LinkedIn’s 2020 Workplace Learning Report states that “57% of L&D pros expect to spend more on online learning” in the future. If you’re one of those professionals, you want to optimize your budget by choosing the right learning management system (LMS) type for your business.

LMSs come in a variety of types suited to different company priorities and employee learning styles. By understanding the various kinds of LMSs, you can make an informed decision for your organization.

This is a decision you’ll want to think carefully about before moving forward—switching to a new LMS 6 months down the road is a huge headache. But choosing the right LMS is a golden opportunity to kick your learning programs off with a bang and instill a culture of growth and learning among your employees. Along with this article, our RFP template can help you make the very best choice for you and your team:

RFP template

LMS deployment models

As Sumo Logic puts it, software deployment consists of the actions needed for users to be able to use a software. The type of LMS deployment model determines how you set it up for initial and ongoing operations.


Cloud-based LMSs run on cloud computing—computing delivered over the internet from another company’s infrastructure. In other words, the LMS provider runs their platform’s hardware and network on their end while you access the LMS on the internet.

  • Pros: Cloud-based systems are the most efficient for remote learning, which means your employees can learn anytime and anywhere that is convenient for them. The cloud delivery model allows many LMS providers to charge you for only the features you’ll use, saving you money. Since cloud LMSs have such flexible features and pricing models, they also enable you to scale your learning functions as you go. Most cloud LMS providers also take care of ongoing maintenance for you.
  • Cons: Your cloud provider partner owns the software’s server, leading to possible issues with downtime and control. If you plan on using your LMS for a long time, a cloud service’s ongoing costs could exceed the upfront price of an equivalent platform over time. While cloud providers strive for secure services, the internet-based nature of cloud LMSs can lead to security issues you wouldn’t have with other deployment models.


On-premises LMSs run on your company’s infrastructure. Your organization will install this type of LMS on-site using your hardware and network.

  • Pros: Since an on-premises LMS runs on hardware in your facility, you can access it offline (this is also a feature of some cloud-platforms that offer downloadable content). Compared to online solutions like cloud LMSs, on-premises LMSs often have better security because they limit access to authorized personnel. With your LMS installed on on-site hardware, you’ll also have more control over your platform’s features and where you store its data.
  • Cons: In exchange for a higher level of control over your LMS compared to online software, an on-premises platform will require ongoing maintenance and IT support. This type of LMS deployment model also has a higher upfront cost compared to many because you’ll have to pay for its software, infrastructure, and human resources. If your workforce is forced to go temporarily remote, you’ll completely lose access to your LMS.


An open-source LMS comes in the form of a base code that you download and customize according to your company’s needs. You’ll get access to the underlying language that controls every aspect of the LMS to adjust its features.

  • Pros: Thanks to the unrestricted nature of open-source software, open-source LMSs have little to no cost. Your team will have full access to the software’s code to modify as needed. With control over the source code, your IT experts will be able to change just about any aspect of the LMS, including user interface and content format.
  • Cons: To deploy an open-source program, your IT team must have advanced programming knowledge and offer full support. You’ll also have to supply the infrastructure and network yourself. Some open-source platforms have paid add-on features that increase costs.


If you can’t find an LMS deployment type that fits your preferences, you can custom build one for your business. Companies who do these either build a solution in-house, or hire a third party to create a custom solution.

  • Pros: Custom-built LMSs have the most potential for customization out of all the deployment models since you create the software from the beginning. You’ll be able to tailor your LMS features to your learning goals and budget. With a custom-built LMS, you’ll also have full control over your user interface, including branding.
  • Cons: A custom-built LMS has no outside support or infrastructure, meaning that the owner must pay for the equipment, expertise, and human resources required to create it from the bottom up. With no existing resources available at the start, custom-built LMSs have a slower deployment process than other LMS deployment types. Once you have your customized LMS ready to use, your IT team will have to provide all of the tech support and maintenance.

LMS pricing models

Different types of LMSs have pricing models that range in cost and payment delivery. The LMS cost options available allow organizations with various budgets to invest in an LMS.


As the name implies, free LMSs cost no money to install or run. This type of LMS often comes in an open-source deployment model.

  • Pros: The top benefit of a free LMS is that it’s free! If your company wants to try out an LMS, a free program can make a great starting point.
  • Cons: A free LMS often lacks the features or support provided with other LMS pricing models. It might have limited features or need more human resources to run effectively, depending on its intended audience. When you’re ready to upgrade to a solution with more features you may be forced to start your learning programs again from scratch.


