The LMS Is a Commodity—So Why Pay (and pay, and pay...) a Premium?
In his post, "The LMS is Dead. What Will Replace It?", Alfred Essa poses a critical and often-overlooked question: "What does an LMS actually cost?" For a mid-sized U.S. institution with around 10,000 students, the answer isn't just a licensing fee. As Essa documents, it's a long-term financial commitment that quickly climbs into the hundreds of thousands of dollars annually when you include maintenance, integration, support, and training. Yet, that's only part of the total cost: it's also vendor lock-in that's often too expensive to escape from; it's also the "upsell" that turns the proprietary LMS into a marketing and sales channel for vendors; it's also the forced switching costs resulting from the volatile corporate edtech world of M&A, bankrupcies, and other business disruptions.
Essa's analysis points out that licensing alone can run from $75,000 to over $200,000, depending on the platform. But as he emphasizes, licensing is just the start. "Once implementation, integrations, maintenance, training, and support are accounted for," he writes, "the LMS becomes a recurring institutional commitment measured not in tens of thousands of dollars, but in hundreds of thousands." As a rule of thumb, the total annual cost of an LMS is approximately double its licensing cost.
Essa provides a breakdown (see table above) that compares estimated annual licensing costs and total costs across major LMS vendors. While platforms like Canvas, Blackboard Learn, and D2L Brightspace incur total yearly costs of $240,000 to $400,000+, open source options like Moodle and Sakai stand in stark contrast, with $0 in licensing costs and estimated hosting/support expenses of just $40,000 to $80,000—a reduction of 75–80% in annual spending.
Yet, as Essa rightly notes, there's more than just acquisition and maintenance costs at play. He identifies a key trend in the enterprise software market: the upsell. Once a campus commits to an LMS, the vendor begins expanding its domain—not by improving teaching and learning affordances through its core product (which has matured), but by layering on additional proprietary services, tools, and "enhancements." The LMS becomes a platform (i.e., marketing and sales channel) for add-on dependencies, not innovation. This is where the hidden cost lies—not just in dollars, but in freedom (choice of tools) and flexibility (how to use them).
However, Essa neglects to identify value beyond the initial acquisition and support costs: both the academic and technical strategic advantages of open source. While he includes Moodle in his cost comparison, he does not fully explore how open source changes institutional dynamics: how educational technology can advance educational activities. Open source platforms are standards-based and vendor-independent. Campuses using Sakai, for example, can freely integrate other edtech tools that follow open interoperability specifications (thus, any tool a campus likes) without being locked into a single vendor's products, roadmap, architecture, or pricing model.
In addition, with proprietary LMS ecosystems, a second layer of vendor lock-in emerges. Not only is the core platform licensed, but the data, integrations, workflows, and services become entangled with vendor-specific APIs, data, and architectures. This creates what could be called "double lock-in": locked into the software, the surrounding services, the infrastructure, and even business processes/workflows. Migrating away from such systems is not just technically complex—it's prohibitively expensive.
Once you buy that mechanical pencil, you're committing to buying the same company's leads and erasers.
Essa also highlights that the LMS plays a necessary, though commoditized, role in the modern university. As he explains, its functionality—discussion forums, document sharing, grading, and course provisioning—is fundamental, undifferentiated, and widely available. The LMS is a commodity. No institution gains a competitive edge from its LMS, any more than a retailer gains market share based on its payroll software, e.g., how well Target calculates employee overtime versus Wal-Mart. Students do not choose a university based on its learning management system; they don't choose it based on its email provider (Microsoft 365 vs. Google Workspace); they choose it (ideally) based on its academic/institutional reputation (majors offered, credentials, rank, costs, etc.). Indeed, after 30 years of working in higher education, I've never heard a student say, "Well, I chose UC Davis over SUNY Albany because Davis runs Canvas, and I like that better than Brightspace."
And that's exactly why open source should be the default. Why pay a premium for commodity functionality? Would any campus today license a web server when free, open source commodity services like Apache or NGINX exist and outperform their proprietary counterparts?
Crucially, as Essa concludes, "Learning innovation does not live in the LMS because it never has. It is local. It resides with those on the front lines — faculty and learning designers." This is where the real value lies, and where resources should be directed—not into bloated LMS budgets, but into the humans who create and deliver meaningful learning experiences.
When I was at SUNY Delhi, for example, we transitioned from Blackboard (after being pushed to migrate from WebCT after it was bought by Bb) to an open source LMS. The shift away from costly licensing allowed us to reinvest in our people and services: extending help desk hours, hiring an instructional designer, and adding a "campus concierge" to support remote learners. That's real innovation—driven not by vendors, but by institutional priorities.
Finally, I'll add the additional costs that Essa does not include: "Forced Switching Costs," related to unplanned migrations due to mergers and acquisitions, bankruptcy, product depreciation, or vendor exit from a market. These events are not only expensive to address but, in addition to disrupting the IT service itself (e.g., the LMS), also disrupt the institutional activities that the service supports and the IT staff that must now manage a migration they did not plan or budget for.
Conclusion: Take Back Control Through Open Source
If the LMS is a necessary but commodified layer of university infrastructure, then the case for open source becomes both practical and strategic. Open source restores agency. It allows institutions to realign budgets, reduce vendor dependency, and reinvest in their true differentiators—faculty, designers, students, and staff. Just as campuses should take back the design, development, and delivery of courses, as Essa highlights, so too should their IT teams take back the design, development, and delivery of digital infrastructure. Open source is more than a licensing model—it is a return to institutional self-determination.