Learning management systems (LMSs) come in various shapes and sizes. They come equipped with different features and functionalities and cater to different businesses and organizations.
However, the term ‘hosted LMS’ can cause some confusion among organizations looking to implement the best learning platform for their needs.
In this article, we talk about what a hosted LMS is, the different types of hosted LMSs, their pros and cons, as well as what to consider when making the choice.
Disclaimer: The information below is accurate as of May 3rd, 2024.
What is a hosted LMS?
In a digital environment, the term ‘hosted’ refers to how a software solution, in this case an LMS, stores and manages its information.
A hosted LMS is a web-based digital solution that’s managed by an LMS provider.
Learning platforms provide online training, educational content, and learning experiences for various corporate training needs.
These can cover numerous use cases, including employee training, new-hire onboarding, compliance training, sales and partner enablement,
Companies can customize their LMS software solution to suit their specific needs, to develop, curate, manage, and deliver training programs and online courses to learners.
The LMS stores all relevant information in a secure location, tracks learner performance, and generates reports for better management and decision-making.
Learners can access the platform either via a browser or, depending on the LMS, a mobile app, complete e-learning courses and modules, interactive quizzes, surveys, and assessments, go over training material, or collaborate with peers and instructors.
Admins and instructors can design and implement online learning and training courses, manage users and workflows, or keep track of learner progress and certifications, among other details.
Since the LMS vendor is the one handling all the hosted solution’s upgrades, updates, backups, maintenance, and support, organizations have fewer responsibilities and overhead costs.
That said, there are a couple of LMS options to consider.
Types of hosted LMS
Among the many different types of LMSs on the market, companies often have to choose the type of hosting their system will use.
Hosted LMS solutions boil down to two main categories; self-hosted and cloud-based.
The main difference between the two is where the data is stored (hosted).
Self-hosted
Self-hosted LMS platforms are learning programs that organizations install and run from their own servers.
Oftentimes, self-hosted platforms are called on-premise or locally hosted.
This generally applies to smaller systems that companies can store on their servers and run over their internal networks.
Self-hosted LMSs provide full customization and control over how they are operated.
For example, companies gain complete control over data storage and security measures. This is essential for organizations with strict regulatory compliance.
Companies also have full deployment control and can select what hardware and software to use as well as how to manage the installation.
This, however, means that self-hosted systems need more maintenance, updates, and regular optimization.
Scaling these systems can also require additional infrastructure investment and an experienced in-house IT team able to handle all the necessary server management and system administration.
Cloud-based
Cloud-based LMSs are hosted in the cloud by the LMS vendor and can be accessed via the Internet.
The data is stored on a secure, third-party server, with the LMS provider handling all updates, maintenance, support, storage, and security.
It’s also for this reason that cloud-based or cloud-hosted systems are also called software-as-a-service (SaaS); because these services are provided by the vendor, typically on a subscription basis.
Generally speaking, these cloud-hosted LMSs offer a high degree of reliability and uptime thanks to a good server infrastructure and data security.
They also require less in-house IT know-how and responsibility, less upkeep, and more scalability.
Docebo is one such cloud-based LMS. Companies can use it to manage and design interactive e-learning courses with gamification features and can employ it in a wide range of use cases — onboarding, upskilling and reskilling, compliance, customer training, and more.
It has numerous LMS APIs, plug-ins, and integrations with numerous third-party tools, including CRMs, human resource management, communication, video conferencing, e-commerce, and content-authoring tools, among others.
With Docebo, organizations can also take advantage of social learning, a significant content library, and personalized learning paths.
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On a side note, this is also a good place to mention open-source LMSs, to help dispel some of the confusion surrounding this term as well.
Open source often comes in contrast to SaaS in that open-source LMS options have freely available source code that users can customize and host themselves.
This type of LMS can be either self-hosted or cloud-based but will require a high degree of technical expertise to manage, maintain, and customize it properly.
Open-source LMS platforms offer more control and customization potential, while SaaS offers more convenience and scalability.
