Do you remember the Dot Com craze when Internet stocks were going through the roof and people would pay any price for them? That era is over - except, apparently, in the online education software world. Scores of schools continue to pay very large annual fees for enterprise-wide software licenses based on the number of students enrolled at the institution. This happens even when the school and the vendor know that getting full adoption by students and faculty is a long way off. After you pay that large fee you still need to cover all the other costs that make up your TCO.

There's no reason to overpay. Today there are reliable companies who offer a complete, stable, proven and effective solution that students and instructors enjoy, with a pricing structure that administrators can appreciate. The key to solving this pricing issue ? a fee-per-student, variable cost model. Smart vendors know that the way to an administrators heart is to only charge them for the products and services they actually use. If they use more they pay more, if they use less they pay less. Some are even willing to operate on a revenue-share basis as a way to minimize upfront investment and lower risk to their partner schools.

If you are not already online, be sure to comparison shop. For example, you may find a price difference of 50% from one LMS provider who charges annual license fees to another that uses the fee-per-student, variable cost model. On a $500,000/year software budget, that means $250,000 drops down to your bottom line every year simply by choosing the right provider. That adds up to an extra $1 million every four years.