The (Usual) Folly of Marketing Multi-Tenancy in SaaS

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Of all technical issues debated in SaaS, multi-tenancy is the best opportunity for geeks to relive the halcyon RDMBS (relational database management system) wars of the ‘80s, where magnificent technical crusades were periodically launched on behalf of dozens of various products and companies all proclaiming that only they practiced the True Relational Faith. Ah, the good old days, when you could show off your geek credentials by discussing tuples and domains instead of rows and columns. Oh, the joy of pointing out that product X adhered to only three normal relational forms, while product Y adhered to four. Sheer heaven indeed!

Unfortunately, about 99% of all this glorious techno-speak is lost on your customers. In most cases, if you tell them your product implements ‘multi-tenancy,’ they will tell you they are glad everyone pays the rent on time.

It also bears repeating that the presence, or lack of, multi-tenancy played almost no role in the ASP collapse that began in 2001 nor the SaaS revival of the 2003/2004 period. In 2006, the strong majority of SaaS firms were not implementing multi-tenancy, yet SaaS firms were growing and gaining new customers. Th e reason for the SaaS revival is the ability of the model to create new markets and reach new industry niches and sectors; how this is achieved technically is of tertiary importance to most prospective subscribers.

Should Your SaaS System Use Multi-Tenancy?

Yes. All things being equal, you should. Most SaaS companies do.

Which of the following best describes your SaaS software multi-tenancy architecture?

Which of the following best describes your SaaS software multi-tenancy architecture?

Isolated Stacks: A dedicated operating system, database, and application server for every customer on dedicated physical hardware 1%
Virtualized isolated stacks: Same as above except for the use of shared hardware via virtualization (e.g. VMWare) 4%
Multi-tenant application only: Common infrastructure and application servers, but separate databases for each customer 23%
Multi-tenant application and database: No dedicated resources, all customers share the OS, database and application server resources 54%
We offer our customers the option of an isolated stack (single instance) or a multi-tenant implementation 16%

Source: The 2013 Softletter SaaS Report

As we can see, the majority of SaaS companies now build their application on top of multi-tenanted infrastructure foundations
that encompass both applications and data. Note also that a very significant segment of the market does not provide multi-tenanted data structures. Advocates of multi-tenanted databases frequently use inappropriate ‘evangelistic’ terms about the technology, proclaiming that if your system is not fully multi-tenanted it is not ‘true’ SaaS and similar folderol.

The reality is that market conditions and business operations dictate the use and acceptance of multi-tenanting. If your customers do not want it and/or you do not need it, you will not use it and can ignore all the silliness about what is ‘True SaaS’ and what is heretical. The reasons SaaS companies do not implement the technology provide further insights into the issues surrounding multi-tenancy:

Please tell us the primary reason you have not implemented a multi-tenanted architecture in your SaaS system

Isolated Stacks: A dedicated operating system, database and application server for every customer on dedicated physical hardware 4%
Virtualized isolated stacks: Same as above except for the use of shared hardware via virtualization (e.g. VMWare) 23%
Multi-tenant application only: Common infrastructure and application servers, but separate databases for each customer 54%
Multi-tenant application and database: No dedicated resources, all customers share the OS, database and application server resources 16%
We offer our customers the option of an isolated stack (single instance) or a multi-tenant implementation 16%

Source: The 2013 Softletter SaaS Report

The Advantages of Multi-Tenancy

The advantage of multi-tenancy are many and include:

  • It is much easier to create reports of customer usage with a multi-tenanted architecture. Running reports and queries against a single data structure or ‘cube’ is much easier than trying to do it against multiple instances (copies).
  • It is easier to apply updates, patches and extensions to a unified data structure than to one scattered across hundreds or thousands of separate copies of an application and its data.
  • It is usually faster to set up and provision demo versions of a SaaS application for evaluation purposes if it is built on multi-tenancy foundation (though companies have learned to use virtualized sandboxes to speed up this process in the absence of multi-tenancy.

Integration of new features that are database dependent are easier to add to the system. For example, if a new series of event triggers are added to an SQL engine, they will become available to all subscribers at the same time.

The Disadvantages of Multi-Tenancy

Because multi-tenanted databases store datasets from different customers in a unified structure, the danger always exists that data from one customer can be exposed to another. Multi-tenant advocates tend to pooh pooh this risk; we beg to differ.

We are aware of 12 separate instances where multi-tenanted databases suffered corruption and data synchronization issues that led to subscribers to the systems having access to other subscriber’s information. Nine of these incidents were minor while three were extremely serious.Similarly, some industries reject database level multi-tenancy because of the danger of data being comingled. Industries particularly sensitive to these concerns include defense, security management, and financial management and tracking.Creating an application built on multi-tenancy traditionally takes more time, though as familiarity with the techniques involved grows, and the tools necessary to support it become ubiquitous, this issue has become less important.

Marketing Multi-Tenancy

In most cases, spending much time extolling the glories of MT to potential subscribers is a waste of precious marketing and sales bandwidth. You will normally have a limited period of time to explain to a prospective customer why they should subscribe to your system regardless of how you engage with them. If you are talking to them, deep dives into technical arcana will lead to catalepsy and the distracting sounds of customers slouching to the floor in deep states of unconsciousness. If they are reading a web page or scanning through a whitepaper they have downloaded, they will click away or scan past dense technical text they do not understand.

In terms of data handling, customers want your system to be able to:

  • Retrieve and store data quickly and accurately.
  • Backup data easily.
  • Export their data to a destination of their choosing in a useable and ‘normalizable’ format.
  • Completely erase their data from your system if the subscription is terminated.

If your system application provides the above, they will be satisfied with your technology.

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