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Can single-tenant work for enterprise SaaS?

Posted by Matt Tucker on Apr 14, 2009 2:18:44 AM

I spend a lot of time working on Jive's enterprise SaaS offerings. There's one question in particular we've invested quite a bit of engineering time in answering recently -- is it possible to leverage the cloud to build a scalable SaaS solution using a single tenant architecture? It's not so long ago that it felt embarrassing to say the words "Saas" and " single-tenant" in the same sentence. For years, it's been an industry mantra that it's  simply impossible to have a scalable Saas business without multi-tenancy. But recent technology advances have eroded the multi-tenant advantage. And especially for the enterprise, there are important reasons why single-tenancy can actually be a better solution. I don't intend to start a flame-war over which approach is ultimately better, but I offer the top reasons my single-tenant shame is passing:

 

  1. Cloud computing is changing the game. Cloud computing is anchored on virtuatlization and new levels of automation via api-based resource allocation. It's now possible to approach multi-tenant level cost efficiency with a single-tenant application. Although the cloud isn't ready for all Enterprise use-cases (due to security and compliance concerns), cloud computing is maturing very quickly.

  2. Data isolation. Most multi-tenant applications use a single database to store all customer data. That means application bugs can put your data at risk by making it visible to other companies in the same SaaS environment. We use a separate database for each customer in addition to all the advanced data security features baked into the product, which provides much better isolation for critical data.

  3. Migration. SaaS offers fast setup and a fantastic TCO. But current enterprise security and compliance polices around storing corporate data in the cloud can be too high of a hurdle to overcome as product usage expands from a single department to the whole organization. Because of our single-tenant architecture, we're able to offer the same product via SaaS or on-premise. Plus we make it really easy to move from one environment to the other. We believe it's the pragmatic approach, and the one best suited for enterprise.

  4. Customization. One of our key selling points for public-facing communities is the ability to closely match an existing site's look and feel. Most multi-tenant applications end up looking cookie-cutter with just a few color changes. Jive offers much deeper levels of flexibility.

 

In an upcoming blog entry, I'll share further details about how we're leveraging the cloud including how we're using XMPP.

4,997 Views Tags: saas, cloud, enterprise_cloud, cloud_computing


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Apr 14, 2009 10:43 AM Guest Brett Mason  says:

Matt, you mention several keys to single-tenancy.  I agree with them, but feel you have not stressed the greatest value of platform scalability.

 

One facscinating trait of cloud computing is scalability, whether hosted in-premise or remotely.  Ten years ago the hardware infrastructure was not extensible, requiring careful architecture and maximization of requirements to ensure the platform was not outgrown.  With Virtual architectures, the application can be launched on platform, and the platform then extended and enhanced as needs grow.  (Must Love Virtualization!)

 

Scalability eases the load on Product Management, allowing roadmap development of features and benefits, no longer constrained by physical host limitations...  Sure wish Portland was closer to Cedar Rapids!

Apr 14, 2009 2:38 PM Guest Rhett Glauser  says:

I completely agree with this post. Multi-tenancy was an early SaaS differentiator championed by Salesforce.com that had more to do with vendor scale and efficiency than providing real customer benefit. Outside of cost containment for the vendor and trickle-down lower prices for the customer, I'd like to know what benefits end users receive from multi-tenant SaaS?

 

As mentioned in this post, virtualization and data center automation, which are key components of the cloud, obviate the need for multi-tenant SaaS architecture. In addition to the single-tenant benefits listed above, customization and integration is essential to the success of any enterprise application and is second nature for a single-tenant SaaS application.

 

Service-now.com is an example of a modern, single-tenant SaaS application that has been very successful selling directly to the enterprise buyer. The company has been in business for about four years, is cash-flow positive, will soon be profitable and is growing at triple-digit percentages.

 

Rhett

Apr 14, 2009 4:58 PM Guest Pete  says:

I have been selling enterprise SaaS for about 9 years.  For most large enterprises, single tenancy SaaS is the only option.  Not only for the security and compliance policies you mention, but also for the control in determining when upgrades will happen.  A large enterprise needs more control over upgrade timing for training, change management and possibly integration.

Apr 14, 2009 5:55 PM Guest Michael Knighten  says:

Matt, great post, totally agree with you. FYI, I referenced your post in a related blog at our site (Atlassian) - I think we've gone thru a very similar evolution in perspective re single- vs multi-tenancy over the last couple of years.

 

http://blogs.atlassian.com/news/2009/04/when_it_comes_t.html

Apr 15, 2009 3:32 AM Guest Michael Kimber  says:

Thanks for this article, you might just have saved us a lot of development effort!

Apr 15, 2009 4:50 PM Guest mmarfise  says:

I think this is right on.   We have been running a single tenant SaaS architecture for years and the big advantage we had was that we passed many Enterprise security audits because the data was segmented.    More Enterprises will move to SaaS with this model.  The trick with this model is  automating the provisioning and maintenance of the database schemas/instances.  We uses a third party hosting facility and needed to put in place tools that would easily allow them to spin up a site.  Unlike adding a site in a multi-tenant world where you just need to add a record to a db,  there is IT related work necessary, nothing that can't be automated.