Techno-Pulse started this debate, since a provider named Virtual Ark thinks otherwise. Here’s an excerpt from their CEO’s interview at Cloud Computing Journal:
Marty Gauvin: No, not at all. Virtual Ark can manage dedicated instances of the application for specific customer needs as if they were “one” application instance. In our view, the security, integration and performance requirements of our target market, large enterprise customers, are ill-suited to multi-tenant solutions. We think this is a key reason why SaaS has not been taken up more strongly by this market segment, and why many ISVs have not modified their applications to be multi-tenant. Virtual Ark sees this as an important differentiator in its value proposition.
Here was my response to this, at the Techo-Pulse site:
It may be hard to argue with Marty when he says large enterprise customers, are ill-suited to multi-tenant solutions. Large customers, usually, are too high-maintenance, both in terms of their unique requirements as well as their highly political environments. Had they been simple to deal with, consulting firms like Deloitte or PwC, that make most of their money from organizational complexities, would have gone out of business by now. No wonder, it’s hard for a vendor offering a multitenant solution to convince a large customer to buy.
So if you’re an ISV targeting large enterprise customers, an easier option may be not to be multitenant, so you can tailor for each customer’s unique needs. It’s a perfectly valid (and maybe lucrative) business model. The issue is that eventually you will turn into a services company or, in other words, most of your revenues will come from services (see my InformationWeek post Product Cloud Or Service Cloud? Know The Difference).
If you want to be a viable cloud vendor selling products (see my InformationWeek post Why Multitenancy Matters in the Cloud), you have no choice, your product must be multitenant in order to survive in the cloud world.
I think this debate about multitenancy will go on, as long as ISVs believe there are “quickie” routes to having a cloud product. I have covered this subject extensively in my new book : Force.com as your Key to the Cloud Kingdom.
However, Marty’s comments do raise other important questions: Is it possible to sell and maintain multitenant cloud products to large companies? Are there examples of companies doing that?
Would love to hear from you.
Alok Misra
Hello Alok,
This question, coming up periodically, is akin to asking moto-enthusiasts what type of ‘oil’ they should use in engines. It leads to a very long, endless debate, until folks just get tired of it:).
Is MT essential to cloud/SaaS computing? No. The topic of single- or multi-tenancy is largely an economic consideration for the service provider. The decision is going to be dependent, at least in part, on the specific service offering in question.
My own experience is as a SaaS product manager with both single and multi-tenancy solutions. The single-tenancy solution was essentially a duplicate of the multi-tenancy offering due to a very large customer’s requirements (load, SLA, etc.)
Having delivered SaaS solutions to a number of enterprise customers (in healthcare, finance, manufacturing, and others) MT was never an issue. If the topic was even raised (e.g. RFPs), it was often a checklist item. Key concerns are typically accessibility, bandwidth requirements, security, SLA, and scalability.
Multi-tenancy is generally more scalable at lower price points. And, again, depending on the solution in question, customization was not meaningfully constrained simply because our platform was MT.
To be honest, whether your offering is ST or MT should not be a key consideration in your sales effort. Do you care if the train you’re on has one or two diesel engines way up front? No, you just want to get there in a manner that meets your expectations.
As noted in the article, the real issue comes down to the effort involved as ISVs take their desktop-based solutions into the web. Many of us can recall old “Win 3.1″ apps that were migrated to NT (early predecessor to Windows 7) using the minimum effort required. Simply moving a desktop-oriented app to the web and calling it ‘SaaS’ isn’t any different.
Cheers,
JT…
PS: If you’re so inclined, I have a related post, “SaaS Is Not Multitenancy” (http://bit.ly/9XP6Lo)
Shortly after responding, one of my Twitter correspondents share this, very timely and poignant, video on what ‘cloud’ is with me.
http://www.youtube.com/watch?v=ae_DKNwK_ms
Cheers,
JT…
MT vs ST is all about economics of scale for the VENDOR and how they can translate those savings into competitive price points and innovation to their customers. The time you would spend supporting patches or connections to obscure “dot-versions” or old code; you focus on the higher-value activities. That means customers get more innovative capabilities faster, it means customers are on the best solution you have to offer, and it means that we don’t divert resources to shoring up legacy systems.
To me ST is legacy. and the FUD around security and data privacy is just that. Technical solutions abound for all of those challenges. If you are a good sized vendor, your security is probably waay better than most of customers. Your business depends on that and for your customer its not even their core competency
Kamesh: Good to hear from you and great points around MT vs. ST.
JT: Interesting video – thanks for sharing. Agree with most of your points.
Alok
A few interesting inputs here on MT vs ST
Also check one more debate at Techno-Pulse –
‘In Absence of Dedicated Privacy Law & Data Protection Law: Is India Ready for Cloud Computing?’
http://www.techno-pulse.com/2010/12/privacy-data-protection-law-india-cloud.html
My perspective is that of a cloud consultant. I have deployed several single tenant solutions and they work perfectly.
Even though I don’t agree with them, but the posts on your site are good.
Hi Alok,
Amongst all the comments here, I think kamesh said it best… MT is about economies of scale for the vendor, but everyone must keep in mind that those economies of scale trickle through to end users. From an experience standpoint, nobody will know more when a vendors application architecture starts to buckle than the users using the app. From an economics standpoint, end users should absolutely ask the MT vs ST question of all vendors they evaluate because it directly affects that vendor’s ability to innovate while staying competitive with pricing. The ideal for an end user is that a vendor will be able to discount pricing as they grow – and MT affords this. MT creates incentive for all involved.
Matt
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