The hype around cloud computing has been going on long enough that even the derogatory term for it -- cloud washing -- is several years old.

Yet, with companies left and right fabricating their own cloud supremacy -- what we’ve termed the False Dawn of the Fake Cloud  here before -- buyers are left to sort through the fog. That’s why explaining the merits of multi-tenancy matter.

Economies of Scale

Running business applications in a single instance, whether it’s on-premise, with a hosting provider or with an Infrastructure as a Service (IaaS) provider such as Amazon, does not provide the economies of scale of a multi-tenant solution. A hosted provider, aka the old Application Service Provider (ASP), model may save a company the hassle of managing hardware. Using IaaS for applications may allow companies to tap into shared commodity hardware. But running all customers on one instance of software and shared hardware means big savings. Some vendors might suggest that the advantage is only to the cloud provider, but be sure that savings are passed along to the customer. Just do a little price comparison and you’ll find out for yourself.

No More Version Lock

Cloud customers using a multi-tenant solution don’t have to worry about being stuck four versions behind the way they do with hosted software.  Ask customers whether they want the latest version of software and the answer is almost always yes. Unfortunately, the follow-up questions are how much does it cost and how disruptive will it be? Customers of multi-tenant solutions don’t need to worry about either one. Upgrades come as part of the subscription service and enhancements are iterative and gradual, what many end users have come to expect based on their experiences with consumer applications.

Investing in the future

Furthermore, multi-tenancy means the money being spent on applications isn’t just maintaining the status quo. Now, the money spent on a vendor like NetSuite is no longer being spent simply on what you have. You’re spending on the newest and latest versus just keeping the lights on. It’s benefiting from all the enhancements made by the vendor as opposed to waiting for it.

Ask the question

Multi-tenancy is so important that when software buyers are evaluating cloud software, whether the solution is multi-tenant or not (a true cloud solution or a hosted solution) is one of the top six questions to ask.

They are:

  1. What is the vendor’s viability, cloud track record?
  2. What are cloud SLA commitments, transparency?
  3. Does the cloud vendor have the right certifications?
  4. Is it hosted or a true cloud solution?
  5. Has the provider achieved scale?
  6. Can it be customized, extended, and integrated?

-Vishrut Parikh, Director, Product Marketing at NetSuite