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