A look at the financial report of a US-based, publicly-listed EdTech company, which features some 3,000 customers from 60 countries, reveals interesting facts about the approaches the company takes to charging for LMS services.

There are no simple rules, unique answers, or single ways to look at the numbers, but this only stresses the fact that pretty much any variable involved can be chosen strategically to highlight or downplay facts as it is convenient.

Broadly speaking, decisions about each element seem to be made on a scale, with maximum learning value on one end and maximum return to promotional programs on the other. The unfortunate implication is that the bottom line and the learners’ benefit are competing more often than not. Here are some of the variables involved in the tussle:

  • Courses or TrainingMany Learning Management System (LMS) providers provide absolutely NO courses or any type of training, meaning you have to create your own custom education or purchase training “seats” for each learner.
  • Data Units: The number of serviced users or, more often these days, the number of unique datasets. Large companies often have a minimum number of users to serve or a minimum monthly or annual fee to cover a given number of users.
  • Server and Storage Load: Mainly for cloud-based providers, this method encourages operational efficiency, but if reliability is not guaranteed by contract, it could disincentivize uptime and server maintenance.
  • Uptime: Conversely, charging by reliability would be a surefire way to encourage a high level of service, but as infrastructure becomes quickly more reliable, customers might not immediately enjoy the benefits thanks to long-drawn contracts.

Additional Variables

  • Per-Channel Access: Also focusing on users, but charging depending on the cost of delivery by medium: desktop or mobile. A company looking to encourage the adoption of their touchscreen interface might offer a discount for the app over desktop access or vice-versa. This risks alienating students only because they have a favorite way to access their content through arbitrarily pricey means.
  • API Access: Usually an extra charge, this one adds up whenever a third-party service accesses the system’s functionality or data. It is perhaps where the learning-marketing dilemma is clearest, as users would benefit from increased API usage, but the fee structure could detract from it.
  • Network Nodes: This way, the value of each user grows exponentially as they expand their network. It would be an interesting way to encourage more connections among students, especially for introverts or those with limited social capital.

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