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February 27, 2010 — Chattanooga, TN — Gasps of "wow" echoed through the conference room as Ken McElrath presented his new software as a service to school officials at the Chattanooga Girls Leadership Academy.

One astounded administrator poked repeatedly at her associate's arm.

"Quit beating on me," her associate scolded.

"But I'm so excited," she responded.

Mr. McElrath, CEO of Skoodat, builds software for schools that resides not on hard drives and servers on the premises but in secure "cloud" data centers elsewhere accessible to anyone with clearance and an Internet connection.

Astonished reactions aren't new to him, especially when he tells officials he can slash their costs by 50 percent.

"We allow schools to stay out of the information technology business and focus on the business of building great schools," said Mr. McElrath, an adjunct professor in communication design at Covenant College.

Instead of separate federal, state, and local systems with sometimes contradictory data sets, Mr. McElrath claims Skoodat allows everyone to work with a single set of real-time data entered by teachers and administrators. This allows universal access to each student's progress, from attendance to college preparedness, he said.

Software like Skoodat would have faced opposition from entrenched elements in the past, but changing economic conditions have begun to open doors, Mr. McElrath said.

"You've got a perfect storm in education caused with shrinking budgets from the recession, while you have a huge amount of stimulus money tying teachers' pay to how well their kids perform," Mr. McElrath said.

Frank Pazera, Skoodat's CFO, said despite having a lead over their competitors and a product that shares security software with the U.S. Department of Defense, convincing schools to use Skoodat's cloud computing model isn't going to be easy.

"There are battles ahead, but we're battle tested," Mr. Pazera said. "It is a monumental task, but the upside is tremendous."

Besides the obvious technological leap from servers to software, Mr. Pazera also worries about school politics.

What is Skoodat?

Eliminates the need for servers in schools, with student records stored in secure data centers administered by Force.com
Enables parents, teachers, administrators, officials, and even students to access customizable data and reports
Gives administrators early warning when a child falls behind
Permits consolidation of federal, state and local daa systems
Allows schools to spend more on education by eliminating server rooms and reducing IT budgets
Source: Ken McElrath, Skoodat CEO

"Probably the company's biggest challenge right now is regarding old guard, new guard, political dynamics, and all of that type of stuff," he said. "But when you actually sit down and really understand the power and the capability of having real time information to make decisions, it's really groundbreaking for educators."

He credits the company's progress to a "strong angel investor," and said the company is in the process of attracting institutional investment and venture capital.

Maxine Bailey, co-director of the charter school, said she felt energized following Skoodat's software presentation.

"If you know anything about what's going on in education, having access to rich deep data in real time is critical for administrators and teachers to track student progress and change what we're doing," she said, "Skoodat's principals are very clever. Clearly they've done their homework."

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