Image of an abstract cloud with servers behind it.

Cloud LMS vs Self Hosted LMS: Pros and Cons

What’s the Meaning of “In the Cloud”?

I’m sure you’ve heard the phrase ‘in the cloud’. It refers to storing and accessing data and software over the Internet instead of software that runs on your computer. All you need is a web browser like Chrome or Firefox, an Internet connection and you can access your cloud-based software.

What’s a Cloud LMS?

An LMS or learning management system is software that helps you deliver and manage online training. A cloud LMS (also known as a cloud based LMS or a hosted LMS) is a learning management system where you don’t need to install anything on your computer or onto a web server. Instead, it’s all hosted for you online. You simply sign into the LMS software application and start using it.

  • Evernote is in the cloud.
  • Google Docs is in the cloud.
  • Yahoo email is in the cloud.

These are all services you may already use.

Using an LMS in the cloud is not much different. You simply sign up for a plan (which typically requires a fee), sign in, and get to work.

Once you’ve logged into your admin area, you can upload content, manage users, and set-up your course registration process.

A cloud LMS is run off a Software as a Service or (SaaS) model. That’s where you pay a monthly fee to use the features offered by the service.

Online learning management systems in the cloud are becoming more and more popular. In fact, I recently came across a press release stating that by 2020, over 80% of organizations are expected to adopt a cloud-based LMS.

How Does a Cloud LMS Work?

The first step is to sign up to the software. Some providers offer a free trial so you can see and try out all the features first.

I suggest starting there.

Login to your own admin area (this is never shared with another company). It’s your personal admin account to upload your course content and manage your users and other aspects of your course.

Often, you can upgrade to a paid plan right from your admin account. Once you login, you can get to work.

What Kind of Business Should Use a Cloud LMS?

If you want to set-up an online course platform then you need an LMS. A cloud LMS typically results in less tech headaches than other options. You won’t need to install software on your server or maintain it over time.

Alternatives to a Cloud LMS

An alternative to a cloud LMS is a self-hosted LMS. The difference really comes down to control vs ease-of-use.

A cloud LMS will be easier to use. You don’t need to install anything on your server or deal with ongoing maintenance. You do however have to work within the confines of the feature set offered by the cloud LMS.

With a self-hosted LMS, you’ll have to install the software on your server. You’ll have to manage it and make sure it gets updated as needed. In addition, any and every integration and add-on may need to be updated so you need to manage all those as well.

Pros of a Cloud LMS

Better Security Features

A reputable cloud LMS will offer a secure platform. Although you can get these security features on your own, you may not want to pay extra for them or even want to spend your time learning about security. On the flip side, the company is a bigger target, whereas you and your courses on their own probably are not.

Lower Learning Curve

A cloud LMS is pretty easy to use. The software takes care of making it easy for you and providing all the updates for you.

Easy to Maintain (Move Closer to Stress Free)

You cannot break your online course platform. I can break my own WordPress site all on my own in just a few clicks of my mouse. If anything happens to your online course hosted by a cloud LMS provider, then it’s the providers problem. It’ll feel like it’s your problem, but you can go do something else while they fix it.

Faster Set-Up

With a cloud LMS, you can have your course set up that same day. Some self-hosted LMS providers have a fast set-up too, but there’s always more to do; finding a nice theme, adjusting the theme, uploading the content, etc …

With a cloud LMS it’s all ready to go.

Unlimited Content Including Video Content

Most cloud learning management systems allow you to upload unlimited content. In addition, they will also host your video content. With a self-hosted solution, you will need to pay for a video hosting service.

Predictable Costs

With a cloud LMS you know what you’ll pay every month. You can have sudden, unexpected maintenance or updates on self hosted learning management systems.

Scalable Bandwidth

If you 10 x the number of users on your own server overnight, you may experience problems like service outages. All kinds of problems can arise and your user experiences can go down. You may not know where to turn to scale it so it can be stressful and time consuming to figure it all out. If you 10 x your users on a cloud LMS, they should be able to scale this for you with no intervention from you.

IT Support

With a cloud LMS, the software company manages everything for you. So again, if your site goes down, they’ll fix it. If you have problems with integrations, they should be able to help.

With a self-hosted plugin you’ll have support, but they will only guide you and give you advice. They’re not going to physically take care of the problem for you. You’ll have to contact them, try the solution, and contact them again if it still doesn’t solve the problem.

