Comparisons and advocacy

 
 
Picture of Moo Con
The Economics of Moodle?
 

I am struggling with the whole Moodle free thing. As I understand you don’t pay a license fee as it is open source. I can’t code nor want to spend time learning how Moodle works which means I have to pay for a developer or hire a Moodle consultancy. So how does that work as a business proposition? Seems I don’t incur a license fee but make that up with paying for development. I guess if I did pay a license fee for another LMS then I would have an out of the box solution which would be well tested. So what am I saving? Seems that waht you save in money you spend in time? I am not from a large learning institution with big budgets and don’t have access to a whole bunch of IT developers to call on. I would welcome any thoughts on the actual economics of using Moodle as it does seem popular and would be keen to start using it if I could see past this issue.

 
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Volcano
Re: The Economics of Moodle?
Group Developers
Moo:

It is true that you don't pay a license fee for Moodle. And it is also true that you need to budget either your time or that of a support staff to set up any server and keep it maintained, keep the users trained, do customization, etc. Or you can pay a fee to use some company's server that supports Moodle.

What is not true is that this type of cost does not also exist for commercial software even if you do pay their license fee. You still need a server, training, and support which always comes with a cost. And in most cases, commercial software is closed source, so you do not have the ability nor the right to change it. So you are pretty much stuck unless you can convince the sole source to customize if for you. They have monopoly power.

There are a good number of people who make it their business supporting Moodle, most (but not all) that do it with any scale are Moodle Partners. In many cases you can have them set up your classes (and give support with their servers) for from $1.00 to a few dollars per student per course (depending on their services and the number of your students, etc).

You can check out their services from the ads on this site.

Free and open-source software is a big thing, especially in the server world, so Moodle's model is not all that unusual or something to be too skeptical of.

--Gary
 
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Picture of Glenys Hanson
Re: The Economics of Moodle?
 
Hi Moo,

Just to endorse as an ordinary teacher (not a programmer, a Moodle partner, or in any way involved with Moodle.com) everything that Gary has said. I've tried some other VLE's and for me Moodle is the easiest to work with as well as the cheapest. It does take some investment in time but you get lots of help here on the Moodle forums.

Cheers,
Glenys
 
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Tim at Lone Pine Koala Sanctuary
Re: The Economics of Moodle?
Group DevelopersGroup Documentation writersGroup Particularly helpful Moodlers
http://www.oss-watch.ac.uk/resources/cs-moodle.xml#body.1_div.5 gives the other side of the equation - that is how the Moodle project makes enough money to pay for developers, etc.

But to answer your question. With Open Source software, you have a choice between acquiring the skills needed to run Moodle yourself and paying nothing apart from hardware; getting a member of your staff trained to support Moodle in-house; paying anyone you think is qualified to run Moodle for you; or paying an official Moodle Partner to host your Moodle.
 
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Martin Langhoff - Sailing
Re: The Economics of Moodle?
Group DevelopersGroup Particularly helpful Moodlers
In general terms -- there is a huge IT industry around Open Source Software, and an extremely profitable one at that. Moodle is part of the larger Linux Ecosystem (as well as part of the OSX and Windows ecosystems), today a study was published calculating that the Linux ecosystem has a value of USD 25 Billion. Haven't read the study, but it's surely an interesting one.

More specifically about Moodle, Martin Dougiamas explains the ecosystem in his talk in every moodle moot (conference). Many moots capture this in video and post it, so just search for it. The moodle moot in italy is on, MD's just finished talking here, and they are streaming it and recording it. You might be able to get a really "fresh" version of it smile
 
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Picture of Visvanath Ratnaweera
Re: The Economics of Moodle?
 
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Picture of Moo Con
Re: The Economics of Moodle?
 

Hmmm, still not convinced that it has any advantage over other like LMS ’s out there. The theme of the replies agree that if I don't have time to learn Moodle then I would have to pay for a developer(s) which obviously would have a cost. I checked out some of the Moodle partner web sites and one actually admits that open source is high risk for a business. I would tend to agree. While I agree that open source is free from license fees which makes it great to develop stuff that does not mean that if you use it for a business application it is going to be any cheaper or less riskier. Frankly I would be prepared to pay a higher price if it means I don’t incur the wrath of an upset customer. I also note that Moodle Partners pay a contribution to Moodle, isn’t that a license under another name?

 
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Picture of Robert Brenstein
Re: The Economics of Moodle?
Group Particularly helpful Moodlers
The contribution which partners pay is like a franchise fee they pay in exchange for being able to use Moodle logo and name to advertise their business. Their customers pay them only for services rendered, no license fees.

