Technology and Product

Top advantages of SaaS LMS vs hosted LMS solutions

Posted on: December 21, 2021Updated on: January 18, 2024By: Axonify Team

A learning management system (LMS) can transform your employee onboarding and frontline training programs, but should you go with a hosted or SaaS LMS option? This is one of the first deciding factors when comparing LMS platforms, as it will influence everything from the cost to the user experience and even the level of ongoing maintenance required.

If you want a learning platform that’s scalable, affordable, flexible, and user-friendly, the answer is simple: SaaS has the advantage across the board.

What is a SaaS LMS?

A SaaS LMS—also known as an on-demand LMS or cloud LMS—is a learning management system that’s hosted in the cloud. SaaS stands for “software as a service,” a business model whereby the software is offered on a subscription basis and hosted in a central location that’s accessible from any device.

A SaaS LMS is accessible to anyone with an internet connection. Some may use an internet browser like Chrome or Edge while others have native apps on iOS and Android.

The cloud model has become the dominant delivery system for most digital media in recent years. Consider music as an example. In the past, if you wanted to listen to music on demand, you needed a physical medium such as a CD, record or cassette tape. And when music started going digital, you needed to either copy the media to a computer (e.g. burning a CD) or download it from a place like iTunes. But now there are hundreds of millions of songs hosted online and accessible via platforms like Spotify, Apple Music and YouTube. You don’t even have to download the songs. Just click and enjoy.

A SaaS LMS brings the same convenient, streamlined experience to the world of digital learning.

digital screen demonstrating advantages of SaaS LMS vs hosted LMS

What is a hosted LMS?

In the early days of online training, all learning management systems were hosted on-premises. This means the entire digital experience, including software and content, was installed on a company’s local computer network. Desktop computers then accessed the LMS via the company network. However, this did not require access to the outside internet.

Think of a hosted LMS like an old version of Microsoft Office. To use programs like Word or Excel on your computer, you had to use discs or CDs to install the programs. Now, with Office 365, you can access your Word and Excel files on any device using a browser.

The infrastructure required to move large amounts of digital content between devices simply didn’t exist in the ‘90s and early 2000s. So everything was handled within the company’s walls. Today, hosted solutions are less popular because they don’t offer the same capabilities as SaaS solutions.

Why a SaaS LMS is superior

The main difference between a SaaS LMS and hosted LMS is that SaaS solutions are web-based and accessible to everyone on your team with no downloads or configurations required.

A SaaS LMS offers several benefits over the hosted alternatives, including:

  • A more powerful, streamlined experience for your frontline workforce
  • Easy deployment
  • Easy customization
  • Infinite scalability
  • The preservation of valuable server space
  • Affordability
  • Access on any device
  • Integration with third-party applications

A more powerful, streamlined experience

Cloud-based systems offer a convenient, streamlined experience for both users and administrators. Just log in and go. The infrastructure is already there, very little setup is required, and the system isn’t limited by a company’s operating systems or available network resources.

All learning materials are stored in one central location, and all updates are instantaneously available to all users—no installations or updates required. It’s as easy and flexible as using a social media platform.

SaaS LMSs are notable for their low learning curve. Whether the user registers on their own or is registered by the administrator, they’re able to get up and running almost immediately. In addition, the layout and user experience are comparable to cloud-based systems that the user is already familiar with (including social media platforms, online word processors and streaming services). System updates are pushed automatically to the user in real time, and progress reports are automatically pushed to the administrator.

Easy deployment

By some estimates, it can take 6 to 12 months to deploy a hosted, on-premise LMS, and you’ll usually need the help of reliable IT resources to ensure a smooth deployment. There are complex back-end configurations to execute, and everything has to be manually implemented and tested. New configurations must be carried out every time you want to update your system, and those updates must be installed to every device where the software is stored.

With a SaaS LMS, deployment can be completed in a matter of weeks (or even days), not months. All you have to do is author the training materials and import them into your system (and there are even tools that can assist with the authoring process). No buildout is required. And whenever you want to update your training courses, it’s as simple as logging into your admin panel and adding/editing modules. All updates are instantly accessible on any device.

Easy customization

With a cloud-based LMS, there’s generally no development work required. This means that your learning and development (L&D) and HR professionals can manage the system with streamlined precision while also training other team members (like team leads) to create and edit their own modules.

The administrator manages all user permissions and can grant access to any user who wants to author or share their own training materials and quizzes. And because a cloud-based LMS can be customized with a wide range of third-party integrations and authoring tools, it’s possible to add infographics, videos, podcast streams and other interactive materials.

