On-Premise vs Cloud LMS: 10 Factors to Consider to Future-proof Your Organization

On-Premise vs Cloud LMS: 10 Factors to Consider to Future-proof Your Organization


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Powerful learning management systems (LMS) have become a key factor in driving learning and training outcomes at work. However, every business is unique — meaning you need an LMS that’s well-suited for your particular needs. As businesses recognize the true impact of their LMS, it's critical to identify whether on-premise LMS software or a cloud LMS will be the most beneficial to the company’s long-term well-being and success. This includes considering the influence on your employees, partners, customers and other key parties — so you can more efficiently elevate the learning experience and foster more lucrative outcomes.

For organizations pursuing a robust and comprehensive LMS, we’re taking a closer look at the main differences between an on-premise and cloud-based LMS to help you find the right solution to future-proof your business.

Defining an on-premise LMS and cloud-based LMS

An on-premise LMS is essentially a system that your organization can purchase, which includes the entire code and features for you to implement and work with on your own servers.

A cloud-based LMS, on the other hand, is hosted in an external cloud via the internet. Implementation and setup come directly from a private cloud, allowing for greater accessibility for your employees.

On-premise vs cloud LMS: 10 factors for forward-looking organizations to consider

While both an on-premise and cloud solution can ultimately be powerful systems for improving your learning and training initiatives in the workplace, there are distinct differences between the two options that are critical to note as you consider your organization’s long-term needs. Differentiating factors to help you identify the most suitable LMS solution include:

1. Customization options

Whether you’re a small business or a large organization the customization and flexibility of your LMS matters. An on-premise LMS hosts information in your own data center, which gives you greater control over customization, whereas a cloud-based LMS uses one basic code that offers less flexibility. For teams in pursuit of an LMS that can be heavily customized, with special developments and integrations, an on-premise solution is generally a more suitable choice.

2. Security differences

In today’s digital world, 68% of business leaders feel their cybersecurity risks are increasing.1 As a result, security is always top of mind for organizations, and, luckily, both types of LMS options provide some level of data and access security to mitigate the risk of cyber attacks or fraud. With an on-premise LMS, you have full control over who and how individuals can access the system. While a cloud LMS puts data security in the hands of your LMS provider, they prioritize this factor — likely providing your teams with flexibility in how exactly your information is safeguarded.

3. Cost models

While your learning and training systems in the workplace are always an investment, the type of LMS you choose will have a considerable effect on your anticipated LMS costs. By leveraging an on-premise option, your organization can expect a one-time, up-front fee to purchase the license for the LMS, a service fee for installing and activating the system and a smaller annual fee for maintenance and support. With a cloud-based LMS, you’re essentially renting the solution — paying a predictable monthly or annual service fee. Considering the average company in the U.S. spent $1,071 per employee this year on training costs, it’s essential to understand where these costs are being allocated and ensure resources are being used wisely.2

4. Accessibility

One of the most significant advantages of a cloud-based LMS is the greater accessibility that it offers. A cloud LMS is more portable, meaning your valuable team members can access this information — anywhere, anytime. An on-premise solution is typically less accessible but may be useful for companies with complex content or higher security specifications.

5. Artificial intelligence (AI) hosting

When it comes to cloud-based AI applications, organizations don’t need to build out a massive data center to gain access to compute, they can use a pre-existing infrastructure that a different party maintains. By reducing barriers to entry, cloud LMS solutions are suitable options for organizations that are getting a lay of the AI land and experimenting with these initiatives. At the same time, AI for an on-premise learning management system can be more economical because the tools built for an on-premise infrastructure can work with mass amounts of compute power (acting as a capital expense rather than an operational expense model).

6. Performance

Traditionally, an on-premise LMS was considered a higher-performing option, reducing the risk of temporary access or performance disruptions by hosting the software in-house. However, the growth of digital solutions has led to cloud-based solutions becoming more scalable and dependable than ever. Today, a cloud-based LMS will generally be reliable and available when needed, with the ability to work around delays with little impact.

7. Disaster recovery

With the looming threat of outages, failures and cyberattacks, unplanned downtime can have a significant impact on your business and its bottom line. When the worst-case scenario comes around and your data is at risk, which LMS hosting option can mitigate the fallout? Taking your disaster recovery into account, your organization might lean on a cloud LMS solution to mitigate downtime, lower costs and enable compliance, as the cloud provider should do a majority of the hard work for you. With an on-premise option, your business can minimize the chance of data loss, reduce latency and predict ongoing costs more accurately.

8. Deployment

When determining the LMS best suited for your team members, it’s critical to consider how long it will take for the system to be available to learners. If you’re ready to start operating immediately, it will be best to acquire a cloud LMS because there’s no software or hardware involved. As a result, cloud LMS solutions are generally available for implementation and use as soon as you need them, whereas an on-premise option is linked to longer deployment timelines.

9. Maintenance and support

It’s also essential to consider the amount of support you’ll need when leveraging an LMS solution. Taking advantage of an on-premise option requires you to manage platform support and attend to any issues that arise. On the other hand, a cloud-based LMS typically provides in-depth technical assistance from your LMS provider.

10. User experience

At the end of the day, the user experience your learning management system offers to valuable team members is critical to see successful outcomes. However, these solutions are often praised by users for different aspects. Because an on-premise LMS is associated with higher performance, users might prefer this experience for comprehensive and improved just-in-time training and micro-learning opportunities. As an alternative, organizations can leverage a cloud-based LMS to offer a better user experience for employees in terms of support, accessibility and deployment.

Choosing the best option for your organization

With a number of differences to consider between an on-premise LMS and a cloud LMS, it can be overwhelming to determine which is best for future-proofing your organization. However, as your business looks ahead to enduring LMS needs, these distinctions essentially boil down to convenience versus control.

A cloud-based LMS may be best suited for organizations with:

  • Smaller IT staff and the need for greater technical support.
  • Moderate data protection needs.
  • Faster deployment requirements.
  • Minimal-to-moderate customization needs.
  • The desire for predictable monthly or annual costs.

An on-premise solution will be a better fit for teams that:

  • Leverage a larger IT staff, with the ability to implement and manage their system in-house.
  • Require heavy customization.
  • Necessitates higher data security standards.
  • Place emphasis on LMS performance.
  • Wants to avoid perpetual subscription costs, in favor of a larger up-front fee.

How Absorb LMS can help drive online learning efficiency

If your organization is ready to bring your learning and training programs to the next level with a powerful LMS solution, Absorb can help. Absorb LMS uses cloud-based technology to future-proof your learning management needs: Propelling learning forward and encouraging seamless collaboration without the hassle of downloading and installing complicated software.

Our cloud-based solution is designed to meet your organization's unique needs with solutions that ultimately enable increased flexibility, improved ROI and increased scalability. For more information about Absorb LMS, reach out to our experts or request a demo today.

1. https://www.accenture.com/_acnmedia/pdf-81/accenture-health-cost-of-cyber-crime-study.pdf
2. https://trainingmag.com/2021-training-industry-report/

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