LMS Pricing Models: How Much Does an LMS Cost?

You’re finally doing it—you’re choosing a new learning management system (LMS) for your organization. 

Whether this is your first LMS software or a new LMS solution replacing a legacy system, you’re in great company. In 2023, 98% of companies delivering training turned to an LMS to drive their learning strategies. 

LMSs or learning platforms are doing more than ever before. This isn’t just about employee onboarding or corporate training anymore. 

Since the pandemic, e-learning has taken off, expanding the very role of LMSs and learning platforms in the corporate world. Today, over 75% of North American corporations offer customer education, and there’s a growing focus on partner enablement, too. 

Internally, organizations are shifting to address skill gaps and foster continuous learning and development, making LMSs essential for upskilling, reskilling, and promoting a learning culture.

With so much potential, finding the right LMS or learning platform is worth the time. On average, it takes up to six months to research and decide, but it’s time well spent. 

Cost considerations are common—44% of LMS buyers report that the LMS price tag is their biggest hurdle. 

But don’t worry; we’ve got you covered. This guide breaks down the details on LMS pricing options, so you’ll know exactly what to expect as you prepare to invest in a solution that’s right for you.

Type of LMS Fees

LMSs and learning platforms are complex software and their cost reflects it. 

LMS pricing is typically not a single one-time expense. They’re constantly being updated (and you want innovation when it comes to your learning platform!), and so it makes sense their pricing structure would be a bit funky.

But one thing is certain, if you want to allocate a budget for an LMS or learning solution to maximize the potential of your learning and development program, you’ve got to know all the costs involved.

So what are they? Read below for the gist.

One-time expenses 

These are LMS expenses that would happen only once such as in the case of set up, migration, and customization or whitelabeling. Sometimes these costs can be included within a package. 

For instance, some companies include onboarding and ongoing support in their LMS pricing packages, although you may have to pay more for priority customer support.

Set up fees

As is the case with any software, LMSs require installation and launching, which require ample expertise. This process can include data migration (see below), cloud hosting or dedicated servers set up, and the ongoing training of administrators of the LMS.

Migration fees

Beyond installation and launching, migration fees can also include switching from a legacy system to a new LMS or learning solution. 

If you’re switching from one LMS to another, you probably want to take your best e-learning content. Some vendors charge for this on a flat rate basis, while some charge depending on the content you want to bring over. Some even offer it for free.

Customization

A great LMS or learning platform should be able to integrate into your existing tech stack, for a more consolidated system. It should also have the capacity to adapt its interface to better match your branding.

You want your learners, be it employees, customers or partners, to know that they’re still in your company, not in another site. That’s what you get with white labeling.

There can be extra costs associated with integrations, as you might need to pay for custom API development, and coding support if you don’t have the capabilities in house.

Recurring payments

LMSs and other learning platforms are software and they’re typically offered as a service. As such, they often require subscription or licensing fees, and maintenance. 

Subscription or licensing fees

Like Netflix, your learning and development provider (your LMS or learning platform) will likely require a monthly or yearly/annual subscription plan.

Maintenance

Maintenance and technical support are often included in a subscription LMS pricing type. But sometimes with open-source LMSs, or if you choose a pay-as-you-go pricing model, there could be additional costs associated with updates and other maintenance. 

Other additional costs

Training

LMSs and learning platforms are often intuitive and easy to use, but they’re still complex systems that require guidance and training to maximize their potential. Often, these can be added services to the subscription and may go beyond routine training to even strategic advising and consulting. 

Support

You’ll be surprised to know that many LMSs and learning platforms do not come equipped with 24/7 technical support. So this is something you could consider when making a decision.

Add-ons

As LMS or learning platform companies innovate, they may develop add-on features to enhance customization, improve engagement, and address evolving learning needs across various industries. But they may not be essential, so LMS vendors may choose to charge extra for them.

Now that you know the types of fees involved in LMS software pricing, read below to see how they’re typically bundled.

6 Common LMS Pricing Models

Whether you're selecting an LMS for the first time or upgrading to a more supportive platform, it's essential to consider both your LMS requirements and the associated costs.

You can refer to our handy table for a breakdown of different pricing models and their pros and cons.

