Open Source vs Commercial – the cost of ownership

At some point, an organisation realises that a Learning Management System is the best way to track and report the activities of a training program.

At that point, the there are three possible directions:

  • Create a custom LMS;
  • Use an open source LMS; or
  • License a commercial LMS.

In this article, we explore two of these options. The first option, creating a custom LMS, certainly has possibilities, but at the end of the day, it is an extremely significant effort, and the end product you have will only be as good as the developers you find. If you find the wrong team of developers — and there are many of them out there — this could be a disastrous decision!

Most companies, under short timelines, limited budgets, but clearly defined requirements that must be executed within these parameters, are not going to be able to go this route.

Once we exclude the option of creating a custom LMS, the two possibilities left are using an open-source LMS, or licensing an existing commercial LMS.

On the face of it, this decision seems like a no-brainer: isn’t the open source LMS “free”? And isn’t free good? And if something is free, why should we pay for an alternative?

Well, the answer is very simple: there really is no such thing as a free lunch, and there are two basic reasons for this, opportunity costs and total cost of ownership.

Let’s first discuss the opportunity costs issue: suppose your LMS needs to do A, B, C, D, E, and F, but it only does A and B. It turns out you take quite a productivity hit by not having C through F, and that productivity hit affects the bottom line to the tune of, we will say, $100,000 a year in unrealised income.

So by not being able to realise the productivity gains, the “free” system actually ends up costing $100,000 a year.

But that’s not all: once you factor in the concept of total cost of ownership, you are now in the realm of hard costs, not just unrealised gains.

It turns out that “free” system actually may cost, when all is said and done, much more than the commercial system.

Let’s cover this total cost of ownership issue a little more closely. Generally, when people think of the costs of an LMS, they think of the licensing fee, but the total cost of ownership of the LMS  is more than just a licensing fee.

Many of these costs have to do with the various factors that need to be addressed by any robust LMS, which include:

  • Security: the handling of user data, how to defend against various kinds of security breaches and how to define system access & rights;
  • Adoption: how easy the system is to use, how usable it is and ease of training;
  • Scalability: adding users;
  • Availability: uptime, downtime and the impact of version upgrades;
  • Environment: building security and high performance; and
  • Integration: the ability to share data with other systems.

Once these factors are taken into account, the hidden costs of the open-source LMS are suddenly revealed, as you seek to answer these questions related to the above:

  • Who is going to maintain the open-source code? Is it going to be steadily maintained, or is it going to be abandoned, as several open source projects have been in the past?
  • Should we install on our own servers or have a hosted solution?
  • If we install on our own servers, who is going to take care of that?
  • Who is going to handle security and integration issues? If we upload third-party off-the-shelf courses, are we going to have interoperability issues? If we do have interoperability issues, who is going to resolve them?
  • How do we want to customise the system from a functional perspective?
  • How will we customise the system from a user interface perspective, if administration is difficult, confusing, and not user friendly?
  • If the reports we’re looking for are not available, how easy will they be to create?
  • If the help materials within the open source files are not adequate, will we be able to update them ourselves?
  • How many developers will be required for any and/or all of the above? Should these developers be kept on staff, or should we outsource? If we outsource, how do we ensure continuity?
  • Will plug-ins be required to initiate the features we are looking for?
  • If we utilize plug-ins, and we subsequently upgrade the source code, will the plug-ins break?
  • If the plug-ins break, will we have access to the staff and developers that can fix the issue, or do we have to wait for the original developers of the plug-ins (a largely volunteer team on no particular deadline) to fix the problem?
  • How are upgrades going to be handled?
  • What do we do when something goes wrong with the system in real-time and with live users? Do we have the processes necessary to handle these circumstances?
  • If our key IT person is sick, injured, or otherwise leaves the company, what is our backup plan?

As you begin to ask questions like these, you realise Moodle and other open source LMS/LCMS solutions cannot really be described as “out of the box”. Yes, they provide some great features, but their ace in the hole is the ability to customise what they give you out of the box, and and allow you to continue to tweak as you build, add on and develop.

Once you go down this route, you realise there are a great number of associated costs, and at some point you begin to ask the question: “Does it really make sense to spend a great deal of money to end up with something a year down the road which we could have had at a lower cost right now?”

In short, going down the open-source road is not necessarily a road without pitfalls and potholes. Before you go down that road, make sure you do the following:

  • Preparation is key: define your strategy and have your course content/requirements in mind before analysing the decision;
  • Look for solutions that offer free trials so you can get to know whatever system you are seeking to initiate;
  • Deeply analyse your total costs of ownership (in terms of both development and maintenance);
  • When you’re evaluating commercial solutions, get to know the support team – you may be calling on them for assistance and a product is only as good as the people supporting it.

Instead of weighing the decision of “free” versus fee, focus on your requirements and the total cost to initiate them.

If the LMS fulfils your requirements while falling within your five year projected budget, you’re good to go. Ultimately, whether the system is free or not to start is irrelevant if the platform doesn’t meet your needs and your online learners expectations, and ultimately fall within, the budget related to your total cost of ownership.

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