Freemium LMS software starts at a free price and includes optional features or functionality for an extra cost.

  • Pros: Freemium LMSs start at no cost and increase in price from there, making them another cost-effective option. You’ll pay according to the functionality you want, sometimes letting you save on the features you don’t need.
  • Cons: The free version of a freemium LMS can have very limited features to encourage you to pay for an upgrade. As eLearning Industry points out, the freemium model’s variable costs and uses make it difficult to compare freemium LMS prices to other platforms.

Software as a service (SaaS)

Software as a service (SaaS) is a software model that delivers features through a cloud-based model (see above). Microsoft frames the SaaS model as “renting the use of an app for your organization.”

  • Pros: SaaS LMSs often come as cloud software, empowering users to access them from anywhere with an internet connection. They also save on the upfront costs associated with a one-time software license. Your SaaS provider will handle support and maintenance on your behalf.
  • Cons: The drawbacks of a SaaS LMS overlap with the cons of cloud-based software. A SaaS LMS has costs that can add up after long-term use, less technical control, and a potential lack of offline access.

One-time / perpetual license

A one-time/perpetual software license requires a single purchase to use instead of ongoing payments.

  • Pros: Once you buy a one-time LMS license, you can use the software as much as you want. A perpetual pricing model optimizes the total cost of ownership long term, making it ideal if you want a more permanent solution.
  • Cons: A one-time LMS license has a much higher upfront cost than a SaaS LMS, increasing the barrier to entry. It also requires in-house maintenance and updates unless you want to pay for an ongoing support contract. Depending on the software, you may also have to buy another license when the next major version releases.

LMS styles

LMSs fall into different feature sets and categories based on the ways that they deliver learning content. A single software can have multiple types of LMS styles at once.

Traditional LMS

In its most basic form, an LMS uses SCORM, a technology model made up of content blocks readable across LMS programs. The other types of LMS formats often build on the traditional LMS model.

  • Pros: A traditional LMS’s SCORM allows for transferable content across platforms when you want to import or export a course. In a standalone format, this classic type of LMS offers straightforward functionality when you don’t need too many bells and whistles. It features basic course hosting, user management, and learning program rules like certifications, registration, and supervisor approvals.
  • Cons: When an LMS only operates on the traditional model, it can have a clunky and less engaging experience without more modern styles implemented. Today’s standard LMSs look very similar to the first LMS platforms because of their lack of significant upgrades over the years.

Learning experience platform (LXP)

A learning experience platform (LXP) presents LMS content in a personalized and on-demand library.

  • Pros: Your LXP’s admins can edit its content library as needed to fit your learning program’s objectives for skill acquisition and subject areas. The “Netflix-like” interface in an LXP offers personalized learning recommendations to build on a user’s previous knowledge. An on-demand course presentation allows for intuitive content access.
  • Cons: An LXP’s personalization features can feel limited compared to other software due to a lack of third-party data. These platforms create recommendations based on limited information, which can have serious drawbacks.

Talent suite

Talent suites combine LMS and LXP features with a focus on skill analytics, career mobility, and reskilling. They create a professional context for the knowledge shared in the platform.

  • Pros: Talent suites have a uniquely career-focused structure that works well for corporate learning over academic learning. They help users understand how courses will help them further their careers and how to use the skills they learn in a professional setting.
  • Cons: While talent suites build on the functionality offered by an LMS or LXP alone, they use a top-down learning approach that may not suit collaborative workplaces.

Collaborative Learning platform

A Collaborative Learning platform is built on the principle that employees learn best when they’re learning from and with one another. This platform decentralizes the learning process to empower everyone to request and teach courses. All users can request or teach content for faster course creation, content updates, and scalable learning.

  • Pros: So many. Collaborative Learning is a powerful tool for creating more agile, flexible, and equitable companies. The decentralized, democratic nature of Collaborative Learning not only saves companies money in expensive course creation, but also allows them to offer more targeted and timely training programs.
  • Cons: Collaborative Learning works best for companies that take a bottom-up approach to learning and management. It won’t fit in as well in a rigid, top-down management culture.

Discover the right type of LMS for your business

As you choose the type of LMS you want to use for your company, keep your technological resources, budget, and team learning style in mind. By comparing these traits to the available kinds of LMS, you’ll find a solution that enables more effective learning.