The Hidden Tax on Learning: Why 'Per-User' Licensing is Failing Education

Mark Gash
Dec 18, 2025
3 min read

As we enter 2026, the tertiary education sector faces a "trilemma" of competing imperatives: achieving financial sustainability, meeting ambitious Net Zero targets, and delivering a world-class digital student experience. Yet, many institutions are held back by a legacy economic model that functions as a "hidden tax" on their growth: Per-User Licensing.

Here is why the old model is failing and how an infrastructure-first approach can release critical funds back to the frontline of teaching.

The Problem: The "Success Penalty"

The dominant pricing model in EdTech - used by proprietary giants and many commercial Moodle partners - is the per-user or per-seat license. On the surface, paying for the number of students you educate seems fair. In reality, it is a structural liability.

It penalises growth
In the cloud era, the marginal cost of adding one student to a VLE is effectively zero. Yet, vendors charge institutions between £8 and £20 per user. This creates a "Success Penalty": if you launch a community outreach program or a free short course, your software costs skyrocket, often making "Widening Access" initiatives financially unviable.
The "Ghost User" inefficiency
Colleges often pay for every "registered user" regardless of activity. This means paying premium software fees for alumni, deferred students, or staff on long-term leave. You are essentially paying rent on empty seats.
The "Moodle Tax"
While Moodle is open source, the "Certified Partner" ecosystem often adds a 10% royalty to your bill. This surcharge is frequently applied to hosting and support costs, meaning you are paying a software royalty on the raw electricity and hardware used to run your platform.

The Solution: Infrastructure-First Economics

The alternative is the Infrastructure-as-a-Service (IaaS) model, championed by adaptiVLE. This approach decouples cost from student headcount, aligning expenditure with actual computing consumption.

Pay for compute, not headcount
In the adaptiVLE model, you pay for the architecture (AWS cloud resources) and a fixed management fee. Whether you have 5,000 or 15,000 users matters little to the price, provided the infrastructure is optimised. This eliminates the "Success Penalty" and the 10% royalty, often saving institutions upwards of £100,000 per year.
Elastic efficiency (AWS auto-scaling)
Legacy hosting forces you to pay for servers big enough to handle your busiest day (exam week) 365 days a year. adaptiVLE uses AWS Auto-Scaling. The system monitors traffic in real-time, spinning up extra servers only when needed and spinning them down instantly when traffic drops. You stop paying for waste.
The "Green Dividend"
Sustainability is now a procurement mandate. Traditional data centers are energy-intensive. adaptiVLE leverages AWS data centers powered by 100% renewable energy and uses "Green Coding" practices to reduce CPU cycles. This turns your VLE from a carbon liability into a Scope 3 sustainability win.
Netflix-grade UX
Cost efficiency does not mean quality degradation. The savings from the infrastructure model fund the adaptiVLE Moodle Power Pack, which includes our StreamView interface. This transforms clunky course lists into a visual, tile-based experience similar to Netflix or Spotify, meeting the expectations of modern digital learners.

Stop Paying the Tax

The technology exists to solve the conflict between budget cuts and digital ambition. The procurement route is open.

adaptiVLE has been appointed to the APUC Framework (ITS1065 AP – Lot 2), allowing member institutions to engage directly without a costly tender process.

Ready to reclaim your digital budget?

Contact adaptiVLE today for a VLE Cost-Benefit Health Check. We will compare your current per-user spend against our infrastructure baseline and show you exactly how much you can save - and how much carbon you can cut - in the 2026/27 academic year.

Contact adaptiVLE via APUC or get in touch here.