Peter, this is not true of Moodle. There is a community + premium model, just not by that name.
The free version is called Moodle. I call it "core Moodle" or "OOTB Moodle". The Premium versions include ELIS, Joule and Totara.
If you want proper outcomes, enhanced tracking, member management, learning pathway management, decent reports, across Moodle grade reporting, enhanced video deployment, better navigation, happier administrators (etc) you can buy these.
- http://www.totaralms.com/feature-a-benefits
- http://rlcommunity.remote-learner.net/
- http://www.moodlerooms.com/meet-joule
There are more that are not so well known.
With Moodle + Plugins, there is another option. Some Moodle Partners (and other providers) make their plugins available, others keep them for their hosted servers.
There are some distributions. CLAMP is one, (where there is a paid closed community around it) and Moodle in Schools (totally free download) is another (where there is basically no community/governance arrangement)
None of this worries me. It's not BAD or GOOD it just IS.
Your loss leader model is correct: but it is not the only option. Moodle as I define it above is not a Loss leader, it is the flagship.
I'll respond to Tim and Colin in due course: but my opinion is this, that Moodle out of the box is not good enough to fulfil basic needs, except for very small stable enrolment courses, or very free and open settings.
Core themes lack basic features that could be added in a few hours, formats are inadequate for the distance, reporting is too basic to be of any use, member management is poor, bulk course creation/delete is difficult, management of diskspace eg private files is non-existant, Moodle forums are poorly featured, scroll of death, navigation scroll of death etc.
I'm reluctant to work with clients now if they won't pay to have a few themes and plugins installed, and I won't support hosters who don't do this, and it took me 18 months to find suitable partners. Most of these issues are sorted well and good in the Moodle "preimum" installs (Like have you seen the doozy cool stuff in Totara?) They can be sorted with a few plugins, to a certain extent. This is my conclusion after 5 years of trying to get some basics into Moodle core so I can recommend Moodle core, and basically failing on most counts.
And then working for clients or chit-chatting to friends who say "can I bulk create 30 courses?". I want to say 'Yes, use this plugin'. Or Navigation sucks, and I say "Use the course menu plugin". Or navigation menu sucks, and I say "Use Decaf_green". Or can I find a report that says who has not posted? ues, with tis addon. This is the community + do it yourself premium you may be looking at Peter.
Moodle sometimes is too prone to say "Fix the user". I'm not sure it is a good listener (in general, although I am sometimes suprised as http://tracker.moodle.org/browse/MDL-33688) and I'm not sure there is any user testing as has been described here. I like the forums with coders and non-coders in, but the communication barrier is still great. Ungratefulness and parsimoniousness on one side and "so it's open source, code it yourself" or "fix the user" on the other side. A suprising amount happens thought with Moodle (glass half full view) and a lot doesn't happen that in another setting (eg Edmodo, EDU 2.0 or canvas) is a no-brainer (glass half empty view)
But basically I am here, because of a range of trajectories. At the moment, most of my Moodle work I do Pro Bono. The latest workshops I've run I've set aside the registration fees to MiS development. (Not getting much!!)
We shall see. Tim's elephant analogy: there are easy and hard ways to eat an elephant. A bit more planning and prioritising, user testing (what's the quickest way to eat this limb?) and dialogue (I'll stay out of your way while you are cooking up a rib) could make the process more efficient, quicker, more fun and more satisfying.
Gee. Longer than I meant to post.
-Derek