In recent days, we have heard President Obama lecture college presidents about cost control, and we have seen a vaunted Stanford professor quit to pursue teaching students by the millions online — at minimal cost.

Here, to connect the dots, is a guest post from Abir Qasem, a computer scientist at Bridgewater College in Virginia, and Tanya Gupta, a senior resource management officer at the World Bank.

Tanya Gupta (Tanya Gupta) Two recent events presage higher education’s future. First, President Obama’s University of Michigan speech about cost control in higher education and second, Sebastian Thrun’s Udacity start-up.

There is an immense pressure to do something about the prohibitive cost of higher education, immense enough to be the first key topic of the President’s post-State of the Union tour at the University of Michigan. With this speech, the President brought the 500-pound gorilla into the national conversation. In the 21st century, he said, “higher education is not a luxury — it’s an economic imperative,” and institutions should “improve affordability” and ensure “higher rates of college completion”.

For students, it is not always clear that the return on their investment will be positive, as a degree no longer guarantees a job. If education is both expensive and has a low ROI, the demand for traditional education is likely to fall.

And then there is Sebastian Thrun, a tenured professor of computer science at Stanford who, a few days ago, announced that he had given up his teaching role to found Udacity, an education start-up that would offer low-cost online classes. Thrun was inspired by the success of the online AI course he offered along with his colleague Peter Norvig to bring “education” directly to the consumer. Thrun said he was motivated in part by teaching practices that evolved too slowly to be effective. With this move Thrun replaced the prohibitive cost of a “middleman” (the College) with technology.

When Christensen wrote in an earlier College Inc. blog post, “Technology and innovation make it possible to grow our way out of financial trouble and organizational resistance to change,” he could have been writing about President Obama’s imperative to cut the cost of education and Thrun’s (and others’) initiative to overcome resistance to change.

The stars are aligned for this new disruption to emerge — whether you call it “the unbundling of the university,” the “modularization of education” or “eliminating the middleman” (the College). Steve Jobs said, “You can’t connect the dots looking forward; you can only connect them looking backwards.” However, when some of the bread crumbs start to line up, it is an indication that a change is coming.

The bread crumbs ? They are Sal Khan’s Khan Academy, MITx, and most recently, Thrun’s move. With Khan Academy, Sal Khan made available, free of cost, 2800+ educational videos to the whole word, all made in his own unique style, the way he wishes he had been taught. MIT Open Courseware (OCW) makes available MIT course content for free on the Web. MITx goes one step further and offers an online learning platform that will, in addition, feature interactivity, online laboratories, student-to-student communication and individual assessment, and will offer a certificate of completion awarded by MITx. MITx is based on an open-source, scalable software infrastructure. It will be free to use and “highly affordable” for those who wish to get a credential. Many other Khan Academies and MITxs are emerging. Academic Earth offers free access to video courses and academic lectures from leading colleges and universities. Udemy offers courses online, and Code Academy teaches you how to code online.

So then, what exactly is the change? For thousands of years now, the university has been the middleman of the higher education system. The university provided the needed infrastructure, the branding, and an easy route to a white collar job or graduate school. In return, students had to agree to taking courses that the faculty thought were needed. The courses could be recommended because they would help the student understand the subject, or for other completely unrelated reasons (to make them a “well rounded” person, or to give a faculty colleague some students to teach). Faculty, on the other hand, did not have to look for students, could bask in the reflected glory of the university name, and still had a regular paycheck. Accreditors were the accountants of academia, making sure that “quality” was maintained.

The astonishing pace of technology in the last few years has changed the landscape of academia completely in several ways:

(1) There is an excess of information available. Instructors are no longer required to be a source of information. Rather, they curate existing information.

(2) Students today want practical skills that they can use to get a job, and not necessarily a degree. Even if they don’t use the same words, students are looking for outcomes (e.g. actionable skills, and not just knowledge about a subject).

(3) Infrastructure, at least in the West, has improved to the extent that anyone with a video camera and basic tools can design, deliver, and take payment for courses.

(4) Students are no longer just your typical 18-22 year olds. They can be a mom who wants to get a certification, a soldier in Afghanistan, or an office worker in Hanoi. Educators need to be flexible about the place, time, format and frequency of courses.

(5) Technology has eliminated a lot of the manual work teachers (grading) and administrators (registration) used to do.

(6) Students want short courses that utilize all the technology available (multimedia, social media, games).

This has created a situation where technology is freely available and can let anyone teach or learn: students who want flexibility, teachers who can now become one-man or -woman universities. Yet many schools are still stuck in the past.

Radical changes in educational content and delivery mechanisms will lead to an unbundling of the university as we know it. The natural question then becomes, What will it look like? We cannot say for sure, but we can at least outline some possibilities.

We think it is possible that education will go the “Amazon route” or the “eBay route.” Under the Amazon model of education, the focus will be on service delivery. One or two large providers will emerge from the rubble and provide courses much as Amazon does. Courses will be in the millions, with different providers, some celebrities (the Stephen King of lecturers) and some not. Pricing will thus be equally complex. Professors and courses will be rated, and you will be able to see the top 100 courses that help you learn to program, for instance. Of course, you will have a “wizard” that will help you figure out exactly what you need. Or we could go the eBay route, where courses will be auctioned off. In this model, too, you will have ratings of courses and providers. Delivery will take place once you have won the auction.

In both models, anyone can be a seller or buyer of education. However, it will only be through the ratings that you can establish a history of being a good student or teacher.

Which model wins? We have no idea. However, the first platform that allows a student to pick any course from a huge variety of courses within his price range or a quoted price, and customize it, will have an advantage.

How will credentialing take place ? We think credentialing will go away, as the rating system will determine quality.

How will grades be determined? This one is more difficult to answer, as an outcome-based education may not necessarily rely on grades, and outcomes are difficult to measure in an absolute way.

What are traditional colleges to do? They cannot go completely online tomorrow. Christensen said that one innovation traditional colleges could make is to offer a few “gateway” majors, and then use technology to personalize and individualize teaching on specific subjects. Christensen notes that Western Governors University only offers four degrees and hasn’t raised tuition in five years. We think another possibility is that you can have a group of universities collaborating (“the Ivies” or the “East Coast”) and allowing students to pick professors at any university in the circle and dictate a combination of in-person/online courses.

In any case, we think that the Arab Spring of higher education is already starting to take place, and will change the face of higher education in fundamental ways. Whether it is an Amazon model, or an eBay model, or some combination of both, we’ll have to wait and see.

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Guest post: An ‘Arab Spring’ of free online higher education