Friday, June 26, 2009

The Corporate Moodle: A Tipping Point?

Richard Nantel of Brandon Hall recently posted about average LMS prices. A ‘low-cost’ LMS starts at an average of $58K. That’s the low price. Which is still a whole LOT of money.

And “in times like these…”

Why pay for a pricey LMS when you can Moodle or Drupal or Sakai?

Why do companies continue to pay huge dollars for products that are now being offered for free? Web conferencing services like DimDim now offer the equivalent of WebEx. For free.

(I’m a recent convert, perhaps on the path to open source evangelism.)

So what are some of the hurdles to overcome in the corporate market? Here are just a few:

It’s free. Because it’s open source, there are no licensing costs. This, apparently, freaks people out. Free must mean sub par, right? Wrong. Moodle and other open source products have huge communities behind them. Talented individuals who can program like hell and believe in the open source philosophy. (Note: Hosting costs aren't free and any customizations you do or support you'll need may require some moolah.)

Support. There’s no vendor who creates Moodle per say. That means there’s no 800 number or help desk you can call. That means your IT department has to know how to do all the code. Sure they can. Or you can contract with a company like Kineo that can host and support your Moodle for you (at the risk of sounding like a company shill!)

It’s not for corporate use. Well, it’s true that Moodle was originally created for academic use and it already has a great foothold in the academic world. But Moodle is increasingly being used in the corporate market. According to an eLearning Guild survey conducted in 2007, 18% of respondents in corporate settings reported using Moodle.

Out of the box, Moodle may not have all the features an enterprise needs, but simple add-ons can be created. Kineo has recently worked on creating a classroom management add-on for a corporate client and has a fabulous Moodle reporting tool.

It looks so very bland. Moodle out of the box is like vanilla pudding. Pretty plain. But the beauty of open source is you can customize it. Kineo has done some really fabulous interfaces that look slick, modern and way beyond what you might think possible. We’ve integrated Flash animations into Moodle home pages and replicated clients’ existing web sites. Take some vanilla pudding, add raisins or rainbow sprinkles or a caramel swirl.

I think the time for open source is now. What about you? Do you think we're at a tipping point?

Update: Want more evidence of the tipping Moodle? Check out a more recent post from May 11, 2010 profiling Tesco's Moodle.


Janet Clarey said...

I'm going to say no, we're not yet at a tipping point. Because (1) LMSs in corporations are primarily used to track stuff (IMHO) so until open source is truly able to slice and dice data (often custom reports) for executives they won't replace commercial LMSs. (2) Integration. When your LMS is embedded in the process of talent management, I think it's unlikely that a company will abandon their LMS to open source options that are not designed for that type of integration. (3) renewable licensing structures (4) previously completed customizations to address internal, unique processes will be difficult to duplicate (5) The need to be able to blame someone for something.

You raise some excellent other issues: the mindset around free being subpar, IT support, and intended usage.

Regarding the survey showing 18% of organizations use Moodle...should be "among respondents to the survey, 18% use Moodle." I'm not certain that respondents include the entire industry. I'm sure many of the organizations at the ASTD conference, for example, are not represented in a survey primarily made up of organization heavily made up of respondents involved in e-learning. (or course I don't know that for's a hunch). I think there may be (and are) more rogue Moodle usages within corporations to handle certain groups.

Janet Clarey said...

Grammar malfunction:
I'm sure many of the organizations at the ASTD conference, for example, are not represented in a survey heavily made up of respondents involved in e-learning. (of course I don't know that for's a hunch).

John D Roberts said...

I'm with Janet. Integration with enterprise systems - even if just registration and reporting - is big. I'm not convinced it's as hard or as important as conventional wisdom has it. But requiring this integration it blunts the argument that there are big savings in open source, since you'll pay an SAP programmer or a Moodle programmer a chunkachange in the process.

