SaaS LMS vs. Hosted LMS – Which is the Best for You? 

Last Updated: 17 mins By: Supriya Shrestha

Do you want to gain detailed knowledge on SaaS LMS vs. Hosted LMS? Willing to find out which of these LMS might be a suitable option?  

If yes, you’re in the right place!  

SaaS LMS and Hosted LMS are the top two choices that come to the forefront for organizations and educational institutions.  

Understanding On-premises vs SaaS LMS is crucial and significant. The right decision will enable you to focus on strategic initiatives and provide a smooth learning experience for users. 

So, let’s get into it!   

Importance of Choosing the Right LMS  

Choosing the right LMS is a decision that entirely makes your business. Do you want to know about it?  

If yes, let’s get started! 

  • Better Learning Experience: Right LMS will provide you with a user-friendly interface, interactive features, and intuitive navigation options. It will help you engage the learners.  
  • Proper Course Management: An effective LMS will enable you to create, manage and deliver courses online using robust management features.  
  • Support: A well-functioned LMS will provide its users with comprehensive training, documentation, and technical support. That too whenever the users want! 
  • Data Privacy and Security: The security and privacy of data is important. Why? It is because it includes learner-sensitive information. Also, the right LMS will keep your data secured.  

These are the top significance of choosing the right LMS for your business or educational institutions.  

What is a SaaS LMS? 

Software as a Service (SaaS) is a cloud-based subscription model to a system or platform. It allows users to be accessed from anywhere in the world. 

Saas LMS - Saas LMS vs. Hosted LMS

Using SaaS LMS, you can manage and administer your needs. All the information about the user is hosted in the cloud so you don’t need to get a server.  

You can simply log in and create your course content. In other words, SaaS LMS is the future of LMSS to create learning platforms. The reason? Individuals seem to be more satisfied with its model. It is easy to use and economical.  

Key Features of SaaS LMS:  

  • SaaS LMS has a very simple and straight setup process.  
  • Vendors entirely look after the maintenance, so you don’t need to worry about downtime and issues. 
  • This application is learner and user-centered.  
  • You can reach out to the dedicated support team throughout your journey.  
  • All the cost for IT professionals, hardware, and hosting service is covered for you.  

Examples of a SaaS LMS  

Let’s get familiar with some of the examples of SaaS LMS in this section of our article SaaS LMS vs. Hosted LMS.  

They are used by the education sector, HR departments, trade associations, independent trainers, and more.

  • Masteriyo – Powerful WordPress LMS and eLearning plugin 
  • Moodle – Best SaaS LMS tools to teach lessons effortlessly 
  • iSpring Suite – eLearning authoring toolkit that does it all  
  • ProProfs LMS – Simple cloud-based LMS 
  • Docebo – AI-powered LMS built for enterprise 

Pros of Using a SaaS LMS 

Below we have noted down some of the pros of using a SaaS LMS: 

1. Quick Set-up 

SaaS LMs are always ready to get started! The reason? This LMS is hosted in the cloud and setup has already been done!  

Users just need to pay a certain fee as per the plan they choose. Then, they can use SaaS LMS instead of hosting them locally. The deployment takes only a couple of minutes then you can sign up and use it.  

You don’t need to do much! Providers will take care of things like system updates, security maintenance, and more.  

Using SaaS LSM, you can grow as you go!  

2. Predictable Costs  

SaaS LMS vs. Hosted LMS – Which LMS has reasonable pricing? The absolute answer is SaaS LMS!  

It follows standard pricing practice, so you won’t have to pay a large amount upfront. The cost is based on user metrics, pay for the plan that you use! 

When you use SaaS LMS, you don’t need to maintain any kind of in-house IT infrastructure or hire a professional. You can simply pay for the plans you choose on a monthly or annual basis.  

This software is based on pricing plans, so the cost is predictable.  

3. Integration with Third Party Applications  

Most of the SaaS LMSs are integrated with third-party systems. In simple words, it communicates with a host of other applications using API. Then, you’ll be facilitated with a combined system.  

