When Does a Cloud-based LMS Make Sense?

A few years ago, I am quite certain, I would have been fighting this “cloud” concept tooth and nail. There was something about having my own staff running my own servers behind my own firewall that provided a sense of security and control. To an extent it did, and the IT staff would be the first to man the ramparts to fight off having anything living outside the firewall – much less allowing anyone outside to get into our systems. I feel their concern, and I respect the need to protect the network and data resources behind the firewall. So does that make a cloud-based LMS a better solution?

Total Cost of Ownership

To define best solution, the considerations should include a couple of key points. The first is Total Cost of Ownership (TCO). TCO is something that is being largely overlooked in the questions I am beginning to see surface in several of the networking groups I troll each morning. Costs are being gathered in order to make LMS vendor comparisons. Costs are being compared to make must-have feature and function decisions. Certainly, both are important, but they are only focused on the details necessary to make the acquisition of the technology. What about after the honeymoon is over?

I recently have done a lot of work in the Materials Handling business, and there is one statistic that methinks may be more universal than we might first believe – the comparison of acquisition costs with the costs of management and on-going maintenance to sustain operations. While no one drives a LMS around to stack refrigerators or thousand pound rolls of paper stock, the LMS does represent a drain on human resources necessary to optimize, administer, and effectively service the user population. Acquisition may ultimately represent only a fraction of the TCO. That leaves the lion’s share to keep the systems on-line in optimal running condition. And that TCO number is not what I am seeing potential buyers seeking, and that’s a mistake waiting to surface after the honeymoon is over.

In the heavy equipment world the ratio is 20:80 – 20% to acquire and 80% to maintain through life of the unit. I searched high and low for the same kind of ratio numbers for LMS purchases and the post-purchase maintenance and operations costs and came up empty. I doubt it as extreme, but I share the ratio for no other reason than to posture that one exists…I just could not lay hands to it. What I DID find were plenty of LMS purchase versus cloud-hosted LMS comparisons. That discovery led to this post.

Of the resources I discovered, here is a link to one nifty little TCO calculator I ran across courtesy of the folks at G-Cube. You can download this and run your own numbers. Not to spoil the suspense, but the results will pretty much point toward cloud-based LMS is the way to go in most all cases. This should not come as a surprise because there is no need to own anything, and by “anything” I mean applications software, app servers, content servers, database servers, web servers, and the ever-present surprise of SQL database licenses that have the potential to eat one’s lunch. All those pieces and parts fall into that +/- 20% [if that’s the right/reasonable %] of acquiring your own bright shiny LMS.

One key element of what I found missing in the TCO Calculator was the human resources component of the up-front LMS efforts required to build a functional, scalable taxonomy. Another was the consulting necessary to sort out the reporting requirements within the stakeholder groups who will require non-standard reports…and they will. A skill set that is often overlooked is having someone on staff…or access to someone…who can write database queries. Of all the chaos endured post-GoLive, reporting was the biggest pain in the pahtukas my team had to endure. My advice is simple, do not under-estimate the time investment and the skills required to build the taxonomy for your course catalog, or the reporting requirements; the latter more likely to surface when stakeholders need data the canned reports cannot provide…and they will. I wrote about both of these eventualities recently in LMS Terrors: Reporting & Taxonomy should you wish to go there.

Considering Software as a Service (SaaS)

Having been the proud owner of several different LMS platforms over the last 15 years or so, I look back and wonder why I had been so fired up to have “my own box”. True, cloud-based anything was still somebody’s pipe dream; options were limited to lease or own or build my own, and have been down each of those paths. Given those same choices today, I would view cloud-based services, or Software as a Service (SaaS) options, as very viable option. Cloud-based architecture holds a rapidly and sensibly growing appeal.


The cost of entry is minimal. There is nothing to buy, no licenses to purchase, and no hardware investment, and depending on the provider you choose, some will not require a long-term commitment. Given the TCO is going to be lower for that reason alone, what is left to drive the decision. For starters, there is no need to have resources in-house to administer and keep the systems alive, backed-up, updated, patched, or upgraded.

As a learning solutions architect, I believe the question is not so much about the technology as it is the learning environment to be supported. The question “Under what set of circumstances do cloud-based solutions make “learning environment” sense?” becomes a key driver. I think there are several circumstances that lend themselves to a perfect fit in the cloud.

Serving External Learning Populations

Consider a premises-based LMS already in captivity. Should you dump it to head to the cloud? That answer does not come so easily and requires a deeper analysis of what is already paid for and what costs are sunk into outright ownership. Many find the answer lies in the “If it ain’t broke…” line of thinking unless the TCO is ridiculously high to stay in-house. Actually, I think a couple different questions need to be examined – “WHO is the intended learning population, and WHERE are they located?”