I think the opportunity for open source and Moodle specifically lies in trying what I'm call "bottled pilots" when I talk to colleagues here. Key factors: Spend little, invest modest sweat equity, make the most of out-of-the-box features (and don't get too far head of learners or org. culture with the whiz-bang) and keep the contents (content and data) out of enterprise systems. If you want to do testing, use something that already links to a tool that feeds your Oracle or SAP behemoth.

Time will tell whether the software had anything to to with the program and learners' success.

By the way, no one is biting on the bottled pilot approach yet, but you know, wind and water created the Grand Canyon, so....

Linda said...

I am also going to say no as Open Source LMS's are not "essentially free", they need a technical support team at hand and this expense can be offset by outsourced managed services for LCMS's that need little or no technical knowledge. Our customers benefit from low-cost and self-management with no technical knowledge required.

Cammy Bean said...

Janet -- I've amended above regarding the survey respondents. "Spot on" as they say here in the UK.

As for the other points, I'll address as I have more time and insight (still working through much of this myself).

I do know that reporting is crucial. I've seen some demos of the reporting customizations our team is doing on Moodle and it does provide a lot of what is needed.

Integration with other systems also a big one and can be addressed. We're seeing more and more requests along those lines and have even integrated some Moodles with LMSs. And per Linda's point and John's -- doesn't have to be a huge 'chunkachange'.

I'm not sure what you mean with #3? Does this mean LMS's cut their prices when a license is renewed?

John -- by "bottled pilot" are you thinking more of a tactical implementation -- low point entry to LMS to test the waters?

John D Roberts said...

re: bottled pilot. I'm thinking, sidestep the integration issues. Just build something simple and effective for, say, a particular program that's a good match for open source L(C)MS feature set. Use it as a proof case among learners and program designer/facilitator/coordinator/whathaveyou.

If you didn't spend a lot of time customizing, do you think the price of such a pilot would be low enough to make it worth a try?

Would it be very expensive to back out of such an installation, assuming the media and content could be reused?

Unknown said...

The answer might depend on the market segment.

At smaller organizations, where training budgets are limited (or nonexistent), hosted open source learning platforms will certainly play a larger role, according to our research.

Our customers are price sensitive. But more importantly, they appreciate a complete and convenient solution (templates, wizards, webinars, usability, etc).

Out-of-the-box Moodle holds little attraction to a busy trainer or business owner who lacks an IT staff or instructional designer.

I concur with Cammy that Moodle has been slow to respond to the need for better reporting, which might slow adoption at larger firms.

bschlenker said...

I'm fairly certain that google analytics could crawl a moodle install and reveal some amazing tracking measurements. I've seen some very impressive uses of google analytics as a measurement/tracking tool for web-based training.

In my opinion, creative use of open source technology could return a system far superior to existing offerings.
The problem is that creativity is not rewarded in big corps. However, small businesses demand it , and require it to survive.

Judy Unrein said...

Brent, that's an intriguing point.

Recently I started an e-learning development project for an area of my company I don't normally work with, and the audience for the project was a different group still... one that would not have access to our internal LMS.

I strongly recommended setting up an LMS (with Moodle being my top recommendation, as our needs were few -- obviously, since the instructional designer was the one pushing the need to track stuff). One of the other individuals involved countered with something like, "Why don't we just post it on x site and use analytics to track all the stuff you want to track?"

Based on my knowledge, I don't see Google Analytics being as useful for tracking learner behavior as the LMS tools would be, and I'm curious -- very curious -- what functionality you would gain out of combining the two. Can you give us some more specifics?

jay said...

Cammy, I think you're on the right track. The LMS emperor has no clothes. Last week in Madrid, I worked with Moodle consultants who have extended the system and install it in major corporations. Jane Hart's ELGG implementations are catching on, too. Drupal can be a little tougher to crank up, but they're coming on stream as well.

Truth be told, many of the reports spit out by traditional LMSs are next to worthless anyway. They comfort managers who think they are in control but don't provide any guidance on making improvements.

