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SaaS (Cloud) LMS OR Hosted LMS? Key tips to make your decision easy

• 3 min read

Being into learning solutions and learning management software sales for many years now, I always come across a very common question from my clients, “Shall we go for SaaS LMS or shall we go for Hosted LMS?”  And I thought it will be a good idea to present some thoughts on this as I have seen both these models very closely in the process of getting implemented.

Cloud LMS vs. Hosted LMS

Before I begin to share my thoughts on this, it is very important to understand the definitions of both the models. SaaS, Software as a service model of Learning Management Software is accessible via the web, and the LMS is hosted on Cloud. Clients access the application using a web browser, and are billed by the month or by another metric that measures use, such as number of registered users or projects.

However the hosted model is the one in which the LMS is hosted behind the firewall and the client manages it with the support of the LMS vendor.

The decision of whether to go for a SaaS or for hosted LMS solution mainly depends on few of the points brought up below:

How to decide on SaaS or Hosted?


This is the most important aspect of decision making. Hosting does add to the recurring cost of your LMS project and many a times is considered as only onetime cost. In terms of scalability one needs to upgrade and maintain the hosting environment and requires 24/7 support. Hence, when considering your LMS decision, do evaluate whether you have the in-house hosting capabilities. Do check for the expertise required to maintain the LMS in the longer run and factor in the cost for that. If you find that the cost is within your budget, you can consider hosting within your firewall, otherwise it is always advisable to leave hosting up to the LMS vendor and enjoy the uninterrupted service that comes with that. In such scenarios SaaS model is always preferable.

LMS Architecture

Usually SaaS LMS has a multi-tenant architecture. Whereas the hosted model will always be a single instance with the separate infrastructure requirements. The separate single instance installation will always require some in-house expertise, someone who can continuously manage the application and ensure smooth support for the end user. In multi-tenant architecture the maintenance headache is taken care of by the service provider and you do not have to worry about it.

Upgrades & Fixes

Hosted model is preferable when there are many customisations required. However one must understand that customisations imply extra cost and that brings in the cost of future upgrades as well. In SaaS model upgrades and fixes are carried out automatically and there is no need to pay separately for those. This proves very cost effective in the course of changing technology and changing learning trends.

TCO & Licensing Model

Even today, an LMS is still not yet considered the ‘mission critical application’ by many organisations, however it has been proven that technology adoption is the key to success for L&D. Hence implementing an LMS is strategically important and ought not to be delayed. If the initial investment is a challenge, SaaS offers you greater flexibility with its monthly active user plans. You can pay monthly or annually, and pay only for the exact number of users. This allows you to manage your TCO (Total Cost of Ownership) effectively without compromising on the LMS.  In hosted model the initial cost of implementation will always be higher and future maintenance as well. Hence it becomes tough at times to convince higher management to adopt an LMS. You can decide based on the budget and adoption of your LMS implementation idea, and start by testing the waters with a SaaS LMS model.

To summarise, there is no fixed rule to say which LMS implementation is right and which is not and it completely depends on your business requirements. I hope the above points will help you decide which way you want to go!

In case you would like to discuss your business case with us on what type of LMS is best suited to your requirements, whether SaaS or Hosted, the Docebo team will be happy to assist you! Feel free to contact us at any time!

Amol Shinde – Solution Consultant at Docebo India

Feel free to contact me via Twitter ( @amolbshinde ) or Linkedin