Integration with Third Party Application

Using those applications, you don’t have to spend more time managing most of the work. As a result, you will be able to deliver effective content and courses.  

The integration option also enables users to exchange data between SaaS LMS and other applications. It facilitates comprehensive analysis and reporting.  

4. Scalability  

SaaS LMS has amazing scalability.  

It enables users to handle the increasing workload and increasing demand of users with its system growth ability. While updating users won’t face any disruptions or issues.  

Using this LMS you can upload an unlimited number of courses. When your business grows, you can simply switch plans according to your requirements.  

5. Flexibility  

Saas LMs are accessible from devices of any size, anytime, and anywhere. The device includes smartphones, PCs, laptops, and tablets. 

All in all, you need to make sure that you have access to a stable internet connection.  

The system is completely adaptive to all user requirements, configurations, and workflows. Its supportive nature makes it suitable for a wide range of use cases.  

Businesses can use the features, functionalities, and systems as per their own needs.   

Cons of Using a SaaS LMS 

There are a couple of cons to using SaaS LMS. Here we’ve mentioned the most mentioned one in this SaaS LMS vs. Hosted LMS:  

1. Limited Customization  

When you go through SaaS vs. On-premises, you’ll realize that SaaS LMS has comparatively fewer customization options.  

Limited Customization - SaaS LMS

Do you want to know how? Firstly, it doesn’t have an option to customize the code.  

You won’t be able to manage the development process from scratch. As a result, you won’t have the option to mold everything the way you want.  

However, if you’re a beginner, this might be a better option. Why? Coding and developing is not everyone’s cup of tea. It can be confusing and difficult.  

2. Dependency on the Provider  

In SaaS LMS the model is owned and managed by the provider. Users are left with no option but to trust them for better security and performance.  

However, some SaaS LMS providers do consider users’ wants and needs. They look after the feedback and comment sections to know what the customers want!  

The upgrades and updates are made by providers. Meanwhile, users need to wait patiently to get new features, enhancements, and changes.  

What is a Hosted LMS? 

Hosted LMS, also known as self-hosting LMS, is installed and then operated in an in-house server. Unlike SaaS LMS, you can host your own LMS on-premises. 

Hosted LMS - On-premises vs SaaS LMS

Here all the infrastructures that are required to run an LMS are looked after by themselves. Users are entirely responsible for updating and maintaining the software and infrastructure.  

One of the best parts about using Hosting LMS is that you can start right from scratch. This lets you build an LMS the way you want. But if you’re a beginner, Hosted LMS might be a difficult choice for you to get started with! 

Key Features of Hosted LMS:  

  • Hosted LMS is a traditional form of software that was used even before the existence of cloud computing.  
  • It offers secure data storage options for all users.  
  • You need to host your own LMS as a server.  
  • Many users use Hosted LMS as they believe that their extra work will help them save money.  
  • The source code of Hosted LMS is accessible to everyone. 

Examples of Hosted LMS 

If you think Hosted LMS might be a suitable option, let’s go through Some of its top examples.  

They are used by Online course providers, government agencies, corporate training programs, non-profit organizations, and more. 

  • Moodle – Empowering educators to improve the world  
  • LearnDash – The most powerful LMS for WordPress    
  • Opigno – Build your corporate academy  
  • Forma LMS – LMS designed to fit the company’s digital training needs  
  • ATutor – Open-source web-based LMS  

Pros of Using a Hosted LMS 

Below we have noted down some of the pros of using a Hosted LMS: 

1. Cost Effective in Long Run  

If you make a comparison between SaaS LMS vs. Hosted LMS, you will know Hosted LMS is costlier.  

But in the long run, self-hosted LMS will be more profitable. How? You don’t need to pay for different plans on a monthly or yearly basis.  

Hiring a professional developer and getting started will undoubtedly be costlier in the beginning. However, you don’t need to purchase plans as you’ll have something of your own.   

Later you’ll be able to continue with what resources you have! This will help you save a lot of money in the long run.  

