That depends on what you need and how much you want to pay for it.

I’ve seen cost estimates that run from $10,000 to $1,000,000. One of the $1,000,000 systems I saw was a hosted application that used Flash for graphics (and it ran really slow).

That doesn’t count the price of the Flash license, server hardware and installation or support. Even then it didn’t include the price of hiring someone to integrate an LMS into your existing website or content management system.

The LMS industry makes an easy target for jokes about overpriced software with bloated feature lists and a sales pitch that is more polished than the software itself.

The best LMSs have some serious competition as well as good value in a crowded field of open source alternatives that do much of what the expensive proprietary solutions do at a fraction of the cost.

This is especially true when you consider how many great open source Learning Management Systems there are and especially true when you consider how many free ones there are!

Before we talk about free Learning Management Systems let me make sure you know some basic definitions:

Learning Management System (LMS): A Learning Management System (LMS) has a set of applications and services designed to manage the instructional and administrative needs of an educational institution.

Software as a Service (SaaS): A software licensing model in which the provider delivers software over the Internet. The user pays for the service rather than purchasing perpetual licenses or software.

Hosted: Usually refers to software that has delivered as a service over the Internet. Users access the software via a network connection without having to install it on their desktop machine (although they could)

What is the cost breakdown?

Software as a Service LMSs charge a monthly fee based on the number of learners in your organization. If you have many learners then you will pay more than if you have few.

This is true whether we are talking about an open source LMS or a SaaS solution like Blackboard, Canvas or Moodle.

Hosting costs vary depending on how much hosting you need and where it will be hosted.

You can pay as little as $5 per month for one of the free Learning Management Systems. That run on a server in your own office if you don’t mind installing and configuring it yourself.

You can also rent hosting space from SoftLayer, Heroku or Amazon for as little as $25 to $100 per month (depending on capacity).

Also, pay someone to install and configure it for you if that is something that you want to avoid doing yourself.

If you have a dedicated LMS administrator, then he or she will probably spend between 10 to 20 hours per week.

Working with the LMS so we’ll consider that time to be the cost of maintaining the system.

If your company has an employee dedicated specifically to maintaining your Learning Management System. Then this figure will go down considerably!

If you need to hire someone to do that then we’ll consider the cost of hiring a dedicated LMS administrator.

Another important factor to consider is the cost of custom development. You can develop your own Learning Management System. Or else, you can have a team of programmers build your system for you.

If you pay someone to do the work then the cost will be higher than if you hire students to do it for you as part of an educational programming project.

The cost of custom development will depend on how much work is involved.

If this is something that you are going to outsource to a software company. Then that company will probably charge between $30 and $100 per hour for their programmers depending on their experience. Skill level and how much work they have done before on other projects like yours.

Finally, there are costs associated with integrating an LMS with your website or content management system.

This may involve adding or extending plugins, writing custom code or even hiring a programmer to do this for you if the solution doesn’t already include integration with WordPress or Drupal (or whatever your CMS is).

There are also costs associated with converting your existing content into a format that “plays nice” with the LMS such as video and audio files in .MP4 format instead of .AVI format for example.

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