Training Technology

The Complete On-Premise vs Cloud LMS Comparison

Published by in LMS

The first step to being a functional adult is accepting and embracing the fact that you are not a special snowflake.

Nobody likes that. Nobody wants to hear it. Yes, you are unique. So is everybody else. It’s kind of depressing when you think about it, since many people (maybe all people) want to feel like there’s something at least a little bit special about them. And sometimes we are. But the times we’re told this are few and far between.

Luckily, this is one of those times!

Your business has unique needs. Someone else’s magic bullet isn’t necessarily going to work for you. You can’t go into your software search looking for the most techie software with the shiniest bells and whistles while ignoring substance.

There’s a lot to consider when buying a learning management system (LMS) does it need to be SCORM compliant? Is it replacing an existing learning management tool? Should it be gamified? Are you doing your course authoring in-house or getting your content elsewhere? With so many questions, it’s hard to know where to start. So I suggest starting with the most basic spec hurdle: cloud vs. on-premise hosting.

Cloud tech gets a lot of limelight. That makes sense, since a study run by Capterra last year indicated that 87% of LMS buyers invested in web-based options instead of installed or on-premise options.

But, as anyone who wasn’t well-liked in high school will be quick to tell you, just because something’s popular doesn’t mean that it’s the best option out there. Cloud has its advantages, but so does on-premise. Weighing your options and seeing what you need will clear up this step and make your life going forward that much easier.

Let’s break it down.

Cloud LMS

Cloud, also referred to as “online” or “software as a service,” is where just under 90% of new LMS software users decide to host their software.

Wait, hold up for a second. What is the cloud? It’s that magical place where you save your stuff but where does you stuff go when you save it remotely? Is your software sitting in a physical location somewhere out in the real world?


If videos aren’t your thing, the takeaway is simple: cloud hosting means that your software (and google docs and dropbox documents…) are housed in warehouses full of hard drives. They still have physical storage, it’s just physical storage you don’t have to take care of. Now that we’ve got that cleared up, we can have a look at cloud learning management systems are so popular.



The number-one upside to online software storage is how wonderfully flexible it is. In fact, if you look around the internet for reasons online software is awesome, many of the points—the cloud is available online, it can be accessed anywhere with internet, you can access it from multiple devices and OS’s—will boil down to its flexibility.

Online software allows anyone to access the material anywhere, so long as they have an internet connection. It means that your users can get to your LMS regardless of what platform they want to use. It means that your users are more likely to be able to get your material on their mobile devices. It means that your learners don’t need to worry about lacking their information at home or in the field. It means convenience that an installed system simply cannot provide.

Probably where all tech is going

Remember that statistic I keep citing? About how 87% of learning management software bought last year was cloud-based? I keep citing it because it’s completely insane. That’s an amazingly high number! It means that almost every single software in the LMS market is trending to be cloud-based!

In fact, if you look up installed LMS software, you’ll find that many of the offerings are an either/or. Very few of them are installed-only. The software updates can be cheaper and more frequent, and security is easily adjusted. That’s a sure sign of an eventual phase-out.


May not work for older tech

I’m assuming, that you either have fairly modern technology in your office or that you’d very much like to have modern technology. This warning goes out to those in the second camp.

If your business environment is experiencing some technological arrested development, because of the nature of the work, the open-mindedness of the staff or bosses, budget restrictions, or some other reason, you simply may not be ready for cloud LMS software.

Here’s how to tell: if Google Drive (a cloud-based document storage system) would be a hard learning curve to the point of refusal to use it for the majority of your office peers, hold off on the cloud for a while. At least update your hardware first.

Downtime is possible

Every computer has the potential to crash if you overload it. In the case of cloud-storage warehouses, crashes are usually handled as quickly as possible. However, every system has the potential for downtime, even if it’s planned and for maintenance.

If you don’t like the loss of control that someone else managing downtime can create, consider sticking to your own hard copy of your software. No matter how quickly a host tries to handle their crashes and downtime, you’re still stuck waiting until the software solves their problems on their end, whereas with on-premise, you can troubleshoot your own issues. In cases where malware is involved, you’re safer using your own downloaded software than running anything online.

The world is a little scary for cloud storage right now

If you’re in the United States and you’ve been watching the news recently, you might have notice that there’s some legislation being passed in regards to internet privacy.

While it’s entirely possible that this legislation will get weed whacked before you ever need to worry about it, you should still be aware that some time in the future, internet service providers may be able to record and sell your internet use data. For an LMS, this means that your ISP may have access to user records, course content, and any other sensitive school or business information you use in your training. Depending on your company, that could mean clicks that reveal credit card information, HIPAA data, proprietary grading information… all potentially up for sale.

Odds are that even if all this comes to pass, your software vendor will take care of these issues for you, but if you’re working with hyper-sensitive data, it might be enough reason to stay out of the cloud.


Looking for a strong cloud-based learning management software? We got that. We got a lot of that, as a matter of fact.

On-Premise LMS

If it’s not the cloud, what is it? Down to Earth, perhaps. Some people might want you to think on-premise software is more than down to Earth—that it’s fully dead and buried. And, yes, I know that I was just touting stats that would suggest that very statement. That said, there really are cases where installed software is superior.


Quicker fixes

Got a problem? If you have your own IT team, problem solved. You have a lot more control over when and how your downtime and maintenance happen when you locally own your own software.

And, though the gap has narrowed significantly over the years, you have a little bit of additional security in handling your own software on-premise. There’s less of a chance of your server being hacked and losing your data along with everyone else’s. That small difference that means a lot to security-minded businesses.

No internet needed

Internet not always reliable at your job? Maybe you find yourself or your employees often on the road or working from areas that lack steady internet connections, such as many field service or construction-based jobs. Or maybe you happen to be in a location where the internet goes down frequently, if you had it to begin with, like park service or rangers. And you still have work to get done and training to complete, internet or no.

This is exactly when an installed learning management system is helpful. It keeps your work from vanishing or pausing just because the internet decided not to play nice today.

Long-term savings

The initial startup costs of owning and operating your own software on-premise is a big higher. However, much like owning your own home or car, over time you come out ahead of the “renters.” In the long-run, hosting your own software on-site can save you. Though keep in mind that both methods have their hidden costs.


Kind of a dinosaur

I’ll admit it. Even though installed software isn’t dead yet… it isn’t exactly a spry young thing anymore, either. And, yes, the fact that many of the on-premise software offerings out there can either be installed or hosted in the cloud is a sign that, sooner or later, the vendor will switch to being cloud only.

Though even when that does happen, there are sure to be some software that hang on, taking advantage of a loyal niche market, a market that might include you.

Eats up space

If you have a hefty software, it’s going to take up a hefty amount of space. If this is an LMS that’s going to be run on computers that also need to run other software, you might want to consider investing in an external hard drive to keep space clear and keep your hardware humming smoothly. Your options for external hard drives are varied, and many aren’t expensive.


Looking for a solid on-premise learning management software option? We have that list. Yes, I know, I love it, too.

Cloud LMS or on-premise: who’s the real winner here?

That’d be you, no matter what you pick.

What works best for you may not be the most popular. But don’t worry about popular! Worry about who you are and what your business needs. The right choice for you is what works.
What type of software do you go with? Do you think I’m too optimistic of on-premise learning management solutions or is it just what you need? Tell me about it in the comments.

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

About the Author

Halden Ingwersen

Halden Ingwersen

Halden Ingwersen is a former Capterra analyst.


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