With a cloud LMS you can’t do anything with the core structure of the LMS. In most cases you won’t even know they’re performing maintenance on your site. It’s all seamless and taken care of for you.

Save Time

With a cloud LMS you can spend time developing and marketing your training instead of managing your LMS. Using a cloud LMS can greatly simplify at least this aspect of your business.

Cons of a Cloud LMS

Limited Customizations

The level of customization with a cloud LMS may be a problem for you depending on your needs. With some cloud LMS plans, you may not even be able to put your logo on your pages and/or link back to your main home page. Your logo may go back to the cloud LMS home page. You may not even be able to put in your logo unless you upgrade for a more expensive plan!

Limited Control

Another negative of a cloud LMS is that you have limited control over your course platform. What happens if they have a failure, implement new policies, or add in new customizations you don’t like? You really can’t do anything about any of this.

In addition, you don’t own the database or the data. You can’t control the performance. So before you choose a cloud LMS make sure you’re OK not having full control over your LMS.

Integrations

You will still need to integrate your cloud LMS with other software.  All in one solutions do not often have the best of everything. You can use their course creation and student management tools, but you might want be interested in better tools for email marketing, your affiliate program, or eCommerce management.

At that point then you have to integrate. Even on a cloud solution, you can have trouble integrating tools (for example, I had to use Zapier to fully integrate ConvertKit with Teachable).

Integrations can take time to set up or an integration can be as simple as adding in an API key.

Even after you get your integration completed, it’s a good idea to monitor it because they can break over time (for instance, when one tool updates something can be out-of-sync and cause problems).

Integrations are not necessarily a bad thing as long as the cloud LMS offers some support for them. You might want to set up a process where you check your integrations at least quarterly if not every month even when using a cloud LMS.

Cloud LMS Pricing Models

There are a number of different cloud learning management systems available. One way to differentiate them is by the fees required to use them.

Some offer unlimited courses and unlimited users and another segment offers plans based on the number of users. I’ve broken these down into licensing plans and pay-per-user plans.

Pay-Per-User Plans

Pay-per-user plans often target corporations and corporate training.

It probably doesn’t cost the LMS company much more to help you run your LMS with 100 users or 500 users, but they’ll charge you more for it. So I don’t recommend these unless there is a specific feature you cannot get with any other plan.

Many pay-per-user plans offer SCORM-compliance which may be part of the costs associated with a higher number of users. SCORM-compliant file-types can be more taxing. So if you’re producing SCORM-compliant courses with an authoring tool like Articulate then it could be more taxing on the hosting network rather than just video training and it could make sense why you’d pay by the user.

However pay-per-user plans start ramping up in price with very little users.

Other plans have more detailed descriptions of what a user is. I’ve seen:

  • Pay-per-user
  • Pay-per-registered-user
  • Pay-per-active-user

Pay-per-active-user is the most fair and economical means from our standpoint (meaning those who are paying for the platform). With a pay-per-active-user plan you’re only paying for those who are actively using the LMS to access the content.

You can roughly figure out the costs if you have an estimate of how many learners will access your course.

If you cap the length of time your learners can access your course then pay-per-user can make more sense. Especially if the system has more features that you need and cannot get on another plan that has an unlimited user option.

Otherwise your plan will get increasingly more expensive as your user base increases.

Licensing Plans

Obviously, unlimited is cheaper for you in the long run if you think your course could become popular. In many cases it makes more sense to pay for features instead of paying on the number of users.

If you’re a corporate user, then it may not matter, but if you’re an entrepreneur, paying by the user is very limiting to your business.

If you’re creating a free course to give away to drum up business then an unlimited licensing plan is really the only choice.

Misconceptions

A self-hosted LMS will be less expensive than a cloud LMS.

Not always.

You’ll often need to have a more robust hosting plan to account for the plugin or script as well as hosting for video content. You may need to pay for integrations with an LMS plugin as well. And they will need to be paid yearly if not monthly to account for updates and support.

You can get a cloud LMS starting as low as $40/month or up so they are often very reasonably priced.

Cloud solutions are backed up automatically.

With a cloud LMS, your data will be backed up internally (at least we hope). However, you should still check on whether or not you can get your own back-ups. You may be surprised to find that you cannot get an actual back-up with some cloud platforms.