In terms of using open source versus commercial products for business, it really depends on many factors. On the long term, the overall cost of running open source product is probably about the same as for commercial alternative. The depends part refers to, for example, what you are going to use it for exactly, how many customizations you will need, how many users, what people you have on your stuff, and so on, and so on. There are businesses using Moodle very happily, some even quite large, and they are businesses that went for, for example, SumTotal, and are happy as well. Each solution has advantages and disadvantages, risks and requirements. There is no simple yes/no answer without digging deep into your business plan, reviewing your past business performance and prudence, and viewing what your competition does and why. And just like there are many commercial products, there are many open source products serving VLE, CCMS, LCMS, CBT, CAI, MLE, AICC, LSS applications.
 
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Smores are yummy...
Re: The Economics of Moodle?
 
In my experience it really depends on what you are trying to do. Be sure you are comparing the same 'product'; for most commercial products if you wanted a way to deliver course material online you could get the 'basics' for about the same cost as if you were to deploy an open source solution. However, when you start wanting things like LDAP authentication, integration with your student management systems, a simple content repository, a real time collaboration environment, etc... The cost of the commercial product would often jump to six figures PER YEAR... Most of the functionality we needed comes WITH moodle and we could use our savings on the per year license fees to secure a good real time collaberation system that integrates seamlessly -- all for about the same cost as the 'basic' edition license costs with none of the added features. That all of course depends on your staffing and their abilities as well. There are indeed lots of variables.

I don't know how 'large' of an installation you need but you can probably use a moodle partner that offers hosting and support (and not worry about needing a developer or system admin) for much less than you can get comparable services from the commercial vendors. If your install is small many large vendors will not even have a hosting package that scales down to the level you need.

ns
 
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Picture of Michael Penney
Re: The Economics of Moodle?
Group Developers
If you don't have time to learn Moodle then you would have to pay for an LMS Administrator, not a developer. Developers are best for adding new functionality, not teaching & supporting users. Conversely, your LMS Admin/SysAdmin should not be writing code.

Any LMS implementation of any scale, commercial or open source, should have a budget for a technically skilled LMS administrator - this person needs to know how the web works, what a stateless application is, how to run traceroute, what an IP address is, etc - as an LMS is a web based applications there are a host of basic skills any LMS admin should have beyond simply how application X does Y. Many partners can provide these positions if you don't want to hire them yourself. A very general rule of thumb is that you want one FTE (full time equivalent) for every 10,000 users, though this may be too low if your users need alot of help with computers in general, e.g. if you don't have a general purpose helpdesk in addition to specific LMS support.

Above ~10,000 users, if you are hosting the system on your own machines, you should also have SysAdmins and DB Admins. I've been running these things since 1997, custom built, commercial, and open source - adequate staffing numbers and adequate staff skills are always critical.

There are a host of reasons for using open source vs. closed source - but the staff levels and staff skill sets are about the same - with the standard commercial license of most closed source LMSs you pay for 'permission to use the code' not 'fix any problem you have'.

There are some closed source LMSs that provide full 24/7 help desk, application customization, hosting, etc. with the standard license - they start at ~$100/user.

 
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Picture of Moo Con
Re: The Economics of Moodle?
 
Thanks Michael for your feedback. I have found some very good e-learning service providers who supply all services and technology which actually works out cheaper than if I go down the "do it yourself" using Moodle path. At the moment the business risk is just to great. I am sure Moodle is excellent software for Schools etc but when you have to service clients, well that's a whole diffrent matter.
 
regards
 
Jay (Moodle Confused)
 
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Picture of A. T. Wyatt
Re: The Economics of Moodle?
 
I would mention one additional thing you might not have considered (and, possibly, may not need since you state that you are not a school or university).

We have developed into a situation where we need multiple instances of moodle to serve various needs on our campus. We also have added a fair number of additional/limited duration users from local high schools, etc., over the years.

When we were locked into a proprietary system, we would have been bumped up to another level because of these new users (most of whom were only taking a single college level class, and sometimes for only one semester--changing the license for this level of use was proportionately very expensive). According to our sales rep, we would have been required to buy ADDITIONAL licenses for each separate instance of the software that we wanted to run. Right now, I think we have some 5-6 instances of moodle that we use for various purposes on our campus; all but one has a full complement of users. This would have multiplied our licensing costs by an enormous amount.

I think you need to consider your growth potential and whether or not you need to retain large numbers of users in an active archive. This can change your cost analysis by quite a bit over time.

atw

 
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Martin Langhoff - Sailing
Re: The Economics of Moodle?
Group DevelopersGroup Particularly helpful Moodlers
That's a good point. Any business that might have a spike in training -- maybe a large influx of seasonal positions, or having to provide some key training (safety related, for example) to a suddenly large number of external contractors -- benefits instantly from the fact that moodle has no per-seat or per-site licensing.

Add 1000 users and there's no extra cost, or a few more moodle instances (this may have a small/moderate cost if you're subcontracting the hosting as many do).
 
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Me and Ray
Re: The Economics of Moodle?
 

Dear Jay "Moo Con"

Con-fusion reigns.