To get more information, just scroll down where we’ll explain LMS prices in depth.

1. Pay per user

Also called pay per seat or pay per learner, LMS vendors who use this LMS price per user pricing model expect you to pay upfront for a set number of users. Most often, the pricing model is tiered, so the rate goes down the more users you want to add.

If you choose an LMS with this pricing model, you’ll pay the total cost for the selected number of users either per month or per year.

2. Pay per registered user

Unlike the previous pricing plan where you have to guess how many people will use the LMS, here you only pay for those learners who create an account.

In this pricing model, a registered user means every employee who has a username and a password on the LMS platform.

3. Pay per active users

This LMS system pricing configuration addresses the common cons of the previous two pricing plans. With both pay-per-user and registered user models, you’re committing to pay in advance, irrespective of how many users end up using those fancy LMS features.

To prevent this, you can choose an LMS where you only pay for the number of active users. 

But what’s an active user? It’s a learner who has accessed the LMS platform within a given billing cycle.

It’s important to understand that there are two main ways that this pricing plan works.

The first model charges for each user who accesses the LMS during the billing cycle. After their first log-in, they can use the whole online course catalog at no extra cost.

The second model LMS vendors use is to charge per active user per month.

To illustrate the difference, under the first model, if someone logs into the LMS in January, they’d show up on the bill for January but not the following months.

In the second model, you’d pay for that user each month they accessed the LMS.

5. Pay as you go

So far, we’ve talked about pricing models that charge per user. Those models are a fit for companies that hold continuous employee training.

But what if you know you only need online training a few times or even just once a year? That’s often the case with companies in industries that require compliance training and (re)certification.

What you see is what you get with the pay-as-you-go pricing model. An organization only pays for what they use, which means that they may pay extra during times of compliance or certification renewal, or when they need to onboard an influx of employees.

That being said, this model is not often used by LMSs vendors given that setting up the LMS and migrating any accrued data requires much effort just to use it sporadically.

6. License fee

If you find calculating the LMS cost based on the number of users confusing, you might choose the license fee or subscription model. Here, you pay one set fee, usually per year.

After you do so, you can add a more or less unlimited number of users and courses.

Most LMS vendors that charge like this do have tiered pricing, however. How much you pay depends on what features you want to include in the package.

7. Open-source

In software, open-source means that the source code of an app, program, or platform is publicly available and can be modified by anyone.

Compared to closed-source applications (which most SaaS LMSs are), open-source’s main advantages are the price (it’s often free!) and the level of possible customization.

Where things get a bit more complex is that some open-source LMSs charge you a yearly subscription fee. This fee covers customization, installation, integrations, and maintenance.

Those are precisely the things your IT department would have to do on their own if you chose to go with a completely free open-source option.

In that case, your total cost of ownership would have to include such things as hosting, buying plug-ins, and the salaries of the person or people in your IT department in charge of maintaining the LMS.

Examples of Popular LMS solutions

We’ve just gone through the most popular pricing models available and we provided some pricing examples for those models in the table above. But what if you just want to know which LMSs are the best out there?

See below for the 10 most popular LMS solutions according to G2.

It’s important to note that though cost is a significant factor to consider, LMSs can also lead to savings, as you will see in the case study in the conclusion of this article. 

AI-driven platforms that provide robust integrations and automations ensure that you drastically minimize administrative work. Plus with popular integrations like e-commerce (more below), you can even unlock a revenue stream!

Factors that affect how much an LMS costs

Working on an LMS implementation plan often comes with a bit of sticker shock. After all, these are sophisticated apps with complex features—you wouldn’t want them to be cheap.  

Here are the factors that affect how much an LMS ends up costing you.

1. Features and modules

Different LMS providers offer different functionalities.

What is considered part of your package deal versus an add-on with an extra cost differs depending on the vendor.

Here is a list of features that can affect the price, depending on the company:

Integrations

There are integrations for just about everything these days. See the table below for some of the most popular integrations.

AI authoring

Did you know it takes upwards of 40 hours to create just one hour of content? 

With AI authoring, course authoring or course creation, and even assessment generation can be streamlined effectively. 