While on the topic of drawbacks and benefits, let’s take a closer look at how self-hosted and cloud-based systems differ in terms of their pros and cons.
Pros and cons of hosted learning management systems
No LMS, regardless of where its data is hosted, is without fault.
Both self-hosted and cloud-based LMSs come with their pros and cons. These include the following:
Pros and cons of self-hosted LMS
By hosting the LMS on their own servers, companies can see several benefits.
Self-hosted pros
The key advantages of a self-hosted LMS are the following:
- Control: Businesses have complete control over the learning platform’s environment. This includes everything from data, security, hardware, and software.
- Customization: Self-hosted e-learning solutions can also be tailored to the specific needs of the organization. By having complete control over the system, there’s nothing stopping companies from customizing the LMS to their exact requirements.
- Enhanced autonomy: Companies are free to do their own maintenance, manage updates, and handle system performance however they see fit.
- Security: As with most other benefits here, self-hosted LMSs give complete control over data security. This can offer peace of mind to organizations that don’t want sensitive data to go outside of their internal network. They can allow external connections to their self-hosted LMS networks but can also opt not to.
- No ongoing service fees: Although there will be an upfront cost in purchasing the system, companies with a self-hosted solution will not have to pay for ongoing maintenance and support.
Self-hosted cons
The key disadvantages of a self-hosted LMS are the following:
- High initial costs: Aside from buying the LMS upfront, companies will also need to make an initial investment in hardware, software, and infrastructure able to support the self-hosted learning platform.
- Ongoing maintenance: Businesses are in charge of handling all maintenance requirements, which include regular updates, cybersecurity, performance optimization, and more.
- Operational costs: Self-hosted solutions need an experienced in-house IT team capable of handling all setup, management, and troubleshooting tasks. This means that companies will also have to consider the overhead costs associated with such an experienced in-house technical support team.
- Scalability issues: Companies also need to consider how well their LMS will scale if their organization grows. With a self-hosted solution, this also means scaling the infrastructure, which can be complex and costly.
- Risk of downtime and access restrictions: Any maintenance or technical issues can result in disruptions or downtime. Also, the self-hosted LMS is dependent on the internal infrastructure, meaning that off-site access or remote learning is limited to nonexistent.
Put simply, self-hosted LMSs provide a high degree of control and autonomy to users. However, they come at a price of high maintenance and overhead costs, difficult scalability, and remote accessibility.
Pros and cons of cloud-based LMSs
Cloud-based LMSs take a different approach and come with their own set of benefits and challenges that companies need to consider.
Cloud-based pros
The key advantages of a cloud-based LMS are the following:
- Easier access: Cloud-based learning platforms grant real-time access to every learner and from every device with an internet connection by default. This generally grants easier access, boosting learner flexibility and enhancing user experience.
- Seamless scalability: With no infrastructure to worry about, companies can scale their operations and introduce more users into the LMS without worrying about making significant investments.
- Security: Although companies will not be directly in charge of their data security, a good LMS will include robust security features to ensure sensitive data safety. These features can include things like firewalls, single sign-on (SSO), multifactor authentication, secure HTTPS connections, and Information Security Registered Assessors Program (IRAP) compliance, among others.
- Limited in-house maintenance: Since the LMS vendor handles all server maintenance, software updates, tech, and customer support, companies will not have to worry about or pay costly in-house IT team overheads.
- Cost-effective alternative: Most cloud-based LMSs have multiple subscription models based on specific features or the number of users. These can help organizations choose the best alternative that suits their specific needs.
Cloud-based cons
The key disadvantages of a cloud-based LMS are the following:
- Less control: Compared to their self-hosted alternatives, cloud-based LMSs offer less control over maintenance, support, data security, or system updates.
- Limited customization: Similarly, customization options are also available based on what the LMS vendor has made available. That said, the best LMSs, like Docebo, for example, have branding and white-labeling capabilities, which counteract this issue.
