ESC Grants IBM Right to Market School Software
Education Systems Corp., a fast-growing Sorrento Valley publisher of “learning systems” software, has granted International Business Machines Corp. the non-exclusive right to market its products to schools across the country.
Because of IBM’s marketing clout, the agreement should give a significant boost to ESC’s sales, which are already growing at a high rate, ESC Executive Vice President Carl Zeiger said Wednesday. The agreement is designed to encourage schools to buy IBM hardware and ESC educational software as a package, Zeiger said.
ESC is retaining the right to market its software itself to schools, and the company has marketing arrangements with two other computer manufacturers, Apple Computer and Tandy. But IBM is the first computer company to be given the right to sell ESC software directly.
ESC makes curriculum software sold in tandem with personal computer networks that contain more than 1,800 lessons for students from kindergarten through eighth grade.
ESC, a closely held company founded in 1984 by two college instructors, has placed its software in more than 350 schools nationwide, up from 30 schools this time last year, company officials said. Schools typically license ESC’s software at a cost of $36,000 per year, paying $60,000 for a computer network of up to 30 machines.
ESC said its sales increased to $8 million in 1987 from $500,000 the previous year. ESC President John Kernan said in a statement Wednesday that sales should increase to between $25 million and $30 million this year. The company is not yet profitable but will begin turning a profit later this year, Zeiger said.
Zeiger declined to estimate what impact the IBM agreement could have in additional sales, saying only that “IBM is making a strong push in this market.” ESC’s product will be sold out of all of IBM’s branch sales offices, he said.
The company has attracted a total of $15.5 million in venture capital from several investment firms including the investment arms of Bank of Boston and Chemical Bank. Other investors include Accel Ventures of San Francisco and GeoCapital of New York.
ESC’s full-time employment has increased to 180 from 100 employees last July, Zeiger said.
