Choosing Between Open-source VS Commercial LMS

Trying to decide between an open-source or commercial LMS? You’re not alone! 

And the good news is, there is a right fit for you. Whether you’re a solo creator launching your first course, a small team with big training goals, or just someone who loves to tinker with tech, this guide breaks it all down to help you make the right decision.

Looking for something specific? Jump to it here! 

• What is an open-source LMS?
• What is a commercial LMS?
• Quick differences between an open-source vs. commercial LMS
• Factors that affect your experience with LMS
• Deeper dive into LMS licensing and total costs
• Best type of LMS for each creator type
• 12 questions to ask to help you decide
• Conclusion

What is an open-source LMS?

An open-source LMS (learning management system) is like a build-it-yourself online course platform. You leverage code that someone else has created to build your entirely unique, self-hosted LMS. 

Some examples include Moodle, Canvas, Chamilo, Open EdX, and LearnPress. 

Pros:

• You can fully customize everything from features to layout to branding
• The software is usually free to download and use
• You truly own the platform and can edit the source code how you want

Cons:

• You (or a developer) will need to handle the setup and maintenance
• Forced to rely on community forums or hire outside help if something breaks
• There are a lot of hidden costs that can still add up

How do you get started with an open-source LMS? 

You need to download the software (usually for free or for a small donation to the original developers), install it on your own website or server, and make it your own from there.

What is a commercial LMS?

A commercial LMS (learning management system) is like a ready-to-use online course platform. You pay to access a system that is already built and maintained by another company. This allows you to focus on creating and selling your content without dealing with the technical setup.

Some examples include Thinkific, Teachable, Kajabi, TalentLMS, and LearnWorlds. 

Pros:

• Easy for beginners and people with no coding abilities
• Most platforms offer templates, drag-and-drop tools, and onboarding support
• Security patches and new features roll out automatically for you

Cons:

• Costs can grow as your learner audience grows
• You are limited in customization to the features and templates the vendor provides
• You don’t “own” the source code that your content leverages

How do you get started with a commercial LMS? 

Find a solution provider that has the right features that you need, set up your courses using their drag-and-drop tools, and then start inviting learners to participate. 

Quick differences between an open-source vs. commercial LMS

Feature	Open-source	Commercial
Cost	Usually free to download and use. It may have a one-time cost or request for donation so that the source code developers can get paid for their time.	Charges based on subscription or license fees, typically monthly or annually. Platforms may also charge by the number of users, by special feature add-on, or take a royalty off each transaction.
Hosting and maintenance	You “own” your platform, so you are fully in charge of hosting and maintenance. The original developers may release new code updates from time-to-time that you can build off.	The platform vendor owns the solution and is in charge of all software and security updates. This includes waiting until they release new features to access them.
Customization	The utmost flexibility! You can modify code, design your own branding and layouts, or tailor it to work with specific integrations.	Limited customization. You work within their feature set and branding limits. Some platforms offer additional branding options as an add-on or at the “Enterprise” tier.
Ease of Use & Set-Up	You are completely responsible for set-up, and you will need technical skills (coding abilities) to be able to set-up and configure it to your liking.	Many vendors offer a portal, help center, or academy where you can learn how to use the platform. It may also come with bulk import tools to make it easy to transfer from another platform.
Learner Analytics	You can build or integrate custom analytics tools tailored exactly to your needs but it will take a lot of time to build your own custom dashboards.	Ready-made, user-friendly analytics dashboards are a standard part of the package. Many vendors are starting to add AI to power deeper insights or faster reporting.
Support	You will need to look out for community forums or GitHub repos to find & solve issues. If you’re struggling, there’s always an option to hire extra developers for support.	It’s normal that an LMS platform offers customer support via chat, email, or phone. You may also receive dedicated support for onboarding and customer success.
Scalability & Performance	Scales depending on your hosting infrastructure and configuration.	Can usually accommodate large user volumes out-of-the-box (but you may need to pay for it).

Factors that affect your experience with LMS

If you haven’t narrowed down your search for the perfect LMS yet, don’t fret. There’s a few more things to keep in mind that will be useful to separate commercial vs. open-source platforms, and it will also be helpful to reflect on these when comparing individual platforms side-by-side later in your purchasing process as well. 

Licensing and cost

Having the time and technical skills to draw up your own custom learning system can be a great way to save your budget, but it’s also a great option to pay (sometimes even a premium dollar) for someone to have a plug-and-play solution ready to roll for you. Read here on how to business a business case for your LMS.

Monetization

As your audience grows, how do you want to earn revenue? It’s important to choose a solution that can accept different payment methods and work in the regions you’re targeting. 

Content building & set-up time

Many platforms offer templates to make it easy to get started quickly, or have dedicated onboarding teams to make sure you’re using the platform in the right way. There’s also plenty of options when it comes to deciding if you want to offer quizzes, gamification, documentation, videos, or other types of media in your content. 