It’s important to note that, while hosted LMSs are more customizable overall (since you have the freedom to build them from the ground up and incorporate your own visual and functional flourishes), SaaS LMSs are more customization-friendly since anyone can modify them with no technical expertise. And newer cloud LMSs offer so many point-and-click customization options that it’s easy to match the system to your branding and workflow preferences. And if you do have developers on hand to fine-tune the system, custom CSS options are often available.

Infinite scalability

Scalability is essential for any LMS, and cloud technologies make it easy. The system has already been built out on your behalf and is hosted on servers capable of accommodating however many employees you take on. You can continually expand your library of learning resources and improve upon the resources you already have.

And because the system is developed, secured and updated by a third-party provider, you don’t have to worry about the infrastructure becoming obsolete. Hosted learning systems often become outdated, incompatible with newer operating systems or dependent on obsolete technologies. And even if it technically still gets the job done, you often have to exhaust significant resources bringing it up to date every year or two. With a SaaS system, you don’t have to worry about any of that.

The preservation of valuable server space

Because cloud LMS tools are hosted by the LMS provider, you never have to sacrifice space on your own internal servers or hard drives. You can preserve more space for important data and resources, and your team members can even access the LMS on devices with limited storage space (like Chromebooks, for instance).

The cloud-hosted advantage becomes especially apparent when you start adding a lot of data-intensive media. For instance, if you want to incorporate a massive library of high-definition training videos into your modules, it’s no problem with a SaaS LMS. With a hosted LMS, these types of enhanced training materials would be extremely resource-intensive (though there are ways around this, such as by linking to externally hosted video platforms).


There’s a common misconception that hosted LMS tools are more affordable than their cloud-based alternatives. But when you weigh the true cost, SaaS systems are generally much more cost-effective.

It’s true that LMS SaaS tools generally require a monthly or annual subscription fee while hosted solutions are available at a one-time cost. However, you have to look at the long-term maintenance costs. With a SaaS solution, you’re not just getting an LMS. You’re getting the infrastructure, the hosting, the security, the updates, the bug fixes, the customer support and the ability to create and implement new training materials on the fly.

So while a hosted solution might cost less out of the box, its lifetime cost of ownership is generally much higher. You have to build the infrastructure, manage the learning materials and keep the system updated. For a robust system, this can require part-time or sometimes even full-time IT resources year-round. That’s why a SaaS system is generally more affordable in the long run: It’s like having an entire IT team working around the clock at a fraction of the price.

Access on any device

several staff accessing saas LMS via various mobile devices

Mobile learning access is imperative for a modern LMS. According to data from the Pew Research Center, 85% of Americans own a smartphone, and the average consumer is engaging with mobile content more frequently than desktop content. Because SaaS LMSs are cloud-hosted, the technology is often accessible on any type of web-enabled device—computers, smartphones, tablets and even point of sale systems.

By offering this type of freedom to your learners, you can promote greater engagement with the content and also greater retention. Administrators can even review participants’ progress and update the system while on the go.

It’s important to note that not all SaaS LMSs are designed with mobile in mind, so you do have to do your homework before choosing a platform. To ensure the maximum accessibility, go with a mobile-first platform like Axonify.

Integration with third-party applications

One often-overlooked benefit of a SaaS LMS is its ability to integrate seamlessly with other cloud-based systems, including CRM software and HRIS platforms. Often the integration can be completed with a simple API, no developers required. For example, Axonify integrates with many HCM, LMS and WFM tools, and many of these product integrations are already built in for seamless customization.

By allowing data to flow seamlessly between your LMS and other business software, you can benefit from enhanced tracking and reporting while also automating important tasks (such as tracking each person’s career development goals and following up with team members who forget to retake failed quizzes).

How to choose between SaaS learning management systems

If you’re trying to choose between SaaS LMS vs hosted LMS providers, the answer is simple. SaaS is infinitely more flexible, powerful, scalable, affordable and convenient in the long run. However, you can’t just opt for any SaaS LMS. When comparing platforms, make sure to choose a system that:

  • Offers a proven track record of success. You’re going to invest time into building your training content library. Make sure to go with a service that has stood the test of time and that offers documented results.
  • Is mobile-friendly. Mobile compatibility isn’t just nice to have. It’s absolutely essential in an LMS.
  • Provides an engaging experience. A great LMS removes barriers to learning by making it easy and fun with tactics like gamification.
  • Is robust enough to support the size of your business. Some LMS software is designed for small businesses. Other LMS solutions are designed to support large enterprises. Make sure to go with a solution that can cater to your needs.
  • Offers excellent data and analytics. Administrators should have access to the data needed to inform your training strategy, including course completions, assessment scores, knowledge growth, performance gaps and more.

The right learning management system can equip every employee with a firm foundation for success. Make sure to choose a trusted, leading-edge SaaS LMS solution like Axonify, and experience the difference for yourself.

Axonify Team

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