Platform
Moodle
Without a doubt, Moodle is one of the most popular open source LMS options available today. It features dashboards, learner tracking, and multimedia support. This open source Learning Management System also gives you the ability to create mobile-friendly online courses and integrate third party add-ons. For those who want to sell their eLearning courses to the masses, Moodle has paired with PayPal to make the checkout process simple and staightforward. One of the standouts of this tool is the user community. Unlike many other open source LMS solutions, you can get answers to pressing questions almost immediately by accessing the online support database, and download pre-made eLearning courses that can save you the time and trouble of creating them from scratch. It’s worth mentioning that Moodle may be a bit more complicated for new users, but mastering the tool is well worth it if you want total design freedom.
Demo: https://moodle.org/demo/
Cost of an Open Source LMS?
Open source LMS is the one that is freely available with an open source code. This precisely means that you have access to the code for free and you can modify it to gain a high level of customization to suit your requirements. Since Moodle is the most popular, let us consider it during this analysis.
Let us look at the actual costs upfront to set-up and recurring costs for running a professional grade Moodle installation on an ongoing basis. For the purpose of this example, let us look at a total user-base of 3,000 users in a year with an expected traffic per month – not more than 500. Moderate level of customization required.
The good news: freeing yourself from paying off the license fee is a good decision.
| Moodle | Notes | ||
|---|---|---|---|
| License Cost | One-Time costs | Recurring costs | |
| Moodle License | - | - | Open Source |
| Sub-Total | - | - |
However, to run your system, you need more than just a code. There are other elements to successfully launch your LMS, run and administer it during the life time.
Additional Open Source LMS Cost elements
| Cost element (other than License Cost) | Moodle | Notes | |
|---|---|---|---|
| One-Time costs | Recurring costs | ||
| Server Set-up | $4,000 | It is not easy to predict the usage patterns upfront. You may need to set up a server and a hosting architecture to handle concurrency (simultaneous users connecting) Installing Moodle on a server takes 1-hour. But assuming you are running a mission critical operation, this may not the way to go. This is a minimum cost a professional IT vendor will charge who will speak to you, listen to your needs and recommend a proper server configuration based on your needs which can last you for a few years without upgrade. If you hire an experienced freelancer, he may do it cheaper. Lowest cost vendor may not be the best in this aspect! | |
| Site Branding and look and feel | $1,500 | We are assuming you would use a design agency or a designer to do this one-time task. | |
| Customization of features | $10,000 | Moodle is feature rich but that is a double edged sword. You will not need all the features as is. You will 100% need to customize to remove/hide or add or tweak the features that come standard. Let us assume low to moderate level of customization. Anything that changes the workflow of the ‘free’ system will cost upwards of 15,000 USD. | |
| Hosting | $3,000 | Two options here. Buy your own hardware or rent space in the cloud. It would be unfair to use ‘Buy your own hardware’ costs here so let us assume that you may use a solid hosting service like Amazon, Google, Rackspace or GoDaddy or something like that and pay monthly or yearly. 200 to 350 USD per month is not a big amount for hosting with a good company. Don’t even think about using your existing website to run Moodle! | |
| Security certificate (SSL certificate) | $150 | Let us not assume you have any single-sign-on needs and just need an SSL certificate Depending on provider. In order of costs - Godaddy, Comodo, Digicert, Symantec etc. | |
| IT Personal (full/part-time or Vendor) | $12,000 | If we assume that your vendor installs, this becomes a one-time cost but you will need someone to assist you with server related issues ongoing especially if you have 500-1000 plus users Calculated as 25 hours/month @ 40 USD per hour | |
| Administrator (full/part-time or vendor) | $14,400 | Whether you are doing the administration yourself or full-time or hire someone part-time, you will need help. Moodle is not simple to administer. Calculated as 40 hrs./month @ 30 USD per hour | |
| Administrator and user Training | $3,000 | Assuming that you need multiple administrators to be trained on using the LMS, you will need to train them to use the system effectively. The person installing your system would be the best person to do this especially since the system is customized. You will need it. Moodle is complex. Calculated as WebEx or GoToMeeting – 6-8 sessions of 2 hours | |
| Upgrades | $3,000 | Now this one is actually the most important cost element – no one considers this upfront very often and this is what may really cause distress. Especially if combined with item 3 Customization of features. Moodle rolls out at least 2 stable upgrades a year. Assuming you choose to upgrade once a year, this is the minimum you will have to spend to upgrade your system assuming moderate customization. If your customization is high, it could be even more! This cost will be directly proportional to the amount you customize your system upfront! So think before you customize! Vendors love to set up and customize upfront. But when you ask them to migrate or upgrade after 2 years and handle the customization they did then – it is likely that their enthusiasm for the project will not be as high! I am talking about the same vendor. Take the customized Moodle to another vendor for upgrade and don’t be surprised if you don’t get a quick response. | |
| Sub-Total | $18,500 | $32,550 | |
| Total Cost for 3 years | $18,500 | $97,650 |
The costs we have considered above are conservative so that we don’t have a bias! Depending on which city or country you are in, this is a cost, which will not be way off. Some Moodle administrators may say we are too high or too low! Apologies to both but we had to use some numbers in our assumptions.
If you are going to manage Moodle yourself, just remember to calculate your costs plus the time that you will be doing Moodle Administration instead of focusing on running your business or your training department.
If you consider a conservative 75,000 USD salary for yourself (given that you know PHP/MySQL, Web-design and server administration!) then if you consider your time is worth 40 USD per hour, then if you spend 100 hours (2.5 weeks) over a 2 month period to set up the system and customize, tweak etc. you server you have spent 4,000 USD for set-up cost. Assume that you spend 25 hours per month or 40 hours per month on your system admin etc., which means you are spending close to 1,000 USD per month or 1,500 USD per month of your time.
Now, let us do a simplistic calculation for a proprietary LMS, which is licensed per user etc. and fully hosted.
Taking an example as above; total user-base of 3,000 users in a year with an expected traffic per month is not more than 500. Moderate level of customization required. To keep this fair, let us assume that this fully managed LMS service also requires customization and for argument sake, let us assume that the cost of customization will be the same.