- Subscription costs: Most cloud-based learning platforms, particularly those under a SaaS model, operate on a regular subscription basis. Companies will need to decide whether a subscription or an in-house IT team is a more cost-effective alternative.
- Internet dependence: Because they’re hosted on remote servers, cloud-based solutions are reliant on the third-party server’s bandwidth and a stable internet connection. However, many LMSs include mobile applications that grant learners access to training modules and learning materials while offline.
To summarize, cloud-hosted LMSs sacrifice a certain degree of control and customization potential for the sake of flexibility, scalability, and convenience.
Choosing the best hosted LMS type for your needs
Based on the benefits and drawbacks of the two types of hosted LMSs, companies can now form a better understanding of what to expect.
When putting together a solid LMS business case, companies also need to consider the following aspects of their future LMS.
Budget
Budgeting is unavoidable when it comes to adding a new digital tool to your tech stack.
Many factors go into determining the short- and long-term costs of a hosted LMS platform, including the initial investment in hardware and infrastructure, maintenance costs, in-house IT team salaries, subscriptions, and other overheads.
You will also need to identify the potential ROI of the LMS software solution by considering the training benefits such a system provides.
It’s generally good practice to define your learning objectives upfront, identify the key LMS metrics (course completions, time-to-productivity, enrollments, employee retention, etc.) and communicate these with the vendor to keep them accountable for your success using their system.
Ultimately, the value of an LMS is based on output, not the system itself.
Features
When choosing the right learning system, it’s important to make a list of all must-have and nice-to-have features and see what each LMS offers in this department.
Many LMS vendors have different tier subscription plans based on the type and number of features a client opts for. It’s counterproductive to choose everything if you’re not going to make full use of everything you’re paying for.
Alternatively, you don’t want to miss out on certain key functionalities that would be essential for your long-term goals.
Some common LMS features include things like
- E-learning courses and content-authoring and management tools.
- User-management automation.
- Course and content libraries.
- Gamification and interactive elements.
- Social learning features like forums, chats, leaderboards, etc.
- Mobile learning capabilities.
- Robust data analytics and reporting capabilities.
- Third-party integrations.
Go ahead and use our free request for proposal (RFP) template when asking LMS providers about their offerings.
Scalability
It’s great to find a hosted LMS solution that caters to all of your current business needs and requirements.
But you also need to consider the long-term prospects of the organization and how well the system will handle those changes.
If your organization grows and takes on more employees, you’ll need to ensure them equal opportunities for continuous learning and development as those who came before.
The learning platform should be able to take on the extra learners and workload without skipping a beat.
Use case
Another aspect to be mindful of is how well the system caters to your specific use case.
Some LMSs are specifically designed for educational institutions, while others have corporate training in mind.
You’ll also find that some learning systems work better for healthcare organizations while others work for manufacturing, retail, or finance.
Likewise, consider what you’ll be using the LMS for, be it new-employee onboarding, upskilling and reskilling, compliance training, sales enablement, customer training and onboarding, etc.
Be sure the LMS you choose covers the specific requirements of your use cases.
Ease of use
Probably the most overlooked aspect of choosing an LMS is how user-friendly it is. Truth be told, it’s difficult to assess this without giving the system a try first.
Nevertheless, it’s a good idea to choose a system that has an intuitive user interface for learners, instructors, and administrators.
These systems need to provide a seamless user experience, optimize processes, and facilitate learning, not hinder progress.
Look for LMS vendors that offer product demos and free trials to get a sense of the system’s user-friendliness.
On a similar note, look for e-learning systems that offer solid customer support. You don’t want to encounter issues and interruptions and not have a team there to help you out.
Check online customer reviews and testimonials that highlight the quality of customer service offered by the LMS vendor.
Now over to you
A hosted LMS can bring numerous benefits to the table, and almost every organization can take advantage of such a system.
The main choice is between a self-hosted or a cloud-based alternative and which one will have a bigger impact on the company’s bottom line.
Feel free to schedule a demo with Docebo to try us out!