How much does the average learning management system cost?

Selecting the correct Learning Management System might be one of the most important investments for an organization, business, or institution. Knowing about LMS costs will help the organization make the best financial investment decisions while meeting its needs. Now, let us break down the pricing for LMS, how different factors drive LMS license pricing, and what one might expect to pay for their LMS.

Different Pricing Models for Learning Management Systems

Subscription-based Pricing

A subscription would be the most common pricing model for an LMS platform: one pays once a month or yearly, depending on the number of users or features involved. Ideal for institutions searching for flexibility and scalability, the business is free to modify subscriptions whenever the needs change.

Per-User Pricing

Some charge per user, where you pay according to the number of users who access the system. This model benefits small to medium-sized companies because you pay only for active users. The disadvantage is that with increased users, costs can go significantly higher.

Licensing-based Pricing

Under this model, organizations purchase the right to use the LMS. Functionally, license-based pricing can be of two kinds: perpetual and annual. In a perpetual license, one pays once to have access over the long term. Updates or support sometimes require additional fees. Upfront costs in an annual permit are usually reasonably inexpensive but must be repaid every year, thus making this type of license predictable and recurring.

The Key Factors of LMS Pricing

The cost of an LMS can vary widely based on a variety of factors:

• Number of Users

Most LMSes are priced based on the number of users. A small organization, with an equally smaller number of employees or learners, may see the lowest pricing as compared to large enterprises that would require thousands of users on the system. Others have tiered pricing based on user brackets, which lets you significantly maintain reasonable costs as you grow.

• Features and Functionality

Others will be no-frills and offer only core functionality, course delivery, and tracking. Other systems will be more sophisticated in marrying analytics and gamification with mobile access and integrations with other systems, such as CRMs or HR tools. The more features your LMS has, the higher the price will be.

• Customization and Integration Requirements

Similarly, integrating the LMS license pricing with your branding or the system with other tools like payroll, email, and e-commerce increases its cost. On similar lines, multichannel or specialized integrations are more complex in development and require more resources for maintenance reasons.

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• Support and Training Costs

Although most LMS providers offer support, premium support with 24/7 availability and account managers will be more expensive. The other added cost is training your staff to use the system effectively. Training sessions or modules would need to be added for some LMS providers, or, otherwise, such services would have to be priced at a guess separately.

LMS License Pricing Breakdown

LMS License Pricing: These are the amounts expected to be charged when licensing an LMS platform. The cost breakdown is seen herein:

• Cloud-based LMS

  
  

Most cloud-based LMSs typically receive payment under a recurring subscription fee per head or based on the provided features. This model means the provider manages system upgrades and maintenance at minimal in-house IT costs. Cloud-based LMSs are known to cost, on average, between $2 and $10 per month for each user, depending on the features and number of users.

• Local LMS

  
  

A self-hosted system involves buying LMS software outright and hosting it on one's own servers. This gives much more control, but the upfront cost can range from $500 to $20,000, depending on platform size and the functionality involved. Then there are other issues like who will maintain it, support it, and provide updates- all falling ultimately to your IT team and feeding into the overall cost of ownership.

Accounting for the Hidden Costs

It's the base price, but there are just so many hidden costs to these LMS platforms:

Setup and Implementation Costs

Setting up an LMS can be quite expensive, especially if custom-set. Onboarding costs may also be included in the price of setting up a system and integrating it with other tools.

Maintenance and updates

Most of the time, this will be part of the subscription to a cloud-based LMS platform. Apart from your IT budget, you must update and maintain the system yourself in a self-hosted LMS platform.

Content Creation and Maintenance Costs

You may also have to invest in content creation tools if you're building courses from scratch or using heavy video content. Many Learning Management Systems come with a storage limit, over which they will begin racking up extra costs.

Additional Modules or Plugins

A few provide core functionality at the base price but charge additionally for optional modules that include certification tracking features, e-commerce features, and integrations with third-party tools. Depending on your organization's needs, this could become quite a hefty list of add-ons.

When weighing your options, remember that companies like Latitude Learning offer an outstanding range of price plans and options to suit businesses of all sizes and meet your needs and budget.