The LMS is Dead. What Will Replace It?

Every week brings another headline about college graduates struggling to find work. As far as we can tell, it will get worse. Meanwhile, colleges are also under mounting strain. As Ruth Johnston, a vice president at the National Association of College and University Business Officers, tells it:

“We knew the demographic cliff was coming. We knew state support was eroding. We knew COVID-relief funding would eventually disappear. And we knew that public perception of higher education’s value was declining. The sector’s new reality is sobering, and it requires action.”¹

To these challenges we must now add artificial intelligence.

What colleges and college graduates are about to experience is not cyclical. It’s a structural shift in the economy—one that will call into question long-standing assumptions about how universities are conceived and how they operate.

Against this backdrop, I want to examine one of the most stable and taken for granted elements of the modern university: the learning management system.

I believe its days are numbered and as educators we need to plan for what will replace it.

Learning Was Never the Problem Being Solved

The LMS sits quietly at the center of institutional life. Its importance is largely unquestioned. It organizes courses, distributes content, manages access, and records grades. As a technology, it is foundational and deeply embedded in college life. And yet, as the economic environment shifts, a question will increasingly come to the forefront:

Does the LMS contribute to learning and is it worth the cost?

The learning management was never designed to solve learning. We have known this for a long time. An LMS is a master bookkeeper, a majordomo adept at coordinating the logistics of learning: course enrollments, content distribution, access control, grades, compliance, and audit trails. It keeps the business of learning flowing.

The LMS as a Learning Accountant

The functions are necessary.

But learning itself—practice, feedback, struggle, insight—happens elsewhere.

As educators are called upon to adapt to the new economy, how will the LMS deliver the “learning goods” when it was never created to do so in the first place?

What Does an LMS Actually Cost?

The LMS is necessary, but it is not inexpensive. For a mid-sized U.S. institution (roughly 10,000 students), annual licensing fees alone typically run well into six figures. And licensing is only part of the story.

Once implementation, integrations, maintenance, training, and support are accounted for, the LMS becomes a recurring institutional commitment measured not in tens of thousands of dollars, but in hundreds of thousands. A reasonable approximation is that the total annual cost of an LMS is roughly double its licensing fee.

The table below estimates typical costs for leading LMS platforms in U.S. higher education.

Approximate annual cost of enterprise LMS platforms for a mid-sized U.S. institution (≈10,000 students), including licensing and ongoing operational costs.

These figures represent the baseline cost of operating an enterprise LMS at scale. They reflect what institutions pay simply to keep the system running—to manage courses, enrollments, grades, and compliance.

But baseline costs are not where the story ends.

Once an LMS is embedded as core infrastructure, additional expenditures begin to accumulate: advanced analytics, engagement tools, accessibility layers, retention dashboards, AI features, and other extensions positioned as necessary enhancements rather than optional extras.

It is at this point—after the baseline is established—that LMS spending quietly shifts from maintenance to expansion. And it is here that the true strategic cost of the LMS begins to emerge.

The Upsell

Once an LMS is established as core infrastructure, its role tends to expand. From the vendor’s perspective, the core LMS is a mature product. Enrollment growth has slowed. Markets are saturated. Institutions rarely switch platforms.

This is the familiar dynamic of any mature enterprise software business: when the core product stabilizes and new customers are scarce, growth shifts from selling the platform itself to selling extensions, services, and upgrades to an installed customer base.

The response is predictable: Upsell

Advanced analytics. Engagement dashboards. Retention signals. Accessibility tools. AI-powered features. Each add-on is presented as incremental, reasonable, and increasingly necessary. In isolation, many of these purchases are defensible. Together, they transform the LMS from a stable and predictable utility into a steadily expanding cost center; one that quietly competes with other institutional priorities.

This is the opportunity cost that rarely appears in budget documents or Board meetings.

Every dollar committed to LMS extensions—analytics platforms, predictive tools, engagement modules—is a dollar not spent on what actually advances learning: faculty innovation, curriculum design, program-level experimentation, and institutional capacity to shape its own tools.

The logic of upsell quietly shifts investment away from those closest to the learning process and toward technology at the periphery. It assumes that instructional insight can be delivered by external platforms, rather than developed by front-line experts—faculty and learning designers—working within specific disciplines and contexts.

Over time, institutions thus find themselves allocating a growing share of their learning budgets to a platform that, at its core, was never designed to support learning. The result is an expanding cost center focused on technology and is, at best, marginal to pedagogy.

In an era increasingly defined by AI, this tradeoff will become harder to justify. The technology tools of learning innovation are getting cheaper. The expertise required to apply them already exists—on campus, in the faculty. The question is whether institutions will continue investing in technology at the edges of learning, or begin investing more deliberately and intelligently in the people and capacities that can push learning to new frontiers.

What This Leaves Us With

The LMS is a necessary part of institutional infrastructure. The question is not whether the LMS belongs in the modern university. It does. But its baseline functions are now what economists call a commodity input: an input that is necessary for production but is widely available, undifferentiated, and offers no firm-specific advantage.

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.

If we can’t look to the LMS for learning innovation in an Age of AI, where can we turn?

That is the question I take up in Part II.

1. Ruth Johnson, “A Sobering New Reality”. The Chronicle of Higher Education. August 1, 2025. p.12