The Insider’s Guide To Learning Management Systems’ Pricing Models

From eLearning Industry by Christopher Pappas

A Learning Management System is an invaluable tool of the eLearning trade. It organizes, stores, and delivers your eLearning course materials, and that’s just the tip of the Instructional Design iceberg; which is why choosing a LMS that offers the right features at the right price is essential. In this article, I will discuss Learning Management Systems’ pricing models to help you determine which solution is a good match for you and your budget.

The Top 6 Learning Management Systems’ Pricing Models

If you’ve been exploring the many LMS options that are available, then you probably have already discovered that the vast assortment of features, functions, and support services can make the decision process anything but easy. However, one of the key concerns that weighs on the minds of most eLearning professionals is the cost. Does the LMS fit into your budget, and is it going to offer you the flexibility you need? In this article, I’ll highlight the Learning Management Systems’ pricing model for both cloud and hosted options, so that you can narrow down your list of potential LMS solutions.

  1. Pay per learner (Cloud-based).
    Cloud-based learning management systems do not require any software downloads. Learners can access the LMS anytime, anywhere, as long as they have access to the internet. A pay per learner cloud-based Learning Management System’s pricing model is ideal for smaller businesses or entrepreneurs who are looking for a more affordable option, especially those who have an established audience base and know roughly how many learners will be accessing the system. In essence, organizations pay for the number of learners that access the eLearning course each month. For example, if 500 learners register for the online course the first month and the service charges 50 cents per user, your bill would be $250. The downside to this is that you typically won’t use all of the features included in the LMS, but you still have to pay for them.  Also, if your learner base suddenly spikes, this option can become quite costly.
  2. Pay per use (Cloud-based).
    Every LMS provider has a different definition of “use”. As such, this pricing model is a bit more flexible than the others, and even confusing in some cases. For example, one provider might define “use” as a module, while another considers it to be an online course. This is why it’s important to verify what they mean by “use” beforehand, so that you don’t end paying more than you anticipated. This option is best for organizations who don’t necessarily need a wide range ofLMS features and have a larger audience base. However, it’s difficult to know exactly how much you will be billed when all is said and done, as it greatly depends on the enrollment numbers.
  3. Pay per active learner (Cloud-based).
    Instead of paying for every learner who is enrolled, this LMS pricing model only charges you for the learners who are actually active in your online course. For example, if you have 500 learners enrolled, but only 300 are accessing the online course, you won’t have to pay for those 200 inactive learners. This is a great option for those who do not have a clear estimate of how many learners might actively attend the eLearning course, or have attendance rates that frequently fluctuate.
  4. Limited Time Licensing (Cloud or Hosted).
    Rather than paying per learner or per use, the limited time licensing pricing model involves an annual fee that organizations pay to use the LMS. No matter how many learners access the online course, or how many eLearning modules you create, you will be charged the same flat fee. This model can also be on a monthly basis, in some instances. When the licensing fee time runs up, you will have to pay to renew it in order to continue accessing the online course. It is ideally suited for organizations that have large learning audiences and online course libraries, or those who are planning on expanding rapidly, as it is a more cost-effective option.
  5. Perpetual Licensing Fee (Self-Hosted).
    When most people think of installed LMS solutions, this is the pricing model that springs to mind. In this case, the organization pays a one-time flat fee that covers every aspect of the product. They download the software, host it locally, and can use it for however long they like. There is no expiration date, and in most cases upgrades are included as part of the deal. This is typically the best option for larger enterprises that prefer to own the software outright, rather than having to worry about paying annual or monthly fees. In some instances, the provider may even host theLMS for an extra fee, if the organization does not want to host it on-site. If you are planning on sticking with the LMS for an extended period of time and have a vast learner base, then this may be the way to go.
  6. Free Learning Management Systems.
    Last, but certainly not least, we have the free options. There are a variety of learning management systems that are absolutely free to use, particularly those that are based on anopen-sourced model. You do typically have to a bit more tech savvy in order to use these platforms, but the price is definitely right if you are familiar with the design software. Organizations working with a tight budget and those who are willing and ready to maintain the system on their own, or even hire an LMS specialist to get you started, may find the a free model is the best choice. However, you should bear in mind that these options don’t come with support services and the upkeep expenses can become quite costly.

Now that you know the ins and outs of LMS pricing models, you may want to compare the LMS features for the solutions in your budget bracket. What model offers you the accessibility and support you need, and a pricing structure you’re comfortable with?

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