Open source brings a tremendous advantage over proprietary software: it gets better over time. I'm in love with WordPress because each new release improves things that I hadn't even perceived as problems.

Janet's right that companies will be slow to change -- because they've wired their LMSs into other systems. However, my gut tells me that new enterprises are going to be increasingly reluctant to pay the bill for what's in essence a glorified database app.


Steve said...


Just to enter the debate, we have installed some great reporting modules for Moodle so you can choose which learners you want to see, what they have done, what they scored etc. Can't see any reports a commercial LMS produces that you can't replicate in Moodle but happy to hear of them.

On integration it depends what you mean but we have done single sign for corporates so users don't need second passwords etc. We have also integrated with systems such as Oracle HR to pass new user data from Oracle HR to Moodle and learner data such as courses completed back to the HR system.

You do have to pay to customise Moodle of course, but this is similar to comemrcial LMS solutions and I would argue costs are significantly lower. At least you have a choice of vendors to do the work. Then of course there are no annual per user licence fees with Moodle.

Moodle is not perfect for corporates yet but with Moodle 2.0 and with all teh add ons beign developed for coprorate clients i think we are very close to tipping point.

Steve Flowers said...

Moodle and its open source brethren lack the HRMS integration savvy and talent management featureset of offered by the LMS snake oil sales brigade.

The healthy stack of features (the sum of the features in all of the legacy clientelle further bloated by new stuff) carried by most of these vendors may be what folks think they need.

How many times have we seen change processes that don't accomodate the full implementation or reallization of efficiencies in many cases?

How many times do we need to see customizations to the LMS workflow or architecture to bend to the same old way of doing things?

In the government market the decisions on LMS selection are rarely made by those that (1) will use the system or (2) that will actually be responsible for it. As value for the dollar goes these folks have been taken to the cleaners in nearly every case.

There are essentially three camps in my organization (1) the parent agency, that favors one of the big LMS products (2) the small army of novices driving the ADL boat (3) the HRMS folks. (2) and (3) don't seem like they'll ever agree and they are both missing the point... I'd imagine that this is common in most organizations.

The turning point, I hope, will be the reallization of what folks really need and can reasonably use and a modular focus on implementation of these features (buy what you need... not buy the licenses then pay for every minute, in triplicate, for customization.) The market has bore this crap for a bit too long.

As Jay says 'Truth be told, many of the reports spit out by traditional LMSs are next to worthless anyway. They comfort managers who think they are in control but don't provide any guidance on making improvements.'

Reports that are largely empty sets of worthless data, because we were all sold on the promise of the technology and failed to prepare ourselves, look to change our processes to prepare for new possibilities, or take a hard look at what we really needed...

The turning point is the consumer's to grasp. In many cases, what we really need is to lay off the tech addiction and get down to brass tacks on solving organizational dysfunction (getting over ourselves), improving leadership, and figuring out how we are going to USE process and technology BEFORE we invest in it.

Moodle is an awesome tool. Yet, I still have trouble seeing it as a full fledged LMS. Maybe more investigation in order. We have been trying to get it online as a 'sometimes connected' portable launch and track for our deployed units, but we seem convinced that whatever LMS we pick will probably have a sufficient deployed unit tracking facility.

But, alas... this would be a waste of effort. Most government IT rags on the market have poisoned the openSource well, as have most consultants that do work with the government. Open source isn't connected to anyone we can blame for problems, not that customers typically have enough balls to take a vendor to task, since the people that picked and bought the system have moved on to other things while the poor bastards left to deal with it... deal with it.

rant... done... :)

Steve Flowers said...

John Roberts mentions an openSource LCMS. I'm not aware of any OS LCMS products - maybe someone can point me in a new direction?

Cammy Bean said...

By the way, the "Our Blog" comment above came from Steve Rayson of Kineo.

John -- I think the answer is yes. You can start as small as you like and get a Moodle up and going for pretty small change. I know of one of our clients who recently did a Moodle implementation as an interim solution before launching a big LMS. They never bothered to convert as the Moodle's been filling the need just fine, thank you.

