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What Learning Management Software Costs

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Update 12/14/2016: Times change, and so do prices. We’ve updated this article with the latest information and more tips on how to judge your own budget.

Have you heard the old joke of the man going to pick up his car from the mechanic?

His friend asks him, “Is your car alright now?”

And he replies, “Yup! I was worried the repair shop might try to rip me off, but the mechanic said all I needed was $60 of headlight fluid!”

what LMS costs

Just like with car repairs, you should know ahead of time how much learning management software (LMS) products are supposed to cost before purchasing them. We highly recommend people take the time to research different price points before committing to buying anything.

Unfortunately, there’s no one simple cost structure when it comes to LMS pricing. Besides the fact that there are several different pricing models, your specific requirements are also a big factor in how much you’ll pay. However, it’s important to know the various pricing models so that when you get quotes, you can compare apples to apples.

Here’s a breakdown of how most LMS providers charge for their software.

Pay-Per-Learner

This is the most common pricing model in which you pay a flat fee per learner (regardless of how much training they’re receiving). Additionally, there’s often a one-time setup fee.

Price Range: Around $5/user/month, but prices go down as you scale, to as little as $0.50/user/month for large companies with many learners.

LMS with this Pricing Model:

Pay-Per-Use

This can mean different things depending on the LMS provider, so you’ll want to make sure you understand whether they charge a fee-per-user-per module, fee-per-course-per-user (this is very common), a fee based on elements or materials delivered per course, or a fee based on number of class attendees.

Price Range: Depends on the specific model and your volume, but expect anywhere from $0.50-$10 per learner per course.

LMS with this Pricing Model:

License Fee

This is either a one-time, upfront cost to access the software, or it is a fee to access the software for a specific period of time (monthly, annually, etc.). There may also be an annual support fee.

Price Range: Less than $500 to tens of thousands of dollars (e.g. $20,000 annually).

LMS with this Pricing Model:

Bonus: Other Pricing Models

Additional pricing models you may run into include Unlimited User Flat Fee (ex. Topyx) and Pay-Per-Course (ex. CourseWebs). These could also be combined with one of the above models (i.e. Pay-Per-Course with an additional one-time license fee).

Finding The Best Choice For You

How can you determine which of these pricing models is the best one for you and your learners? There are three things to consider:

  • Your number of learners
  • How often you’ll be using the software
  • How long you’ll need the software

Are you trying to train five users or five hundred? You might think that fewer users makes a better argument for a pay-per-learner system, but that’s not necessarily true. Depending on the pricing plan, some LMSs may give you more bang for your buck with a higher user base. Don’t just write off a pay-per-learner software because you have a lot of users.

Is this system going to be used every day? Quarterly? Yearly by some employees, weekly by others? Figuring out how often the software will be assessed will help you determine how robust it needs to be. This is vital in figuring out a pay-per-use price. Keep in mind that even if your learners will only be accessing it on occasion, if it’s for a mandatory training that might mean a massive price tag once or twice a year. For a small business, this could be an issue.

Updates are the third issue. Do you plan on keeping the same LMS for a long time, or would you be more comfortable with flexibility? Buying a license for a single software is a good choice if you plan to stay the course, but it could lock you into a software you feel uncertain about if you don’t do your homework first.

What Prices Can I Expect?

Now that you understand how the different pricing models work and what you should be thinking about in comparing them, you’re probably wondering what prices you should have in mind. What’s considered affordable, and what’s considered expensive? If this is your first time buying learning management software, it’s a reasonable question to ask.

Feel free to peruse our updated list of most affordable LMS options. Each entry has a dropdown that shows reviewer ratings, features, and how much you can expect to pay for it. It’s just about the most helpful tool you’ll find for judging LMS affordability.

Others?

What cost drivers and pricing models did I miss? Is there anything else you would recommend when considering a budget for learning management software? Add your thoughts in the comments below!

Looking for Learning Management System software? Check out Capterra's list of the best Learning Management System software solutions.

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About the Author

Halden Ingwersen

Halden Ingwersen writes about HR and eLearning at Capterra. She’s a graduate of Agnes Scott College and a TEDx presenter. You can follow her on Twitter @CapterraHalden, just don’t get her started about her zombie survival plan.

Comments

Hi JP and thank you for a great post,

If anything I would probably mention the pricing models of Moodle and the like where the base service is free but partners of Moodle provide services related to the platform.

Also I am a little curious about the price range of the different pricing models. I would guess certain licensing contracts could actually go up to five-six digits and that some LMS providers’ pay-per-learner would charge more than $5/user/month?

Thanks again!

Where does Google fit into the picture? (From an education perspective, ie buying a District based Google domain?)

Just talked to someone at Desire2Learn. For up to 100 users, it is $100 per user. Of course, costs go down as numbers go up.

Thanks four your post, very interesting to see the different models.

I heard of Coursepath and that they allow an unlimited amount of users and just limit the number of courses you get.

To me it sounds interesting especially for bigger companies with changing user numbers.

Hope that helps

Steve

I often see pricing well over $5/user, especially with smaller, industry specific LMS. But often this pricing includes access to industry specific learning content.

LMS systems tend towards the pay per use/user/month tied to that user. What I would like to know is can you switch it around – say sit a course for a certain timescale and then kill off that intake and re-issue those licences to a new intake and only pay for the in use licences. This could be more advantageous for our proposed use. Anyone any ideas on whether any of the LMS platforms (above – or others) allow use like this? CoursePath option is worth looking into I think.

Hi JP-

Very comprehensive article here covering the major pricing models used by many LMS solutions today.

Perhaps another way to ask this question is: “What kind of server resources will I need?”

There are inherent differences in initial pricing for cloud LMS options and on-premise solutions, but the underlining cost-driver is how much hosting storage, memory, and bandwidth your learning program requires.

If you are using a hosted solution then they will often charge you based on number of active users and/or course enrollments. This is because their price-per-user is designed in such a way that they can allocate the necessary hosting for your LMS so that it performs optimally (and of course leaves some room for profit for the LMS company).

When you use an on premise LMS like Moodle or WordPress, then you are responsible for procuring hosting. This can range from $10/month for small learning programs to hundreds (even thousands of dollars) depending on the number of active (simultaneous) users on your site.

For very large programs you will save money by self-hosting. But then you have to be a little more hands-on with the hosting environment you choose. For cloud solutions you pay extra and they take care of that part.

Kindly,
Justin
Co-founder, LearnDash
https://www.learndash.com

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