices Proportion of adopters who used campus-specific technology Proportion of adopters who used general-purpose technology Total percentage of faculty who adopted either technology

% 70% 30% 56%

value of using these technologies increases, campuses could affect faculty adoption choices either by discouraging the use of general-purpose technologies (for example by enacting formal policies discouraging their use), or by encouraging the use of the campus-specific technology. In our model this was done by altering the relative size of in Equation 2 b. In case 3 we showed that the

In the third case we examined how the growth of general-purpose software networks impacted the costs of incentivizing faculty to continue to use the campus-specific software. As the size of generalpurpose software networks grew, and thus as the

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3) Encourage exploring new technologies: Rather than fighting the trend toward general use technologies, campuses should gravitate toward these technologies, finding innovative ways to encourage their proper use on campus. Technical support and training resources could be directed toward these technologies, focusing on how they could best be used to foster teaching and learning. An area that deserves particular attention and focus was the development of collaborative technology communities that extended beyond the university walls. Textbook publisher websites which offered content represented a possible locus for this type of activity, although web 2.0 technologies that provided for user generated content and the sharing of ideas and experiences between faculty members must become part of these sites for them to enjoy the benefits of network effects. University support for Open Education Repositories might represent a strategy that leverages network effects while decreasing the costs that universities themselves bear for technology. 4) Include the use of new technologies in the campus tech support plan: As the user community size increases, the amount of available content improves, and the amount of support available from the user community also increases. As textbook publishers introduce increasingly sophisticated online offerings, the size of discipline-specific user communities will grow. Whether it is a publisher-specific set of online tools, or initiatives like Pearsons OpenClass (a free LMS system that multiple publishers will be able to design content for) or Mozilla Badges (an open source peer to peer learning platform), the size and scope of alternative technology communities is on the rise. Campuses should include these technologies in their support plans. 5) Get leadership buy-in: Institutional factors (leadership, pay, support resources) are important, but may not outweigh network effects. Many colleges provide stipends or course releases for the development of online content. Others subscribe to support services such as QualityMatters.org that provide peer mentoring and review of blended learning content. Regardless of the specific policies which are adopted, leadership is critical. 6) Offer training: Faculty members are also technology consumers outside of the classroom. Adoption decisions are driven, in part, by faculty comfort with technology. Providing more general technology training, for example, showing faculty how to upload a video to YouTube, can increase faculty comfort with technology which can carry over into the classroom. Showing faculty how technology can benefit them personally reduces the cost of adoption for classroom technology, and can help motivate faculty to explore the potential that technology has to offer.

The model and simulation presented in this paper illustrated how the theory of network effects is likely to affect faculty adoption decisions. The theoretical model demonstrated that if network effects were present faculty would shift their use of technology to general-purpose software. Campuses that ignored the value of general-purpose software were likely to spend an increasing amount of resources to promote and support campus-specific solutions. The model featured the concept of network effects; if network effects were present theory suggests that general-purpose software would ultimately be more valuable to faculty members and would be more widely adopted. The theoretical findings presented rest on the assumption that educational software does, in fact, exhibit network effects. In future research the model assumptions should be tested empirically. If network effects are present, we would expect to see actual faculty adoption patterns favoring generalpurpose over campus-specific solutions over time. To date this type of longitudinal study of faculty technology use has not been undertaken. Similarly the theory suggests that general-purpose software may also improve student learning (for example, because of the availability of a wide variety of tested resources). While more difficult to measure, a longitudinal study could also attempt to measure student outcomes as well.
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