I don't know of any open source LCMSs yet. Waiting for an open source authoring tool. Wouldn't that really stir things up?

Steve Flowers said...

Hell, yeah. The authoring tool market suffers from many of the same maladies as the LMS market.

If anyone out there wants to start a simple authoring tool project, I'm game to participate. The industry needs some disruption to break that rust.

Anonymous said...

Hi there,

I'm taking the opportunity to mention Dokeos here, as its lead developer, because it seems unreasonably ignored from the open-source LMSes sphere, and it has the same price-ranges for services than Moodle.

However, it has a lot of reporting features, it recently developed web services which have enabled links to an Oracle system for automated registration of users from an organizations' HR module, and to Drupal (see Dokeos module in the Drupal repository).

Dokeos is also reportedly (much) more intuitive than Moodle (although less flexible in some aspects), which makes it easier for teachers with no previous knowledge of e-learning to start creating online resources.
Where Moodle is based on social constructivism, we're focused on the classical learning model where a teacher teaches his class and keeps control of the course contents (I don't want to dive into whether that's good or bad, it's just different).

I wanted to comment that, overall, we're facing the same problems as Moodle (in terms of marketing free software) except two:
- we are not as popular (obviously, this article is just one of the thousands of examples)
- we are just now developing hosting-only packages of Dokeos which contain specific additions for the corporate market (and of little use for other markets). These packages are mainstream (with a unique source for packaging). We'll see the results of this within 6 months.

Dan said...

@dokeoslead Thank god someone else pointed this out. Having set up a Moodle install for corporate purposes, I spend a lot of time working out how to restrict the HE/FE features that our learner base will not be interested or able to use, or how to get a consistent interface (my budget hasn't extended to getting the pros in to sort it out for me). Sadly I did not encounter Dokeos properly until after we'd signed the contract on Moodle, else it would have been a no-brainer - the style is abrupt but simple and the clarity in the interface is refreshing.

It's a herd mentality as some people I've spoken to suggest that they like Dokeos (or Claroline or Sakai) more than Moodle but can't be bothered to press clients eager to have a slice of Moodle pie.

For me, the problem with corporate LMSs, as with CMSs, is the underlying code for basic LMS features just doesn't seem to be so tough to put together, so every man and his dog, having seen some of the obscene sums that older LMii commanded, seems hell bent on doing it his and its self. Here I'm talking about the sea of one off LMS opportunities that middle sized development houses offer alongside their ID/development work.

It's this daft habit that is eating at commercial LMSs as there are no clear commercial winners that get a solid professional following (do any have strong popular followings?). The hacky enthusiasm of Moodlers on the otherhand seems a clarion call to the befuddled punter, awash in a sea of possibilities, or perhaps already let down by a proprietary LMS offering whose development they were probably funding.

Max Ferrari said...

maybe I am entering the debate a little bit late, but still I want to share my experience in the Italian market. We are a small group of consultants and e-learning specialists, yet we work with very large organisations (Benetton Group, large retailers, Italy's tax collection agency, large companies....). We do use an open source LMS and - up until now - open source has not been a problem. Of course we had to provide and guarantee reporting, detailed tracking, integration, single sign-on and interoperability but we always managed to deliver what was needed.
I basically agree with much of what "Our Blog" has said. I can also add that the LMS we use (docebo) is already Corporate-centered (that's why we've chosen it over Moodle) and that LMS is only half of the story in the e-learning market, the rest being the quality of the content and the quality of the learning process.

Cammy Bean said...

Interesting article on open source and the enterprise. It doesn't mention LMS's, but good discussion of some of the general hurdles, etc: Open Source is Infiltrating the Enterprise.

Tony McCune said...

The observation that Moodle or DimDim are not supported by any company per-se isn't quite right, most of these products have a commercial entity behind them, for example is controlled by and they sell support as well as control the source code. DimDim has both open source and paid subscription offerings (SaaS)

As an e-learning software company I can tell you that large portions of the commercial products and online services have elements of open source in them. DimDim has about eight other open source projects embedded into it for example. With DigitalChalk, we use a number of open source tools to do specific back-end functions of the system.