If you are not happy with a product off the shelf, then

  • with a commercial product you will have to pay for the cost of the product, the cost of development to make the product fit your needs (and support if required),
  • with an open source product like Moodle you only have to pay for the cost of development (and support if required).  

Whether the product it adequate to the demands of a particular environment will depend upon the quality of the product and support. As far as I am aware the main commercial products have as many bugs, and there is little to suggest that the companies supporting the commercial products are any better than the companies supporting the open source products.

A commercial product provider may claim that since they created the product then they are better prepared to support it. If you are persuaded by this logic then you can approach Moodle headquarters for support.

Finallly, it is not clear to me that schools and colleges are any less demanding than "clients", since providing learning content management is the focus of their business.  

Tim

 
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Picture of Visvanath Ratnaweera
Re: The Economics of Moodle?
Group Particularly helpful Moodlers
> still not convinced that it has any advantage over other like LMS ’s out there

There is much written about free software [1]. The most difficult thing to understand about free software is the fact that you are free - free to choose what you want - even free to choose a non-free solution.

> While I agree that open source is free from license fees which makes it great to develop stuff that does not mean that if you use it for a business application it is going to be any cheaper or less riskier.

Moodle is released under this free licence [2]. In Para 15 and 16 you can read about the warranty and liability.

> I also note that Moodle Partners pay a contribution to Moodle, isn’t that a license under another name?

There is a distinction between software and service. For example Moodle is software, the Moodle Partners provide service. There are many free software and far fewer free services wink


[1] http://www.gnu.org/philosophy/free-sw.html
[2] http://www.gnu.org/copyleft/gpl.html
 
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Picture of Anton Pienaar
Re: The Economics of Moodle?
 
There is another cost. Particularly if you are migrating from an off-the-shelf proprietary LMS to Moodle. The cost is emotional. I was hammered for daring to suggest moving from a loyal relationship with a LMS vendor to the OSS community. In spite of research and the hype in support of OSS LMS, I had to work that much harder convincing management of the advantages of a migration to Moodle. Consultants were brought in to test the desicion. Although the evidence was overwhelming that the academic community was in favour of Moodle, IT and senior management reserved the right to decide. Senior IT and senior management still prefered to have a telephonic life line to a off-the-shelf product (who can we call when it breaks), even if the purchase cost is exhorbitant. After two years of meetings, training, show & tell sessions and advocacy, I lost the battle to a popular LMS. Was it worth it? Definitley not.
 
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Martin Langhoff - Sailing
Re: The Economics of Moodle?
Group DevelopersGroup Particularly helpful Moodlers

Ouch! That feels hard.

It's got nothing to do with Moodle however. It's about the organisation (or parts of it) not being ready for change.

Senior IT and senior management still prefered to have a telephonic life line to a off-the-shelf product (who can we call when it breaks)

They can get that with Moodle, just by hiring a Moodle Partner or any other IT company that understands Moodle and has a strong reputation of rock-solid support. In fact, it is way easier to get good quality support in the OSS world than it is in the proprietary world, thanks to much more dynamic competition (you still have to be a smart shopper).

On a more personal note, I hope that what you did helped open up things a bit... or that a more open workplace is in your near horizon smile

 
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Picture of Howard Miller
Re: The Economics of Moodle?
Group DevelopersGroup Documentation writersGroup Particularly helpful Moodlers
It's a bit like you vote a certain because that's how your parents voted. There are plenty of people in IT Management who have known nothing but licence fees, support packages, training packages and, dare I say it, being wooed by people in sharp suits with a big expense account. Anything else is unknown and scary. They don't like it when I turn up in whatever was nearest the door in Gap and are lucky if they get bought a coffee in Starbucks.

Sometimes you *do* have to work a bit harder. Sometimes it pays off and sometimes it doesn't. Got to let the commercial guys have some of the jobs I guess smile
 
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Picture of Howard Miller
Re: The Economics of Moodle?
Group DevelopersGroup Documentation writersGroup Particularly helpful Moodlers
Hmmmmm.... my $00.02:

There's a few points that spring to mind...
* Open source (Moodle included) is about freedom of choice. You can have the software for nothing and (more or less) do what you like with it. You can run it where you like, provide it to whoever you like, wherever they are, doesn't matter how many there are, buy support from whoever you like, support it yourself. You choose?
* The entry costs are low hence risk are low. You can do a basic pilot with very little investment. Even if you hire a consultant - a Moodle Partner even - you should be able to keep the costs right down. If it works out for you - fantastic. If it doesn't you're not going to loose your job.
* Moodle is a VLE/CMS/LMS and that's pretty much it. It doesn't make the tea or run your entire IT infrastructure. You can have all that stuff in Blackboard (for one). If that's what you want - to write a big cheque and have it all done for you - then cool. There's nothing wrong with that.

But... the big thing for me has always been. Moodle might not be perfect (not quite anyway smile ), but I think you might find that it's better than anything else out there from a user's point of view.
 
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