How Much Will You Really Pay For Your New LMS? Part I: Cloud LMS – A True Cost Analysis

How Much Will You Really Pay For Your New LMS? Part I: Cloud LMS – A True Cost Analysis
Summary: The cloud is essentially software and services that run on the internet instead of a computer. Examples include Netflix, Apple iCloud, Dropbox, and Microsoft Office 365. And, of course, there are training systems now on the cloud as well. Here is what you need to need to have in mind if you consider buying a cloud-based Learning Management System for your organization.

Part I: How Much Will You Really Pay For Your New LMS?

The cloud has been continually gaining speed, but it’s not always the best choice for some businesses. For instance, many companies that are highly regulated are facing push back from their IT departments regarding the cloud. IT managers have a laundry list of concerns and issues about training in the cloud including integration, single sign-on, security, database access, content access and storage.

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Pros And Cons Of Cloud-Based Learning Management Systems

Before considering the cloud as a training option, consider the following pros and cons:


  • Affordable.
    One of the most cited benefits of the cloud is that it is cheaper than on-premise installations – making enterprise-quality technology affordable for small businesses.
  • Hassle free.
    The cloud removes much of the hassle of managing systems. Because they take care of all the IT for your business, you don’t have to maintain expensive servers, hardware, and in-house IT staff. For instance, when a new update is available it happens seamlessly, managed by the vendor and rolled out to users in a quick, efficient manner.
  • Increased collaboration and flexibility.
    For many businesses, moving to the cloud increases opportunities for collaboration between employees. Colleagues can sync and work on documents or shared apps with ease, often simultaneously, receiving updates in real time. Additionally, cloud computing allows each team member to work from anywhere.


One of the biggest impediments to public cloud computing adoption is the calculation of additional risk from all the unknowns, known and otherwise.

  • Critical business data at risk.
    A big concern that companies have with the cloud is the overall security of their data. Putting information into services that are accessible over the public internet means that criminals have a potential gold mine of targets. Many organizations have security requirements to store data on their own servers.
  • Automatic updates enforce change, whether you’re ready or not.
    The cloud does all the updating for you, but what if you don’t want that upgrade? Imagine getting to work and find that an upgrade has taken place overnight and a key feature that you relied on has been removed, or the dashboard has had a major design overhaul that will take users ages to fathom, or a function has been added that will give you security nightmares. While managing your own software and systems upgrades can take more time, it does at least give you the control to decide how and when it is implemented, so allowing you to prepare for the changes.
  • Reliance on third parties to run your IT.
    There may be cost savings by reducing IT staff, but this will also mean that you won’t have easy and quick access to people on the ground if things go wrong.
  • Lack of internet access leaves data out of reach.
    If your network goes offline, for example, staff can be left twiddling their thumbs, unable to log in to key services or read important files. Or, if they're on the move and want to access data on the go –often touted by cloud vendors as the easiest thing in the world– a lack of connection can render this benefit redundant.
  • Cloud vendor outages leave you high and dry.
    One the flip side, even if you do have internet access, if the vendor has an outage, you’re still left high and dry.
  • Forever tied into the cloud.
    Many firms have embraced this philosophy and have offloaded their own kit and staff. But once a firm has gone down this route, it's very costly to turn your back on the cloud and bring systems back in-house again. So, for those who try out the cloud and get put off by the associated drawbacks, perhaps around data privacy or lack of control, you could end up in a situation where the potential cloud cost savings are eaten up by the need to reinvest in IT equipment and recruitment.

To Cloud Or Not To Cloud? Just How Much Will It Actually Cost?

As you can see, there are some real concerns with the cloud, specifically in regards to business data put at risk. What it really boils down to is whom you trust with your business data? When you store data in the cloud, you're trusting a third party to keep it safe. And, because the purported safety of cloud computing isn't standardized, you may have a difficult time determining how well third-parties protect your data.

Here are some things to consider before choosing a training solution in the cloud:

  • How sensitive is your data?
    Companies that must meet stringent compliance regulations may well need their own IT department to keep data secure.
  • Does your training solution offer the choice between on-premise and the cloud?
    Do they offer the capacity to make changes in the future?
  • How much control over your data are you comfortable giving up to a third party?
    Only on-premise solutions can truly offer 100%control.
  • Do you want cost savings in the short term or long term?
    Cloud LMS systems have a higher total cost of ownership in the long run.
  • You don’t need customization, security of stored data, or third-party extensions integration.
    These benefits are specific to on premise training solutions.

While a SaaS LMS will offer similar features, licensing, and administration costs as other training systems, the real difference in added costs will come from:

  • Single Sign-On authentication.
  • Integration with systems of record.
  • Risk and compliance management/security.
  • Customization and integration.

Cloud Learning Management Systems are generally reserved for smaller businesses with limited resources. These types of businesses generally are not as highly regulated and don’t have complex needs and customization requirements.

For more on what you need to know when shopping for a Learning Management System, download the free eBook How Much Will You Really Pay For Your New LMS?.

Related articles:

1. How Much Will You Really Pay For Your New LMS? Part II: On-Premise LMS – A True Cost Analysis

2. How You Can Save Using Microsoft SharePoint: 5 Most Useful LMS Cost Elements To Consider

3. 5 Advantages Of A SharePoint-Based LMS

4. Free eBook: How Much Will You Really Pay For Your New LMS?

eBook Release: ShareKnowledge
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