The thing to keep in mind is open source is not free, it's like free puppies, you didn't pay for the source code but you will pay for the care and feeding of that software for as long as you use it. I'm not saying don't use it, (quite the opposite) but just make sure you count the total cost.

Steve Rayson, Kineo said...

Hi, Great debate you started Cammy. Just to agree with the last point about support; the key is actually that many companies support Moodle and and other open source platforms; and you can choose the one that works best for you. The competition also argubaly means you get good customer service as you are not locked in for support to one company as you are for a proprietary LMS.

The core code may be free but you will still have to pay someone or get someone internally to install, configure, host and maintain Moodle. However, this applies to proprietary LMS software as well but with Moodle there are three key benefits:
No software licence fees, the huge user base which is generating extra modules and features, and not being locked into one supplier for support or customization. With Moodle you can spec a feature you want and ask a number of suppliers to quote for the work.

Also wanted to agree with the points on other open source LMS options. Dokeos is very simple to use with good reporting, I also like Ilias.

Julia said...

In our behemoth high-tech company, Moodle proved not to be ready for prime time. Our instance seemed to be geared for course registration management. We discovered many limitations when it came to e-learning. We could only collect one SCORM variable, for example.

As others mentioned, the reporting issues are huge for many of our stakeholders. (And yes, the merits of reporting can be debated endlessly.)

Another key limitation is in the "talent management" functionality. We couldn't map skills or competencies to learning solutions within Moodle, for example.

I think Moodle is not keeping up with the "next generation" of LMSs of which Janet has researched and written about extensively. I haven't seen Moodle 2.0, so maybe this is a moot point, but it just doesn't seem to be innovative enough for the companies with which I have worked.

Marten said...

I want to suggest you try and perhaps review - its an alternative tool for dimdim that allows document sharing and Free Web meeting in real-time. all the participants in the session see each others' drawing, highlights, etc. It is free and requires no installation.


Oliver said...

"No software licence fees, the huge user base which is generating extra modules and features, and not being locked into one supplier for support or customization. With Moodle you can spec a feature you want and ask a number of suppliers to quote for the work."

Can you imagine keeping a single, elaborate instance of moodle up to date if you went out to multiple suppliers for enhancements? Moodle is marvelous for basic requirements of learner management, as soon as things get complex I would argue talking to a commercial vendor makes more sense. The functionality is pre-built and tested and costs (with one or two exceptions) are coming down so much that over a three year period, many commercial providers would be less expensive than Kineo.

Brad Fisher said...

My feeling is that most for pay LMS's out there with the exception of Saba, struggle with legacy issues up the patoot. Sumtotal is a trainwreck, and Oracle's implementation is a joke.

That said, for Moodle to play with the big boys, it needs to support ERP system integration and Multi-tenancy.

Michael Hanley said...

Good to see you running up a flag on using open source software (OSS) LMSs in corporations. A couple of points:
1. I support Janet's view - I don't think that OSS LMSs are at a tipping point yet: compare the much broader use of Apache in corporations, for example.
2. I try to steer clear of the term "free" when discussing OSS, as there is still a cost associated with implementing the software - it's just not up-front money. In my organisation, we look at total cost of ownership when evaluting the "price" of a solution - some indiators include associated hardware costs (it has to sit on a server, after all), and admin, management, development, upgrade, and customisation costs (e.g. the individuals who look after the system), as well as - of course - time to support the solution once implemented.

That said, I like the bland UI - it's highly customisable

I think the key issues for corporations considering using Moodle and the other solutions you mentioned are interoperablility with other enterprise system (HRMS, CRM etc), and support for protocols (i.e. LDAP integration, firewall configuration and so on).
However, no harm at all raising awareness of solutions like Moodle - even as a corporate shill!