SaaS LMS vs. hosted LMS: Why the SaaS LMS rules e-learning

• 7 min read

A SaaS LMS, like most of your data these days, lives in the cloud. 

For most of us, we trust the cloud to store a lot of what is precious to our everyday lives. It holds everything from our recently visited spots in our maps, to all of our photos and movies, favorite apps, passwords, music – you name it, and the cloud is probably helping you out with it. 

Because the cloud has proven to be so powerful and simultaneously super easy to work with, SaaS has become one of the primary infrastructures that powers modern learning solutions. It certainly has proven its magic in the last decade, and with that, L&D teams are able to give learning more reach (with less maintenance) than ever before. 

In the past, the hosted LMS was the only way to do business, but future-forward businesses have moved into a new age. The cloud LMS is both king and queen, and by the looks of it, it’s here to stay. 

The SaaS LMS keeps up with the times brilliantly. In this day and age, kids have hover-boards, our iPhones have facial recognition, and self driving cars are being introduced to the public. In a world where we constantly move forward and push new boundaries technologically, the cloud, and more specifically the SaaS LMS, is just another part of that growing family.

Here’s what learning powered by a SaaS LMS looks like vs. its predecessor: the hosted LMS (spoiler alert – there’s no competition between the two).

Related: What is an LMS?

Back to the basics: What is SaaS? 🤔
What is a hosted LMS? 💾
Why is the SaaS LMS more popular? 💝
A final word of advice 💡


Back to the basics: What is SaaS? 🤔

SaaS stands for Software as a Service which, much like your iCloud, Google cloud, or Verizon cloud, stores your data for you and hosts a service through the cloud instead. 

The cloud is what makes it possible for us to access most of our daily essentials. iCloud and iTunes, for example, have allowed us to do away with the skips on our CDs and DVD’s, or having to physically print out photos. With the cloud, you’re able to store and access different types of data as long as you have access to the internet.

The days of hard drives, floppy disks, and burned CDs have all very quickly become a thing of the past, and similarly, the hosted LMS has been reimagined with SaaS. ✨

SaaS helps mitigate challenges similar to those that one would have with a floppy disk or hard drive storage (hallelujah). This shared software is what enables e-learning solutions and cloud-hosted LMS solutions at large to provide such high quality and user-friendly learning experiences

Before SaaS became so pivotal, especially in LMS software, there was the “hosted LMS“. The hosted LMS is sort of vintage by this point (but not in the best of ways).

Related: From cloud and SaaS to capital and success


What is a hosted LMS? 💾

The hosted LMS is an alternative to SaaS learning management systems. This is where you have to install hardware or software onto your device to access training courses, which means that a lot of times, accessibility to your learning tools is limited. Imagine your learners on a leash: in a hosted LMS, your learners can only hop onto training with devices that have this specific software installed (not ideal). 

Because you have to install the proper equipment into your servers, it’s commonly noted that this more ‘old school’ way of delivering online training requires more maintenance than cloud-hosted LMS platforms. Once you install the software, you also have to manually perform all of the upkeep and necessary updates yourself.

This would be like the equivalent of having to manually install and update all of the apps on your iPhone yourself (but way more difficult) as opposed to updates being conducted automatically. In a hosted LMS, this includes updates for each individual add on and integration (we don’t know about you, but that sounds like a lot of heavy lifting for no good reason). 

Some people decide to bet on a hosted LMS because they think that the extra legwork will result in cost savings. Unfortunately, this isn’t usually the case. 

The hosted LMS requires a ton of human power and time to maintain and keep it updated – all of which has revenue tied to it. The maintenance for a hosted LMS usually isn’t very intuitive either, so devoting an IT team to keep it running is pretty standard to make sure it continues to run properly. You’re also paying for the hosting plans for different plugins, scripts, or video content, on top of what it costs to get LMS plugin integrations. The cheaper route? Not so much. All of these costs really add up (to a lot). 

Related: 10 ways to calculate your return on investment for your LMS


Why is the SaaS LMS more popular? 💝

At Docebo, we stand by the idea that learning never stops. That means that, whether you’re focussed on extended enterprise (partner, customer or member training), employee training, onboarding, or corporate training, people need learning technology that is easy to use, easy to automate, and accessible. 