If everyone is in-house [behind the firewall] on the intranet, even if it is a VPN connection from Jupiter, things are controlled from the database structure to the image burned into every device accessing the LMS. Everything is sweet until someone suggests extending learning content to an external audience – in other words – External Learners. Who are they? Consider expanding learning content to the customer base, maybe even to vendors or suppliers, maybe even to university/college interns or mentoring programs, maybe even to affiliates and value-added reseller (VAR) programs. Cool, let’s extend our learning ecosystem and provide learning opportunities to everybody. Not so fast.

Having been down this road recently, I can vouch for the unanticipated agony of suddenly serving a population outside the firewall, and…oh…it gets much worse…an environment where almost every one of the external learners has a different computer set-up. Many never update anything, from browsers, to Java, to Flash players, to [insert any-kind-of-regularly-updated-stuff here]. Building content that worked flawlessly in our controlled inside world had a tendency to blow up. To resolve this we had to handle near duplicate versions of each course having an external learner-facing posture to serve the mish-mash of end-user configurations on the outside. Those issues do not go away just by being in the “cloud”, but they existence of duplicate course content is in a different world, and administration just got a whole lot easier.

Okay, so the content implications were a pain to manage in one system, but the other painful situation was trying to get the IT security folks from blowing a gasket over allowing “outsiders” behind the firewall. In reality, they never did. They were plugged into a DMZ [a.k.a. more servers, more databases, more licenses] just outside the firewall, but we had to build all sorts of hand-offs and database gyrations to get it all to work together. I’m no database guy as you can probably tell in my descriptions, but the whining and moaning of IT and the database techies remains a fresh memory. Had we been able to plug in a cloud-based solution to serve that external population, life would have been so much better and would have greatly reduced the imported beer expense necessary to bribe IT guys to play along.

Those With LMS Fear & Hesitation

There is another population that is a perfect “cloud fit”, and it consists of those companies that are not quite sure the investment in e-learning is the right path to take, and dropping the dime on a new LMS is a risk too great to take. The last thing they need to consider is buying a box, even a small one, to run a test implementation. Do a test, but do it in a cloud-based environment. You have nothing to buy, no licenses to purchase, and no hardware investment. Depending on the company you go with, some will not even require a long-term commitment. Being in a cloud, the architecture is scalable. Start with a small test, and nothing needs to be reconfigured to accommodate expansion when you decide to scale.

The biggest exposure to risk is the upfront time and investment made to build or buy the learning content. In reality, the content is likely to cost more than the system to deliver it, so why not remove the “technology risk” altogether?

Those with LMS Envy

Another population consists of those companies who do not have the resources to make the leap into a LMS but would really, really like to have one of their own. By resources, I mean investment funds and/or in-house techie types to administer a LMS. IT/IS may be non-existent for the most part in some smaller organizations, and that should not represent a show-stopper when they have a desire to improve the reach of learning. With cloud-based technology there is absolutely no reason a 20-person business cannot have their own LMS.

Those in a Hurry

Wanna LMS? Done! One could be live the same day you ask for it and with most of the primary options intact. Remember, the cloud is already there. Nothing needs to be delivered. The system is larger than anything you would or even could buy on your own. It truly is becoming a plug and play world with this technology. Certainly if there are going to be interfaces built with the HRIS systems for updating user databases and things like that, more time will be required, but we are talking days, not months. If you want the portal skinned to look like your company intranet or something that might be product specific, more time is required, again not an extraordinary time requirement.


Does it sound like I’m pushing cloud-based architecture? I confess it is an attractive enough option that it should be part of every LMS evaluation effort. In those circumstances I described, I think it is a no-brainer. There are applications where cloud-based LMSs are perfect for Fortune 100 companies serving niche learning micro-systems tucked away in the corners of their learning ecosystems. On the flipside, a cloud-based LMS could serve as the entire learning delivery system for companies not nearly as large and complex and yet their learner populations have access to all the same features, most of which have been largely out of reach. The “cloud” is putting clout into the hands of even the smallest learning organizations.

The part of a cloud-based solution that has me so stoked is the potential for the LMS to truly be only part of the solution. What? Hang on…hear me out. Integrating LMS architecture is a great place to start, and I feel strongly that it should come first. But…there is more learning on the table, and a cloud-based architecture is an awesome venue from which to migrate beyond the LMS and into the world of performer support. This is the post-training environment where the learners are downstream from training and inside the workflow. A cloud-based environment made accessible through an inexpensive learning and performance portal via smart phones, iPads, laptops, or whatever comes next is defining our “next generation” of learning and it is surfacing @ the point of work. Hence, the LMS is only part of the solution.

So…you thought you could get away from my blog and not hear me reference “learning @ the point of work” did you? Sorry, it is just that important, and with the flexibility and scalability and ubiquitous nature of cloud-based services, it just seems to make perfect sense to me. If serving learning from the cloud is not part of your strategy it should at least be investigated. Who knows what you may be leaving on the table?

If you are not sure how to make sense of it, or whether it is truly a fit, contact me. Architecting learning environments is what I do.

Gary G. Wise
Workforce Performance Advocate, Coach, Speaker
(317) 437-2555
Web: Living In Learning