Multi-Tenancy and Its Benefits
Multi-tenancy means that the SaaS vendor provides a single version of its software for all its customers. This differs from a single-tenant hosted solution where the application is housed on a vendor’s server but the codebase is unique for each customer.
So, how does multi-tenancy work? Although all users of the software access the same foundational components, the data and configurations that are specific to a customer are stored in a separate and secure container. Users can access all the capabilities of the software, but what isn’t shared is their data. The advantages of a multi-tenancy SaaS over a third-party-hosted, single-tenancy application include these:
Lower costs through economies of scale: With a single-tenancy-hosted solution, SaaS vendors must build out their data center to accommodate new customers. In contrast, in a multi-tenant environment, new users get access to the same basic software, so scaling has far fewer infrastructure implications for vendors (depending on the size of the application and the amount of infrastructure required).
Shared infrastructure leads to lower costs: SaaS allows companies of all sizes to share infrastructure and data center operational costs. Users don’t need to add applications and more hardware to their data centers, and some small- to medium-sized businesses don’t even need data centers if they utilize SaaS.
Ongoing maintenance and updates: End users don’t need to pay costly maintenance fees in order to keep their software up to date. New features and updates are included with a SaaS subscription and are rolled out by the vendor.
Configuration can be done while leaving the underlying codebase unchanged: Although on-premises applications and single-tenant-hosted solutions are often customized, this endeavor is costly and requires changes to an application’s code. Additionally, this customization can make upgrades time-consuming, because an upgrade might not be compatible with your customization. Most multi-tenant SaaS solutions are designed to be highly configurable so that businesses can make the application perform the way they want, without changing the underlying code or data structure. Because the code is unchanged, upgrades can be performed easily.
Vendors have a vested interest in making sure everything runs smoothly: Multi-tenant SaaS providers have, in a sense, all their eggs in one basket. Although this sounds dangerous, it’s a benefit to end users. In a single-tenant environment, if there is a service disruption, it may affect only one customer, meaning that the vendor might be slow to respond and fail to take the necessary steps to ensure the problem doesn’t reoccur. In contrast, with a multi-tenant solution, a slight glitch could affect all a vendor’s customers. It is, therefore, imperative that SaaS vendors invest significant amounts of money and effort into ensuring uptime, continuity, and performance.