Training programs should be able to happen in real-time, through online learning which just cannot be done without more modern solutions. Here are some of the primary advantages of a SaaS cloud-based LMS:

  • The need for speed (of deployment) 🏎️
    Gone those days when an LMS used to take forever to launch and deploy. A cloud LMS prevents unnecessary delays in getting online courses and corporate learning in front of audiences. With a SaaS LMS, you can quick-start learning without needing a highly sophisticated IT taskforce to charge the operation. When dealing with a SaaS LMS, there’s nothing to install or build out from scratch since the entire infrastructure is pre-built. The set-up is just for your instance. With quicker time to deployment, your audience can be up and running in no time and, because of this, corporations are saving time and gaining revenue.


  • Usability that’s a piece of cake 🧁

Because you don’t need your whole IT taskforce in order to maintain and enjoy an e-learning platform, learners and admins have way more control over their experience. Different authoring tools and integrations make it possible for the user experience and training materials to be top-shelf without all the hassle of upkeep. 

In addition, with a SaaS LMS, any new upgrade is also implemented across all instances. Nowadays, there’s no need to worry about the latest features being activated in the LMS since, in the case of a SaaS LMS, the upgrade process is automatic. This saves you the hassle of upgrading with new modules like you’d have to with hosted solutions (we’ll skip the “back in my day” tangent). 


  • Lower TCO (Total Cost of Ownership) 📉
    If proving ROI in order to build a business case is your roadblock, there’s good news for you. Since your SaaS LMS cuts down on all of the maintenance costs, (infrastructure, upgrading, branding, fixes, features etc.) it makes this training platform more cost-effective. Generally, LMS vendors deal with all that mess for you, so that when you go to your boss with the total cost of ownership (TCO) of an LMS, you get an easy nod of approval.  


  • You can grow as you go 📈
    Rarely do we like to buy a house, car, or even a pair of shoes that we know will be outgrown a short time after we purchase them. Training needs are no different, and ideally, no matter which LMS provider you go with, you want to ensure you’ll be able to scale and grow. Why? Because as your business grows, so will your training needs. When you’re growing your learning paths, you’re not just developing talent – you’re growing revenue.

    A SaaS LMS offers high scalability since you already have the infrastructure in place. Even as your audience gets bigger, your learner’s experience does not suffer or stall out with new users.  

A SaaS LMS vendor that tops the market (we know a thing or two about that 😉) ensures that the platform and the infrastructure are kept up to date to match the changing demands of the market. Also, from a technical standpoint, the architecture of the LMS is such  that it wont glitch when the number of users spikes. 


  • More flexibility and bandwidth 🤳🏽

Learning opportunities can open up a lot of doors for you, but it has to be able to stretch. In today’s competitive world, every organization needs its employees to be kept updated with the latest information and knowledge, and a cloud LMS is the only one for the job. In the same vain, modern audiences are also used to mobile learning (we’ve all tried a life-hack or two on Youtube before) and will take to it like a duck to water.

Being able to access e-learning on a mobile device is pivotal. Modern SaaS-based learning solutions can be accessed via smartphone, PC, tablet, and anything else you can think of, unlike the hosted LMS. As long as there’s an internet connection, your audience is golden. This allows a better reach for audiences who are always on the move, traveling for work, or just want to train after hours.  

As another example, let’s talk extended enterprise. Opening these doors doesn’t just happen (unless it’s with Docebo). You need e-commerce functionality, training content, and the ability to conduct partner, member, or customer training. Even if you’re solely focused on employee or corporate training, the ability to conduct webinars, include blended learning, and enable gamification all drive engagement and revenue. All of the above is made possible through a cloud-based SaaS LMS. There’s just no question about it. Open source or hosted learning programs just can’t stretch as far as a SaaS-based model, which means there’s less it can do for you in the long run. 


  • Seamless Integration with third-party software 👩🏻‍💻
    Most of the time, organizations require their HRIS data or CRM data to be integrated with their LMS for easy reporting. The SaaS based LMS makes this easier than ever with readily available APIs that help the LMS and different systems play nicely together and communicate well. Usually, when you’re operating with a cloud-based vendor, these integrations don’t come with steep fees like they would on a hosted system.

Related: E-learning as a service and SaaS LMS: Drivers & needs

A final word of advice 💡

Keep your head (and your LMS, and its data) in the cloud.

SaaS-based learning management systems that are hosted in the cloud are more cost-effective, easier to use, and offer more flexibility and time-savings. They’re also better suited for a future forward learning strategy that operates much like the rest of our technology: through the cloud. 

While the hosted LMS gave us a good place for the original learning management system, it’s time to pull the plug. As your learning grows, scales, and becomes more innovative, it’s time to consider thinking about where you want your future-friendly learning program to live (hint: it shouldn’t live in the past).