Not all platforms offer this level of innovation and not all platforms offer pedagogically sound AI authoring either. 

It’s important to consider this feature into your budget if you provide e-learning content, or if you provide compliance training, which can be subject to change rapidly at any time.

Gamification

Platforms that enable gamification allow you to incorporate competitions, badges, rewards, and leaderboards into your training. This creates an engaged and motivated learning community.

For those reasons, this feature has become a huge part of enterprise learning as we know it.

Extended enterprise

Being able to offer training to partners and customers is a great way to grow your profit margin! But it does come at the cost of more users as well as the need for advanced customization and functionality.

If extending your training to customers, partners, or members is of high importance to you, ensure the e-commerce functionality is secure and accessible to your audience’s region. Some vendors refer to this as “multi-portal” functionality.

Mobile app

Whether your audience is team iPhone or team Android, it’s essential to make sure your learning program is mobile-friendly.

Mobile learning means that your LMS is accessible from a mobile app so your learners can learn in real time, no matter where they are.

Your phone goes just about everywhere you go, and your learning materials should too.

Some vendors charge for use of their mobile app, and some even offer a custom-branded standalone mobile app. If branding and white labeling are important for you, this is the golden ticket.

Training content

Some companies offer a catalog of free training courses, some charge an additional cost, and some will put you in touch with a third-party content provider.

While it may sound tempting to create and push your content for each learning path, we suggest making the most of your time and money by evaluating your content offerings before going the homemade route. 

Why make it in-house when you can save time and money?

Social learning modules

Social learning is a great way to keep learners engaged and encourage them to collaborate and share best practices, even across the globe.

Features such as comments and forums take the best of social media and apply them to online learning.

2. Agreement length

Agreement length can be a big factor in the final price of your shiny new LMS platform.

As expected, LMS vendors are more likely to give you discounts if you decide on a longer commitment period.

Generally, an LMS deal lasts between one and five years. When choosing how long to commit to an LMS, you’ll want to strike a balance between allowing enough time for your ROI to be maximized and over-committing.

Many companies choose an agreement length of three years. It’s enough time to see if the LMS is performing well for your needs, but not so long that you get stuck with an incompatible e-learning solution.

Over to you: Deciding on an LMS case study

There are plenty of things to take into account when you’re shopping around for an LMS. From determining your learning needs to crafting a comprehensive request for proposal.

Then, of course, there’s your budget. At Docebo, we offer a tiered pricing structure to help ensure you can meet your budget requirements. Plus we don’t charge any setup fees.

After all, it takes a partnership to get your learning platform up and running. 

And that’s exactly what Brooks Automation was searching for when they decided to make the switch from their legacy system. 

Brooks Automation is a manufacturing company specializing in robots, vacuum solutions and automation systems essential for semiconductor production. They spent about six months searching for a learning solution that could meet their needs before deciding on Docebo.

Part of the reason for switching was the inability for their prior LMS to support both internal and external training needs. 

Brooks Automation ultimately chose Docebo for its unmatched scalability, robust customization capabilities, and its ability to support multiple use cases.

With Docebo, Brooks Automation created personalized homepages and course catalogs, automated administrative tasks through integration with business tools, and enhanced learning experiences by incorporating a blended learning approach that includes e-learning, and in-person and virtual instructor-led training.

Additionally, Docebo’s analytics enabled Brooks to make data-driven decisions, allowing them to track progress and align training initiatives with business goals.

Since implementing Docebo’s learning solution, Brooks Automation has achieved impressive results: a 40% increase in course completion for field service engineers, a 30% reduction in training time for new equipment, and lots of savings due to a 20% decrease in training costs. 

Plus, by offering e-learning and instructor-led training as paid services, Brooks created a new revenue stream with a subscription model, generating substantial income through their new Docebo-enabled e-commerce integration that supports continuous program reinvestment. 

This scalable approach has enabled Brooks to expand into new markets and customer segments, contributing significantly to the company’s overall growth and profitability.

With Docebo, beyond a fair market price, they also benefited from savings and a new revenue stream.

Want to take a tour of the Docebo platform? Check out our learning solution to see why it’s trusted by over 3,800 global businesses like Brooks Automation and schedule a demo today.