Why Pay-Per-User LMSs are Predatory

saas-imageIf you have ever shopped for an ideal learning management system, you are very familiar with the pricing models out there.  The overwhelming majority of LMSs incorporate a software-as-a-service (SaaS) model, which on the surface seems like a fantastic deal.  I have always been luke-warm to the SaaS model, for a variety of reasons.  Sure at first there is saving potential, but at the same time, you are essentially agreeing to pay for forever…and ever.

I dunno, something about that just doesn’t seem right.

To make matters worse, not only do you have to pay forever, many of these plans are driven by the number users (sometimes registrations) of your LMS.  At first glance this seems reasonable.  One would think that the more users on a network, the more “computing power” is necessary to effectively deliver the content hosted on the LMS… but is this really the case?

No. It’s not.

Consider for a moment that there are often WordPress based membership sites, or even forums, that have hundreds (even thousands) of members that are hosted on shared hosting like HostGator.  No need to charge the owners/administrators of these sites that have extra membership, because truth be told, it doesn’t matter how many members there are.  In reality, what would be more taxing on a hosting network are any elearning courses published in Articulate or Captivate (as these files are generally quite large).

Let’s look at some alternatives.  If you use a platform like Moodle or LearDash’s WordPress LMS, then you can get started with your own LMS with for the price of shared hosting (~$6/month).  With either piece of software, you can have hundreds of users access your courses – and since LearnDash is built on WordPress, adding features to your LMS takes about 10 seconds.  Again, no price increases necessary, at least not until you need some more storage or a few more features (where your total cost will rise from about $6/month to $10/month).

We have become de-sensitized to the SaaS model.  It has become so common that we forget to ask the basic questions, like if it’s cost effective.  You’d be surprised what you could accomplish with a simple hosting account and a flexible, extremely supported open-source platform like WordPress. Not only do you get to dictate the features, you have a robust LMS that doesn’t increase in price because of your user base.

If you’re searching for an LMS, decide if the SaaS model fits your LMS needs.  If you’re not interested in paying high monthly fees based on users or expanded features, then know that there are other options out there available to you.

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About the Author:

Justin Ferriman is the co-founder and CEO of LearnDash, the WordPress LMS trusted by the world's leading organizations, such as the University of Michigan, Digital Marketer, WPEngine, and Infusionsoft. Justin has made a career as an elearning consultant where he has implemented large-scale training programs for Fortune 500 companies. Twitter | LinkedIn

2 Comments
  1. Justin, thanks for the article.

    I see the competing models as something like the lease vs. buy. When I purchase something, that’s it. Few improvements occur until I choose to upgrade at additional cost. In the rent/lease model, I am always using the latest features.

    With a mature, commodity product, sure, I will buy, hoping to get the best price. But in a dynamic, highly-competitive market, like LMS, it makes more sense to me to stay up-to-date and take advantage of the fast improvements.

    Jud

    • Kirk

      If it’s open source and you have a competent IT staff in xXML, HTML and CSS there are no real hurdles to adding features. Even if you want to add a “module” type feature that may require lower level coding, these are generally available in the open source market arena as well, free or otherwise. But you won’t be paying for upgrades or add-ons that are often bells and whistles with marginal value — as the author states…forever and ever.

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