« Information Overload | Main | LMS Pricing Trends (Hosted Implementations) »
LMS Pricing Trends (Installed Implementations)
By Richard Nantel | March 28, 2007
I’ve been digging through our research databases and looking at the historical pricing of learning management systems. The chart below shows the average three-year cumulative pricing for small (500 users), medium (10,000 users), large (25,000 users), and very large (100,000 users) implementations installed on clients’ servers from 2005-2007. (I’ll provide the data for hosted implementations in my next post.)
(Prices in U.S. dollars)
This data is based on the prices for 52 LMSs profiled in our 2005-2006 research and 63 systems currently contained in our 2007 research.
All prices have dropped over the last three years. The more dramatic drops have taken place in smaller implementations. Average pricing for 500 user implementations has dropped 20% since 2005. Average pricing for 10,000-25,000 user implementations has dropped about 17% since 2005. After a dip in 2006, average pricing for 100,000 user implementations has only dropped about 2% since 2005.
The prices and percentages listed above aren’t adjusted for inflation. Taking inflation into consideration (about 2.5% per year), the drops have been more substantial, adding another 5% to the decrease in prices since 2005:
- 500 users: 25%
- 10,000 users: 22%
- 25,000 users: 22%
- 100,000 users: 7%
Add rising staff salaries to the mix, and you would think that LMS vendors would be feeling a painful squeeze on profits. Strangely, that isn’t reflected in the number of learning management systems currently available.
Over the last six years, I’ve heard a lot of talk about impending consolidation and commodification in the LMS marketplace. The drop in prices in the last two years hasn’t decreased the number of systems available. In fact, new learning management systems continue to pop up all the time. There are more learning management systems available today (both commercial and open source) than ever before.
For organizations looking to acquire their first learning management system, or organizations considering a change in their existing LMS, this is all good news. Prices have dropped, and the selection has increased since 2005.
Topics: Learning management systems, Pricing data |
11 Responses to “LMS Pricing Trends (Installed Implementations)”
Comments
« Information Overload | Main | LMS Pricing Trends (Installed Implementations) »
LMS Pricing Trends
By Richard Nantel | March 28, 2007
2005-2007 comparison in the average cost of learning management systems (three-year cumulative pricing, installed implementations)
Topics: Learning |
March 29th, 2007 at 2:11 am
I presume the LMS covered in the graph are only the commercial, paid for ones? The fall in price is interesting, but it would be more interesting to see the rate of switch over from commercial to open source.
March 29th, 2007 at 2:27 am
There are a couple of drivers to be aware of:
1) Many LMS suppliers make their money on man-day billing and have optimized their offerings to keep growing service revenues. For these providers, a 20 percent drop in license fees on the low end is inconsequential as most of their billings are around professional service engagements, and
2) As any technology becomes more broadly adopted, prices drop. The LMS mid-market (sub-$100K deals) is just beginning to hit stride. This is where we will see the fiercest competion, the most price pressure and the fastest innovation in the next few years, not in the arean for the relatively small number of projects for the GEs and GMs of the world.
March 29th, 2007 at 6:33 am
Mike, the learning management systems analyzed for this data are all commercial systems. Our LMS KnowledgeBase does not at this time cover open source systems. Open source LMSs are covered in a separate report on open source e-learning.)
March 29th, 2007 at 9:52 am
[...] Nantel, Weblog March 28, 2007 [原文链接] [...]
March 29th, 2007 at 10:56 am
I’m sure that the data would even be more encouraging if our LMS was included. If you continue to run this study, and are open to including our LMS, then please let me know and I’ll be happy to get you any info you would like. If you are interested, you can find an overview of our pricing here: http://www.scholar360.com/pricing.php.
I see the trend of significant decreasing costs occurring well into the future. If you are familiar with Clay Christensen’s (The Innovator’s Dilemna) work on disruptor technologies, it is clear that this is the only way it can go. If you are intersted, check out his work: http://www.amazon.com/Innovators-Dilemma-Revolutionary-Business-Essentials/dp/0060521996/ref=pd_bbs_sr_1/103-6422622-4167828?ie=UTF8&s=books&qid=1175183683&sr=8-1
Also, is this open data? I’d love to see the breakdown and any other information that you are comfortable sharing. Are you hoping to publish it anywhere besides here?
March 29th, 2007 at 11:16 am
Glen: Thank you for your comments. Any LMS vendor is welcomed to be included in our research. (Unlike some other research firms, we do not charge vendors to be included in our research.)
I’ve sent you the information needed to access our LMS research questionnaire via e-mail.
The pricing data for the 63 individual learning management systems contained in our research is available in our online LMS KnowledgeBase 2007. We also publish this data in our “Low-cost LMS Report” and our “LMS Snapshot report.” We also provide profiles of individual LMS.
April 10th, 2007 at 11:54 am
It would be interesting to know what the average per person/year cost of the different categories is
May 10th, 2007 at 3:19 am
Dear Richard,
In your selection of LMS, you have not included Blackboard or Moodle any reason for that. In addition, what are the benefits to pilot LMS on grade 4 to 6 students?
May 10th, 2007 at 5:49 am
Dear Richard,
Kindly can you provide us with the detailed break down of the implementation price considered in your document of USD 255k for 10k users.
May 10th, 2007 at 6:16 am
Usman:
Moodle is presently completing our LMS research questionnaire. So, you will see Moodle in our research in the coming months.
We’ve contacted Blackboard in the past, inviting them to participate. Since Blackboard focuses on the academic market, and Brandon Hall’s LMS research focuses on technology for workplace learning, Blackboard may not feel need to be included. I’ll contact Blackboard today to see if they may want to reconsider. We often get requests for information about Blackboard.
About providing the detailed breakdown of LMS pricing, please see my post titled “Range in Pricing of Commercial Learning Management Systems.” This entry deals with specific prices rather than average prices.
February 6th, 2008 at 1:55 am
Hi Richard,
Did you had the opportunity of evaluating “LearnITy Enterprise Suite” which is a pure India Inc brand and is one the leading eLearning solution provider in the country?Will appreciate your feedback.