When I’m saying back-up, I’m talking about getting a single file with all your content files, users, any discussion, scores, etc … all wrapped up with a bow on it. With a self-hosted LMS, you can usually get a file like this. It can however be impossible with a cloud LMS.

Getting that with a cloud LMS is something you may have to give up. Make sure the cloud LMS company is reputable and back-up what you can just in case.

That means to store your course content so if you had to re-create the course you could do so without spending massive amounts of time. In addition, make sure you have a back-up of your  users. If you’ve integrated your cloud LMS with an email marketing automation tool, then you can get a back-up of that list. You want to store your users along with as much data about them as possible on your own system.

Recommended Cloud LMS Platforms

Every small business or organization is different and has different needs. However my top two recommended cloud LMS platforms should meet the needs of most businesses:

Teachable

Teachable is one of the most popular cloud learning management systems at this time. It’s used by over 22,000 online instructors including the New York Times. In addition, Teachable powers the elearning marketplace, Learnability which offers online training courses for designers like Adobe Photoshop CC Focus, Design for Coders, Mobile Product Design: From Napkin to Launch, and hundreds more.

Teachable is perfect for small businesses. One such example is Sketchmaster which offers video training courses for professionals learning how to use the Sketch software.

Sign-up for a free Teachable plan and find out if it’s a good fit for your needs.

Teachable Feature List:

  • Create unlimited courses for unlimited students.
  • Gain access to built-in tools for eCommerce, affiliate marketing, email marketing integrations, and more.
  • Includes graded quizzes, course reviews, progress tracking, coupons, drip course content, 1-page checkout, and more (not all features are offered on every plan).
  • Start with the free plan.
  • You can choose from 3 premium plans ranging from $39/month up to $499/month (each plan offers a variety of features).
  • Teachable offers their own payment processor where they will pay you, your instructors, and your affiliates (payments on the Teachable payment processor are made every 30 days and are subject to additional transaction fees).
  • Connect with Stripe or PayPal on the $99/month and up plans and get your payments immediately.
  • Offer free courses from your Teachable account.

Check out the Teachable Review and Teachable Tutorial to find out if this popular cloud LMS offers the feature set you need.

Thinkific

Thinkific is another very popular cloud LMS. Over 25,000 course creators use the Thinkific platform. Their course creators range from solo entrepreneurs to large corporations.

For example, HootSuite Academy is built on Thinkific. HootSuite offers a platform to help businesses grow their social media campaigns. Their HootSuite Academy offers online training courses on social media best practices and has over 35,000 certified graduates of their courses. Thinkific can handle your needs, whether large or small.

Two examples of small businesses using Thinkific include Super Learner Academy and MyExcelOnline. Both these successful small businesses use Thinkific to build and manage their online courses.

Thinkific’s free plan allows you to get started and see if it’s the right fit for you.

Thinkific Feature List:

  • Connect with Stripe and PayPal on any plan.
  • Offer free courses and/or free previews of paid courses.
  • Paid plans range from $49/month up to $279/month
  • The most popular plan is $99/month and includes most all of their features.
  • Create unlimited courses for unlimited students with unlimited site/video hosting.
  • Thinkific offers graded quizzes, surveys, group sales, course reviews, progress tracking, coupons, drip course content, white labeling, and more (not all features are offered on every plan).
  • Ability to upload SCORM-compliant training material.
  • Everything you need to start offer free or paid courses including integrations with payment processors and email marketing tools as well as the ability to offer an affiliate marketing module is possible with Thinkific.

For more information, check-out the Thinkific review and the Thinkific tutorial. Between those two guides, you’ll know just about everything there is to know about the Thinkific platform.

Thinkific and Teachable are both very similar platforms so it can be difficult to decide between the two. I spent a ton of time looking into them and still found it a very difficult decision because they really are very similar. Review the Teachable vs Thinkific post if you’d like to see their core differences.

These are the two top options for a cloud LMS. If only a corporate solution will do, then I suggest looking into iSpring Learn.

If the idea of paying a monthly fee doesn’t sit well with you or you’d like more control than what a cloud LMS offers, you can check into a self-hosted LMS platform. These are often offered in the form of a WordPress LMS plugin.

I hope that helps you understand the ins and outs of a cloud based LMS (or hosted LMS). If you’ve got any questions, please ask them below!

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