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Hosted LMS vs. SaaS LMS: Which One Is Best for You

Hosted LMS vs. SaaS LMS Which One Is Best for You

Do you ever wonder what a hosted LMS and a SaaS LMS are and how they compare against each other? More importantly, which one is more popular and why?

These are some of the questions we answer in this blog post. They will help you, especially if you’re out in the market looking for a learning management system for the first time.

Talking of LMS, the global LMS market is expected to grow to $38.10 billion by 2027 from $8.76 billion in 2019.

In places like North America and Europe, the rate of LMS adoption is growing rapidly as there’s a realization of the importance of enhancing the overall online learning experience.

For the purpose of this post, let’s focus on hosted LMS and SaaS LMS.

What is a SaaS LMS?

ProProfs LMS

A SaaS LMS is a type of LMS based on the model of software as a service. Generally, the term is used synonymously to understand cloud-based LMS solutions. They are hosted on the internet and available on-demand. In other words, you get these LMS systems as a service from a remote server of a software provider that hosts these platforms.

Since a SaaS LMS is made available over the web, there’s no need to install hardware or software locally in an in-house server or computer. You just need to create a user account and sign in to the LMS to start using it. Users pay their subscriptions to these tools and associated services monthly or annually.

Examples of SaaS LMS

If you’re interested in SaaS LMS, here are some of the top SaaS learning management systems worth knowing. They are widely used by training centers, enterprises, teachers, tutors, and educational institutions.

Why Use SaaS LMS?

There are many sound reasons to go for a SaaS LMS regardless of your industry and learning needs. Some of the eye-catching ones are as follows:

  • Faster Implementation

One of the best parts of a SaaS LMS is that it enables faster software deployment. The cloud infrastructure is already there, fully set up and ready to use. All you need to do is log into the LMS. This way, you can ensure that your online training is there in front of your audience in minutes.

  • Ease of Updates

You don’t need to worry about frequent software updates and upgrades with a SaaS LMS. The provider takes care of all of that through an automatic process. You don’t have to remember pending updates, bug fixes, regular maintenance, and upgrades to a higher version of the software.

  • Cost-Saving

You incur a lesser total cost of ownership when you deploy a SaaS LMS. There’s no need to maintain an in-house IT infrastructure and hire a team of professionals to manage it. Since these software solutions are based on a pricing plan, you know how much you need to pay each month or year. The cost becomes predictable.

  • Scalability

There is no limit on the number of learners or the number of courses you can upload to a SaaS LMS. These LMS expand as your business grows and the ensuing need for more training. So, there’s no concern about class size or the amount of training materials you can use.

  • Flexibility

A SaaS LMS is accessible from any electronic device, including smartphones, PCs, laptops, and tablets, anytime, anywhere. All you need is a stable internet connection. It doesn’t matter whether your learners are local or remote. This offers unmatched convenience to both instructors and learners.

Cloud Computing

  • Easy Software Integrations

Another reason to consider using SaaS LMS tools is that most of them support seamless integrations with several useful applications, such as CRMs, email marketing tools, and communication tools. They communicate with a host of other systems using APIs and present a combined system to enhance the power of the individual tools.

Easy Software Integrations

What is a Hosted LMS?

A hosted LMS, or more aptly a self-hosting LMS, is installed and run on an in-house server. Here, you host your own LMS on-premise instead of taking the service of a remote cloud server. Usually, companies that rely on this type of LMS have the workforce to manage it internally.

It is a more traditional form of a software use case that companies have been using well before the arrival of cloud computing. They would install software on their desktops and conduct training sessions from it.

Users only need to purchase the software from a vendor. After that, it becomes their responsibility to run, manage, troubleshoot, and upgrade the software.

Examples of Hosted LMS

If you think LMS hosting is for you, you may want to look at these top examples of hosted LMS. They can make it easier for you to choose the best ones out there.

Why Use Hosted LMS?

Like a SaaS LMS, a hosted LMS has a few significant advantages. If you plan to go for this type of LMS, you’ll find these favorable attributes convincing enough for you to take the plunge.

  • Complete Control

With a self-hosted learning management system, you can finally keep all your software-related matters to yourself. That’s because these LMS are locally hosted, and you get to decide how you run them, how you maintain them, and so on.

In short, you’ve complete control over them as your in-house IT staff is in charge of everything. You are not at the mercy of some third party.

  • Greater Customization


Equally significant is the extent to which you can customize the software at your end. Since you’re managing it from scratch, you get greater freedom to mold it precisely the way you want.

SaaS LMS systems also offer customization, but it’s limited. You can personalize and customize a hosted LMS initially, be it the user dashboard, content, or branding exercises, and offer consistent online training.

  • Cost-Effective

A locally installed LMS may entail a bit higher upfront cost, but that’s it about such LMS. The continuing expenses of a self-hosted LMS are comparatively lower than that of a SaaS LMS.

A hosted LMS requires just a one-time licensing fee and once installed, you don’t have to shell out anything other than some costs for add-ons and maintenance.

  • Extra Layer of Security

No doubt, all LMS tools come with some level of security. But the self-hosting versions enable you to go the extra mile. You can add as many layers of security as you think necessary, such as content and data security, limiting access to certain parts of the software, and advanced encryption.

Why is SaaS LMS a Better Solution?

Initially, the question of SaaS vs. hosted LMS may seem like an endless puzzle. But after weighing all the pros of both categories of LMS, we’ve arrived at the verdict that SaaS LMS have the upper hand.

Here’s why:

  • Better speed

SaaS LMS tools ensure faster deployment and a high degree of accessibility, saving companies’ time and offering a delightful eLearning experience.

  • Ease of use

Most cloud LMS systems are easy to use as they are designed for users who need to get them up and running in record time.

Generally, the vendor hosting the SaaS would do the heavy lifting in terms of complicated setup and maintenance, clearing the way for you just to log in and run the systems right away.

  • Useful mix of features

These saas e-learning tools support must-have features such as mobile learning, social learning, gamification, and blended learning. They, thus, offer a comprehensive learning ecosystem.

  • Better reporting functionality

Similarly, they come with built-in LMS reporting and analytics features that make tracking, monitoring, and data-driven decision-making easy.

Watch: How to Analyze Training Course Results

  • Security

Users’ data is stored securely in the cloud, and they don’t need to create any backup for it.

  • Cost savings

SaaS LMS solutions can significantly save your software costs since an external service provider hosts and maintains them on your behalf.

Generally, the base price is minimal, and there are no charges for installation, troubleshooting, and fixes. You just pay a predetermined monthly or annual subscription.

  • Adaptable

SaaS LMS can future-proof your business. They are designed keeping the need for flexibility, scalability, and seamless integrations in mind. They enable businesses to adapt and grow in a highly competitive online learning environment and maximize revenue generation in the process.

Choose Your LMS Wisely

Choosing the best LMS based on the hosting type is purely a question of one’s choice. Both have their advantages. The decision should be subjective and based on what you think works for you and your stakeholders.

The above observation on why SaaS LMS are a better option is based on the general opinions in the industry and our objective analysis.

Carefully study the upsides and downsides of Hosting vs. SaaS and take a prudent decision. Whichever LMS type you finally choose, it should suit your budget and serve your purpose. More importantly, it should make you happy.

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About the author

Kamy Anderson is an online training expert and a product manager. He leads the product vision and strategy of ProProfs Training Maker. Kamy blogs about trends in eLearning, online training, employee training, gamification, LMS, AI, and more. His articles are published in eLearningIndustry, TrainingMag, Training Zone, and Learning Solutions Magazine. You can connect with Kamy on LinkedIn.