2. Extra Layer of Security  

Hosted LMS has complete data control. You can choose how and where you would like to store your data. As you have your own server and infrastructure you can isolate your LMS from the external.  

Add as many layers as you want for security. You can easily limit access to content, data, software, and advanced encryption with ease.  

With Hosted LMS, you can have complete control over software updates and patches. So, you can immediately apply security updates right when you discover any kind of vulnerabilities.  

3. Scalability  

The scalability of a Hosted LMS especially depends on three main factors, they are:  

  • Management of the available resources 
  • The architecture of the software 
  • Hardware infrastructure 
Scalability - SaaS vs On-premises LMS

Hosted LMS enables you to implement ideas and solutions as per your requirements. You can also perfectly fit your website’s architecture using this LMS.  

You can plan and scale infrastructures the way you want! 

However, in terms of limits, Hosted LMS scales as much as the infrastructure allows. It simply provides more scalability over SaaS LMS.  

4. Flexibility 

While developing an LMS website, you can determine which devices you want to display it. Then you can carry out further processes accordingly.  

You can make your platform available on all devices like mobile, tablet, and desktop. 

Hosted LMS is the most flexible when it comes to customization options. Users can modify the user interface and enhance features to meet brands or specific requirements.  

You can choose a hosting provider, network configuration, and server specifications that align in the best way.  

5. Complete Control  

No matter how many On-premises vs SaaS LMS comparisons you go through, you’ll find that On-premises provides the best control.  

You can decide for yourself which software to use, and how to run, maintain and update it. As your in-house IT professional builds everything right from scratch you’ll have complete control over everything. 

All in all, you can determine functions, maintenance, downtime, and more. You can have control over anything and everything, the way you want!  

Cons of Using a Hosted LMS 

There are a couple of cons of using a Hosted LMS. Here, we’ve presented the top two disadvantages:  

1. Lengthy Set-up Time 

Building everything right from scratch might sound good. But in reality, it takes a lot of time to set up a hosted LMS. The reason? You need to consider and build everything on your own.  

The entire installation process is lengthy. If you don’t find a developer immediately it might take a couple of weeks to get started with! Eventually, it can impact your educational and training operation time.  

If you’re thinking of starting within a couple of days, it’s almost impossible with a Hosted LMS.  

Also, this issue doesn’t only exist while setting up! Later if you find an issue in anything it might be a hassle to find it out. Getting started with a Hosted LMS might be difficult for beginners.  

2. Dependent on Developers  

While using a Hosted LMS, you need to be dependent on your developers. Without the in-house resources of developers, you won’t be able to work independently.  

The main issue arises when a developer leaves and the next one joins your company. They might face several issues while updating and maintaining your hosted platform.  

If you’re an individual who likes to work independently hosted LMS it is not the right choice for you!  

SaaS LMS VS. Hosted LMS: Comparative Analysis  

In this section of the article, we’ll get through a comparative analysis of SaaS LMS vs. Hosted LMS.  

1. Pricing Model and Overall Cost 

SaaS LMS vs. Hosted LMS: Which LMS is more economical?  

The answer is in the short run SaaS LMS is less expensive. However, in the long run, Hosted LMS is more economical.  

SaaS LMS follows a subscription-based pricing model and in Hosted LMS you need to pay money to get a license.  

In SaaS LMS, the price depends on the plan you take and its features. In Hosted LMS, pricing depends on customization and other functionalities.  

Hence, in terms of overall cost SaaS LMS has a lower upfront cost. It is predictable too.  

2. User Experience  

SaaS LMS provides an intuitive and user-friendly interface. The navigation option is quite easy too. Its UX design is primarily focused to provide a complete and professional environment for learners and administrators.  

User Experience - SaaS vs. Hosted LMS

The user-friendliness of Hosted LMS totally depends on the customization options of the software used in it.  

Some Hosted LMS might provide a good interface whereas some might not! There will be a lot of management and technical knowledge requirements.  

If you’re a beginner or don’t have much technical knowledge SAAS LMS can be a suitable option. But if you have technical knowledge and want more customization flexibility hosted LMS is the one for you.  