Branding & customization

This can vary a lot, depending how custom you want your solution to be. Most platforms offer at least a bit of branding, like being able to add your logo or colors. You can also look for extended branding opportunities like mobile apps, custom layouts and monetization models, or being able to whitelabel the solution. 

Support team 

Being able to access customer support when your site crashes could be worth its weight in gold. Or, you might want dedicated support to help you build out your content if you’re short on time or still learning your way around the LMS.

Availability of new updates

With the way AI is moving quickly today, you’ll want to think about how fast new functionality is rolling out so you can make use of the latest technology. Even security patches or bug fixes are important to catch quickly so they don’t impact your platform’s uptime. 

A deeper dive into LMS licensing and total costs

From monthly subscriptions to hidden fees, development time, or ongoing maintenance, here’s what you need to know about the real cost of ownership from either option.

What can costs look like with a commercial LMS solution?

Most commercial LMS platforms use a tiered pricing model, either monthly or annually. 

• The most affordable plans start at $29 per month and can go as high as thousands of dollars per month if you have a lot of users or content. 
• Most solo creators or small businesses start at the $99-$299 per month range.

Some platforms take a percentage of your sales, especially on lower-tier plans. For example:

• Teachable has a free plan with 10% fees + $1 per transaction
• Thinkific and LearnWorlds have no fees on paid plans

Hidden costs may also include things like:

• Add-ons for custom domains, SSO, or custom integrations. 
• Monthly fees for extra admin or user seats. 

What costs all go into managing an LMS on your own?

First, you’ll need a reliable hosting environment to support your users and content which covers things like:

• Shared hosting costs: $5-$25/month
• Custom domain name license: $10+ per year

If you can code, you’re in luck as you’ll knock off a ton on development costs. If you do need the technical boost, here’s what to expect developers to charge:

• Initial setup and configuration: $500-$5,000 one-time costs
• Hiring a designer for custom development, user interface (UI) construction, content uploads, or branding: $50-$150 per hour
• Plugins or integrations may require extra configuration or custom work at additional cost

Self-hosting your LMS means you’re in charge of uptime, safety, and updates:

• Firewall and security tools can cost $10-$50 per month
• Automated backups can protect your site in case it crashes and can cost $5-$30 a month (if its not bundled with your hosting plan)

The key difference is control vs. convenience

Open-source is usually cheaper over time if you have the technical resources to manage it but commercial LMS platforms are faster to launch and easier to maintain.

When evaluating options, don’t just consider the cost today. Map out your likely expenses over 1–3 years to get the best understanding of which LMS type makes the most sense for you long-term.

Best type of LMS for each creator type

Creator type	Best type of LMS
Solo creators & entrepreneurs	Commercial LMS: You don’t have a lot of time on your hands to create content, manage a full educational program, and design your own LMS. Even if you have the coding abilities, you will appreciate having some of the heavy lifting done for you!
Small training companies	Commercial LMS: It makes a great fit if you have a specific type of content in mind that is not made yet, as this will help you get set-up faster. You’ll be able to add your branding and track analytics at scale as well, making it easy to share reports with teams.
Corporate training teams	Commercial LMS: If you’re operating across a large demographic, lean into a whitelabeled solution like Thinkific Plus that makes it look like a custom solution – without the huge developer fees.  Open-source LMS: If you have a strong technical team in-house who can build the system for you, it’s a great way to potentially save costs at scale. Just be wary that you also need to keep that team available for maintenance and to catch security bugs.

12 questions to ask yourself when deciding between an open-source or commercial LMS

1. What is my budget like today? What do I expect my budget to be like when I have 100, 1000, or 10,000+ users purchasing my content?
2. How much time do I have to dedicate to implementation and maintenance?
3. Do I have the technical skills to code from an open-source LMS?
4. How important is it for me to completely own my platform, instead of relying on a commercial platform?
5. How important is it for me to have an entirely customizable layout vs. leveraging branded templates? 
6. What will I do if my system crashes? Who will I go to for support?
7. Who will be continuously checking for security issues or bugs? 
8. What monetization models do I want to run and what do I need from a technical side to support that?
9. What other software and data integrations do I want to tie into my LMS?
10. How much branding do I need to have on my content?
11. What kind of content am I planning to share through my LMS? 
12. How important is it for me to access the latest & greatest technology? 

Conclusion

At the end of the day, your ideal LMS depends on how hands-on (or hands-off) you want to be. Want full control and flexibility? Open-source might be your jam. Prefer something that’s ready to go with less tech stress? A commercial LMS can save you tons of time.
If you’re leaning toward an easy-to-launch, creator-first platform, Thinkific is a great place to start. Give a free try for 14 days here!