BEST B-SCHOOLS

B-School News	March 8, 2000

At a time when prospective MBAs demand top-flight professors and a school with a well-respected name, B-schools are hustling to deliver both. Some negotiate high-profile corporate partnerships. Others bring in dot-com leaders to wow their classes. The daring ones pursue alternative mediums -- such as the Internet -- for delivering their coursework worldwide.

So it made sense, when the University of Arizona business school had a chance to start a distance-learning program, that its administration listened. A year ago, TeleSuite Corp. in Englewood, Ohio, pitched Arizona on offering an MBA to students in two locations using its teleconferencing technology. "One of our shareholders said he knew people [at Arizona] who would like [our technology]," says David Allen, TeleSuite's CEO. By last October, TeleSuite had built the school a $250,000 lecture hall that's optimized for distance learning. The school pays $10,000 per month for connection fees, maintenance, and upgrades.

The partnership with TeleSuite is part of Arizona's strategy to lift its B-school into the top tier of MBA programs worldwide. Aside from getting a state-of-the-art facility, the university also is extending its reach. On Mar. 15, it will inaugurate a distance-learning curriculum 1,750 miles to the north, in Silicon Valley. "It's an area where the economy is going great guns," says Mark Zupan, dean of Arizona's Eller College of Business & Public Administration. "People don't want to leave their jobs [to take classes], and we have a top-ranked [management information systems] department, so it seems like a logical place to build a link to." Classes for the first group of up to 42 students will be held at a TeleSuite facility on 3Com's Santa Clara (Calif.) campus.

TRACKING NET BUCKS. The university also gets a shot, however long, at future riches: TeleSuite will give it 100,000 shares of a tracking stock in TeleSuite that will be created if and after TeleSuite itself goes public. The first batch of Arizona MBAs in Silicon Valley also will get tracking stock when they graduate in two years -- which could help them defray their $20,000 a year in tuition.

What TeleSuite gets in return is an endorsement of its technology from a major school -- plus plenty of help in refining its product. "The students are helping us determine which direction the technology should go," says Allen. To make that happen, the company will hold focus groups and will monitor class discussions. If TeleSuite sells itself well, they stand to gain a chunk of the distance-learning market, which is valued at $7.1 billion by 2002, according to International Data Corp. Allen says he'll be happy with $30 million of that projection.

Among the other potential advantages, Arizona's Silicon Valley program could help boost the school's standing among academics. Arizona's B-school professors are also being promised some of TeleSuite's yet-to-be-issued tracking shares, which Zupan figures should add an additional incentive. "The [best professors] will go to the schools with the best [compensation] packages and the most attractive options," Zupan says.

CYBER-IVY. Arizona's e-classroom is equipped with hidden video cameras -- some tucked into flower arrangements -- microphones, and wall-to-wall screens. The results are neat. Professors lecture students in the Tucson classroom, as Silicon Valley students look on from their seats in California -- or a speaker addresses the Silicon Valley class as Tucson students look on. MBAs in both places see whoever is addressing the class. They can also see their classmates: A Tucson student who wants to challenge a point made by someone in Silicon Valley can simply look or point at the person's image on the screen to direct a comment.

Experts are curious about whether TeleSuite's technology is sexy enough to catch on. "I've always believed that learners like to go somewhere to learn," says Howard M. Block, managing director of education services for Bank of America. "They want to sit with other professionals to get a feel of ivy. There are enough people like me who don't want to sit at their desktop to take a course after 10 hours of work." Still, he says, the Arizona program is "a step forward in the evolution of distance learning."

The TeleSuite technology has already caught the attention of other B-schools. Richard L. Schmalensee, dean of Massachusetts Institute of Technology's Sloan School of Management, visited Arizona's e-classroom last month. "I was more impressed than I thought I would be," he says. He adds: "It's clear that technology will change education, but it's not clear what models will win." Sloan School is exploring distance-learning options, but it hasn't announced a strategy.

DEANS' LINK. Duke University's Fuqua School of Business, a pioneer in learning via the Internet, is working on a project with TeleSuite, too. Nevin Fouts, associate dean for information technology, says the school will "use the technology to enhance its global infrastructure." For example, a conference suite in Durham, N.C., will link the dean of the U.S. campus to the dean of Fuqua Europe in Frankfurt. "Deans can walk into a private environment and talk on a regular basis." That should help them manage the school's Cross Continent MBA, which will launch in the fall of 2000 in the U.S. and Germany. For now, Duke's distance-learning classes will continue to alternate between face-to-face local lectures and Net courses produced by Los Angeles-based Pensare.

If Zupan has his druthers, Arizona will soon offer its distance-MBA program in underserved markets such as Houston and San Diego. Also on the drawing board is a TeleSuite-enabled MBA program combining students and faculty from the Eller School and from neighboring American Graduate School of International Management (Thunderbird) in Glendale and Arizona State in Tempe. Students would earn a degree from the school where they complete the most credit hours but get access to the expertise that each school offers. "We're all top-35 players" in the B-schools arena, says Zupan. "If this allows us to be pioneers, maybe five years from now we're all top-20 players."

Arizona is still recruiting distance-learning students but already is assured of breaking even. To date, 10 students have signed up for the California class and 16 in Tucson. Timothy Aiken, a project leader in engineering for Extreme Networks, based in Santa Clara, enrolled because he's interested in entrepreneurship. He has degrees in computer science and computer engineering, but he says, "I need a good background in business." His only complaint is that he has to go to 3Com to study: "They're the enemy to us," he laughs.

TeleSuite's Allen plans to expand beyond education eventually. He would like the technology to be used in foreign diplomacy. And he envisions a time when patients may visit medi-suites linked to specialists across the globe. For now, he'll have to settle for advancing the art of distance learning in ways that may force B-schools to rethink their strategies yet again.

By Mica Schneider with Nadav Enbar in New York



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