Open Source LMS vs. Cloud-Based LMS: Which is Right for You?

Jill W.

Choosing the right LMS for your organization is a months-long task that requires a significant investment of time and money. As you're comparing LMS solutions, you will encounter two different types of LMS - open source and cloud-based. What are the differences between these two options, and which will be most cost-effective?

This article will help you understand the different pricing models, and decide which option - open source LMS or cloud-based LMS - is the best for your organization.

1. Open Source LMS

1. 1. What is an Open Source LMS?

If you are in the market for a new LMS, or have even done some basic research on learning management systems, it's likely that you've come across open source learning platforms like Moodle.

With open source software, the original source code is made freely available and may be redistributed and modified by a collaborative community, where users have access to the source code and can customize it to meet their specific needs. According to a Kineo survey, 40% of respondents identify flexibility as the main reason to choose an open source solution. Specifically, they valued the ability to customize the design of the LMS and the chance to add new features.

1.2. Open source LMS pricing models

The majority of open source LMSs, like Moodle, are free or at least freemium; the basic package is free and you can purchase additional features.

Open source platforms are scalable, allowing you to size up or down as demand within your organization changes, without incurring licencing costs. Aside from that, however, just about everything else you want to do with open source software will incur a cost.

1.3. Implementing an Open source LMS

With an open source LMS, you'll have to invest a lot of time and effort to build your own functional LMS. Open source LMSs requires different applications, and a highly invested IT department that will be responsible for a lot of the administration and maintenance.

Open source LMSs come with associated costs like:

  • Server set-up. You will need to configure a server based on the number of expected users. To choose and set up an appropriate server, you'll have to rely on an external IT vendor.
  • Hosting fees. IT professionals need to host the open source software on an existing server or on a cloud server.
  • Customization. This includes adding or removing features and changing the appearance of the LMS to match the organization look and feel.
  • Gathering a dedicated team. To successfully implement, manage, enhance and maintain an open source LMS, you need to gather different protagonists: stakeholders, IT professionals, HR professionals, a group of testers, dedicated LMS administrators and learning content developers. If you don't have those resources in-house, you'll have to hire external vendors to complete the tasks.
  • Ongoing support, enhancements and maintenance fees. To maintain usability, open source solutions require upgrades, stress tests, debugging, and support.
  • Back-ups. If the learning management system experiences a failure, a proper back-up plan is essential to identify how the data will be saved, and ensure the LMS is  back and running quickly after a failure.

2. Cloud-based LMS

2.1. What is a cloud-based LMS?

According to a recent study by Capterra, 87% of LMS users rely on a web-based/hosted LMS. Cloud-based LMSs are hosted on the web on the vendor's servers, and are accessible from anywhere, on any device, by logging in on a dedicated page. Training administrators can easily upload new courses, set up learning paths or access completion data at any time

With a cloud-based LMS, because the solution is developed, hosted and supported by your LMS provider, you don't have to worry about enhancing or maintaining the software.

2.2. Cloud-based LMS Pricing Models

Cloud-based LMS can be pay-per-user, pay-per-use or based on a licence fee:

  • Pay-per-user: Fees may be calculated per registered users or per active users (users that actually log into the LMS)
  • Pay-per-use: LMS vendors charge you every time you use the LMS. For example, this can result in a fee per user per module, or a fee every time a user accesses a course. Licence fee: Cloud-based LMS providers can either charge a one time, upfront fee to access the software or charge you a flat fee to access the software for a period of time.

2.3. Implementing a cloud-based LMS

Some LMS providers also charge a one-time set-up fee to install the LMS. A 2017 Brandon Hall/Docebo report found that 79% of users consider implementation services a key vendor capability. A common set-up fee for a cloud-based LMS is around $4,000 to $7,000. This may cover LMS implementation, training, support, maintenance and updates.

There are many benefits associated with using a cloud-based LMS for online training, including:

  • Lower set-up costs: Setting up a cloud-based system is incredibly easy. All you need to do is simply create your account and log in.
  • Fast deployment: With a cloud-based system, the LMS is ready to use right away. You could theoretically deliver training to learners within an hour of setting up the LMS.
  • Easy to maintain: The LMS provider has a dedicated IT team that works for you. They identify bugs and fix them, and release updates and new features.
  • Better accessibility: With cloud-based LMSs, learners can learn on-the-go and apply what they learn directly, and administrators can easily manage, track and report on learning from any device.
  • Data security: With cloud-based LMSs, the software, built-in security features, and data are hosted on the most reliable and secure clouds on the market like Microsoft Azure or Amazon.
  • Cost predictability: With cloud-based LMS, you know how much you are going to pay each month based on your usage, which makes your cost predictable.
  • Scalability: Because it's a cloud-based solution, your LMS can grow with you. The only cost that will increase will be your monthly subscription, unless you paid a flat fee to access the software.

With all this in mind, you can start making a more informed decision regarding which LMS option will be more cost-effective for your organization. However, while cost is important, it's not the only factor you need to consider. Amongst LMS users, 31% had switched from a previous system, and the vast majority did so because the LMS lacked needed features. Only 6% switched because of the cost.

The first thing you should do when choosing an LMS is define your learning goals and objectives, and establish a list of your must-have LMS features. Then, depending on your needs, you'll be able to choose between one or the other solution.

The end goal is to deliver engaging learning experiences and to increase training effectiveness.

3. Could SkillBuilder® LMS be your Match?

SkillBuilder® is a cloud-based LMS that might be exactly what you need. Look to SkillBuilder® LMS for:

Scalability: SkillBuilder® LMS defines active users as any account, regardless of role, that is enabled during the 30-day billing period. The solution is scalable to adjust to the growth of your organization. Implementation Services: At BaseCorp, we are equipped to usher you through the implementation process and ensure your LMS is a success. We can help you define your requirements, assemble your team, integrate your LMS with your existing systems and set up a thorough testing or pilot process to make sure your LMS implementation runs as smoothly as possible. Integration Capabilities: SkillBuilder® LMS offers an API toolkit, which makes integrating our LMS with your existing courseware a snap. Technical Support: Our BaseCorp team prides themselves on offering the support you need not only at implementation but also as your goals and objectives evolve with the growth of your organization. We offer a comprehensive, searchable online help database, as well as a Help Desk that is accessible by telephone or email during regular business hours. User Friendly Interface: SkillBuilder® is easy to use and provides lots of options to users. Learning paths can be viewed as a list (which is representative of a traditional LMS), or graphically through the tile view. Colors in the application also have meaning so that users can easily see which learning activities have been assigned to them, which items have been completed and which items have expired and need to be requalified.


Only you know which type of LMS will work best for your company. Both open source and cloud-based LMSs come with their own benefits and drawbacks. As you consider your options, be aware that an LMS such as SkillBuilder® might just be the best of both worlds, with the flexibility and cost-effectiveness of open source, and the customer service and support that comes with cloud-based.

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Jill W.

Jill is an Instructional Designer at BaseCorp Learning Systems with more than 10 years of experience researching, writing and designing effective learning materials. She is fascinated by the English language and enjoys the challenge of adapting her work for different audiences. After work, Jill continues to leverage her professional experience as she works toward the development of a training program for her cats. So far, success has not been apparent.