It is too easy to overpay for an LMS in 2016. In recent posts, I’ve described how cloud LMSs are disrupting and expanding the market with their customer friendly license models and shrinking implementation fees. They are at it again with a novel trend — public LMS pricing. Cloud LMS vendors are already installed in the cloud allowing new clients to be on-boarded instantly with no sales interaction. Cloud LMS vendors advertise their fees clearly. If buyers think it is too high, so be it. Cloud LMS vendors just need to keep a steady and growing flow of web traffic and a certain percentage will automatically convert into paying customers at any price point.
The public pricing is typically provided in tiers based on number of learners, functionality or both. A monthly or annual cost is standard. Implementation and set up charges can be extra or factored into the tiered offering. Some vendors charge additional for content storage, number of administrators and number of courses. The range of LMS functionality available with each vendor is all over the board. All of this can make comparing LMS pricing laborious and tricky. For every LMS buyer big or small, there exists a range of vendor pricing so wide a ship could sail through it.
Real Life LMS Pricing
To illustrate the range, I went public price shopping for a 1000-user annual license with standard LMS functionality needed for employee learners. I only captured vendors who provided pricing specifically at the 1000 user tier to keep the results relevant. I found solutions from free to $27,500/year with similar capabilities. Check out this diversity from a dozen of LMS vendors with public LMS pricing:
$0/year – Coggno (Free LMS and only pay for content)
From private pricing I’ve seen, I know definitively pricing at 1000 users can top $50,000/year. What does all this mean? It means that even with publicly available pricing LMS buyers can and do overpay. If there is at least a $27,500/year range on a 1000 user LMS with simple requirements, imagine what it is at 10,000, 35,000 or 100,000 learners mixed with complexity and private pricing. In the many large-scale LMS selections I run, I commonly see vendor price ranges in the hundreds of thousands of dollars. Public pricing proves it.
It is foolish to pay more than you have to and get nothing in return but it is impossible to know if you are overpaying if you first don’t define your LMS requirements. Determine exactly what you need now and over the next 3 years and use the requirements to compare the vendors apples-to-apples on requirements, pricing and reputation. Smart buyers will be able to save a significant amount of cash they can invest in content or other program improvements. If all of this sounds time consuming, complex and risky, well, it is unless you know a certain LMS selection consultant that has it all figured out.
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The LMS landscape is crowded, complex and difficult for potential buyers to navigate. What should learning technology buyers do?
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What an effective LMS selection process looks like
The factors that matter most in choosing a learning platform
Where to find the most reliable LMS vendor intelligence, and
How to avoid common LMS selection missteps
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John Leh is CEO and Lead Analyst at Talented Learning and the Talented Learning Center. John is a fiercely independent consultant, blogger, podcaster, speaker and educator who helps organizations select and implement learning technology strategies, primarily for extended enterprise applications. His advice is based upon more than 25+years of learning-tech industry experience, serving as a trusted LMS selection and sales adviser to hundreds of learning organizations with a total technology spend of more than $100+ million and growing. John would love to connect with you on Twitter or on LinkedIn.
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