LMS licensing: which users are you actually paying for?
When comparing learning management systems, the price per user appears to be a straightforward figure. One platform charges a set monthly fee, another offers an annual package, and a third promises unlimited accounts. However, the term ‘user’ can mean different things. And it is precisely how ‘user’ is defined that often determines what the actual operating bill will look like.
Before you start crunching the figures, it is worth defining who will be accessing the LMS and how often. Otherwise, you may easily find yourself comparing two figures that relate to completely different scopes of service.
A registered account may incur a cost even when it is not in use
A model based on registered users is usually calculated according to the number of registered or authorised accounts. However, the exact threshold is determined by the contract: in some cases, all accounts are counted; in others, only activated ones. It is also important to consider whether administrators, tutors, test profiles or employees who no longer work for the company are included in the limit.
This approach can be quite predictable if you have a stable team and most people use the system regularly. With a large customer database where users complete a single course once a year, the situation may be different. You should therefore also enquire about archiving: what happens to the price, access and results history when you deactivate an account?
An ‘active user’ requires a precise definition
In an activity-based model, the key factor is which event counts towards the account’s activity. This could be logging in, starting a course or some other action. The difference between these scenarios becomes apparent, for example, with a manager who merely opens a report, or a person who logs in but does not start any course.
Suppliers may use different billing periods. A monthly active user and an annual active user represent different cost models. There are also options on the market that charge based on unique logged-in users per month; the specific rules must always be checked in the relevant pricing plan. The term ‘active licence’ alone is therefore insufficient for comparing offers.
Seasonality affects the calculation result
Let’s imagine a model company with 1,200 employees. In a typical month, 150 people are using the system, but during the annual compulsory training, almost everyone logs in over the course of a few weeks. If you compare offers based solely on a typical month, the main cost peak will be excluded from the calculation.
Find out whether capacity can be temporarily increased, whether the change applies only to the period in question, and when you can reduce it again. In some cases, exceeding the limit will result in an additional charge; in others, it may trigger a switch to a higher tariff or restricted access. The example given is deliberately hypothetical; what matters is the method of comparison, not the specific number of employees.
Concurrent users raise a different issue
A licence based on concurrent usage limits the number of people who can use the system at the same time. Whilst this may be suitable for some operations, the number of available seats must be based on actual peak usage. It is not enough to know that you have several thousand accounts, as only a small proportion of them are typically active.
Ask for an explanation of when a concurrent session is released, how long an inactive session remains counted, and what the next person to log in will see. Furthermore, the licence limit is not proof of the infrastructure’s performance. A platform may commercially permit a certain number of concurrent users, but its response times must be demonstrated separately.
A licence may have several tiers
The base price may not include all the components you require. Additional organisations, mobile apps, content libraries, storage or advanced integrations may be charged for separately. In the case of a shared portal for multiple clients, it is important to distinguish between the price of accounts and the price of individual, separate environments.
Also check whether every user actually needs the paid module. If three administrators use advanced reports, a per-administrator licensing model may have a different impact than a mandatory surcharge for the entire organisation. The aim is to obtain the full scope of the offer, not just the lowest initial price.
What to have included in the quotation
Send the same scenario examples to all suppliers. In addition to normal operations, include peak periods, organisational growth and any work involving external users. Ask for clear answers:
- Which accounts and events are included in the licence calculation?
- What is the billing period and how are limit exceedances handled?
- Which modules and operational items are included in the price?
- When can the number of licences be reduced, and what happens to archived results?
Please also request a sample usage report. If you are unable to check the price retrospectively on the account and activity statement, it will be more difficult for you to plan your budget and resolve any billing disputes.
Compare models that suit your operations
There is no single licensing approach that suits everyone. For ongoing in-house training, predictability may be key; for seasonal training, flexibility; and for a customer academy, the ability to cater for irregular attendees. A good offer must clearly describe how it charges for these situations.
When making your selection, use the LMS Catalogue for an initial comparison of systems. You should then have the licensing terms confirmed directly by the supplier based on your specific figures and scenarios. This is precisely what turns an indicative price list into a basis for decision-making.