3. Technical Support  

SaaS LMS provides technical support to all the users who use their subscription package for different plans. Users can reach out to the support team through email, phone, live chat, and more.  

You can easily ask questions or reach out for assistance as and when you need it.  

Whereas in Hosted LMS, the support is provided by the hosting provider based on the arrangements.  

Sometimes users might have to rely on their own IT professionals or third-party hosting provider for technical support.  

Hence, SaaS LMS is known to provide better technical support!  

4. Speed of Deployment  

On-premises vs. SaaS LMS: Which LMS is better based on the speed of deployment?  

The absolute answer is SaaS LMS.  

Speed of Deployment

SaaS LMS platforms provide faster and better deployment time due to:  

  • Proper streamlined setup  
  • Less need for technical knowledge 
  • User-friendly interface  

A Hosted LMS needs more setup time, and technical knowledge even for a minor change. Due to that reason, its speed of deployment is comparatively high.  

If you’re an individual who gives topmost priority to time, SaaS LMS is the one for you! 

On-Premise Vs SaaS LMS – Which LMS Can be the Suitable Option?  

In this SaaS LMS vs. Hosted LMS, we have known that both LMS have their own pros and cons.  

However, those individuals who want to start from scratch might prefer Hosted LMS. Users need their own IT professional and a little bit of technical knowledge to get started! 

SaaS LMS is very reliable and easy. Even if you’re a beginner you can just get started. Instead of focusing on developing and coding, you can focus on the course or content you provide.  

Even if we go through other SaaS LMS vs. Hosted LMS articles, most of the writers suggest SaaS LMs be the better option.  

You might wonder why? Let’s get to know why SaaS LMS is a better option in the below-mentioned points: 

  • SaaS LMS prevents unnecessary delays in developing and running different online courses.  
  • Operate and manage your eLearning platform on your own without hiring IT professionals or developers. You can just work independently. 
  • Its APIs make it convenient to communicate and operate properly with third-party software.  
  • SaaS LMS is an economic choice as your LMS will be maintained by the service provider.  
  • You simply don’t need to learn software and begin installing it. Just sign up and start uploading your eLearning content with ease.  

Frequently Asked Questions  

1. What kind of users prefer Saas LMS? 

Users who are beginners or ones who don’t want to start from scratch prefer SaaS LMS.  

2. Who prefers Hosted LMS?

Those users who are willing to build a website from scratch using their own ideas prefer Hosted LMS. The individuals also need to hire developers and IT professionals.

3. What factors should I consider while choosing between SaaS LMs vs. Hosted LMS?  

Some of the key factors to consider while making decisions are features and functionalities, scalability, support, customization, data security, and more.  

4. Can a SaaS LMS handle a large-scale learning program with numerous users?

Yes, a SaaS LMS is designed to handle large-scale learning programs with numerous users. Its scalability makes it possible to do so!  


Now that you have a clear idea of SaaS LMS vs. Hosted LMS, we suggest you opt for a solution that will be suitable for you!  

Both LMSs have their own pros and cons. You can make your decision based on what works for you and your business partners.  

However, if you want our suggestion, we suggest you go with SaaS LMS. The reason? It is really easy to get started with, no matter if you’re a professional or a beginner.  

Currently, we are using Masteriyo WordPress LMS and an eLearning plugin – a Saas LMS. We must say, we are impressed with its ability to create courses by remaining in just one place. It also provides its users with plenty of add-ons. The functionality is just as smooth as butter!  

Are you new to the WordPress world and need a guide to start an online course business? No worries, we’ve got your back with a comprehensive guide.  

No matter which LMS you choose, try to make sure that it suits your budget and serves its purpose.  

All in all, if you look around everything is in the cloud! Your LMS should be too!   

SaaS LMS vs. Hosted LMS – Which is the Best for You? 

Supriya Shrestha

Supriya is a curious thinker who enjoys sharing her knowledge through written pieces. She loves spending her time in front of her laptop, working on new projects and learning new things. In her spare time, you can find her traveling around the city in search of the best food and coffee!

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