How to ask right questions about single vs multi-tenant PLM cloud

One of the most frequent debates in cloud (or SaaS) software are debates about tenancy. Or how you can often hear it – multi-tenant vs single-tenant solution. In the past I’ve been writing about multi-tenant vs single-tenant cloud solutions. You can get my old article from 2012 here – Cloud PLM. What do you need to know about multi-tenancy.

The topic of single-vs-multi tenancy is described in many article online. It is is not very much specific for PLM. Here is one possible resource blog.  But, you can find others.

Earlier today, I was caught by SharePLM article with example the same kind of debates – Single-tenant vs multi-tenant hosting. The article is written by Terry Low, CTO of software outfit Upchain providing PLM solutions.

In my view, article doesn’t represent clear picture for both sides of the story – PLM vendor and customer. The article is sort of mixing it all together and at the end saying – Like most tech, it’s less about choosing the best solution out of multi-tenant and single-tenant hosting, and more about choosing the product that’s right for you.. But what is good for me?

Read the article and draw your conclusion. Here a short snippet to provide a summary:

Multi-tenant and single-tenant hosting are two ways SaaS companies provide their services. Multi-tenant hosting is when many clients exist on the same software instance, sharing infrastructure, database, and/or an application server. It’s less expensive but comes with risk. Single-tenant is when a tenant doesn’t share anything. It’s more expensive and requires much more administration because it requires having a full software stack running for every client.

In my view, the most important question in single vs multi-level debates is about to understand how both vendor and customer can benefit from one or another model. So… what is good for me, requires clarification – who is me? PLM vendor or customer? And how it will work together.

PLM customer

Functions, cost, business problem solving, return on investments. These are usually things that from my experience are on the top of the list for customers when making assessment of a possible solution. A specific “hosting” model won’t give you automatically answers on these questions. It is easy to get deep into tech and start debating what security model is better, but that would be red-herring type of discussion. At the same time, there are functional aspects of application that cannot be achieved with single or multi-tenant model. Single tenancy most probably isolate data, but also create complexity for data exchange. Business model of multi-tenant solution cab be different from a single tenant and provide huge benefit to users in terms of maintenance, support and operation. If every customer has its own data in the cloud, vendor won’t have much efficiency vs on premise solution and you will feel it in the level support, maintenance and cost.

PLM Vendor

Cost, infrastructure, maintenance, scale, functions. As a vendor you think about these things first and multi-tenancy can give you lot of advantages. Security? Unless, you’re dealing with some very specific type of customers, multi-tenancy can give you only advantage. Multi-tenancy can limit you, but most enable new horizons. Web application developed from scratch are very rarely single tenant. This is just a reality of web development. The debate about tenancy usually only comes with legacy software vendor is moving to SaaS and trying to justify cutting corner. Multi-tenancy is enabler for new business models, features, functions, scale, efficiency, support and many other aspects. If company is opting for such list of advantages, it must be a reason for that. And from my experience, it is legacy product hidden behind. Security is usually red-herring topic.

From a pure technology standpoint, there is no single reason why single tenant solution can be better for SaaS apps. Here is a great document summarizing  – 5 Reasons Why You Should Choose Multi-Tenant Architecture For Your SaaS Application. I cannot write it better.

The arguments about security, regulation and compliancy are correct. But, this is just a matter of time. Because all cloud providers want to get into business with large companies. Here is just one example related to AWS and ITAR certification.

What is my conclusion? Mature PLM vendors with existing product and existing functionality will keep using single tenant technology. This is just a reality. It is okay and you cannot blame them for doing so. It will take time for them to re-architecture solution and bring multi-level advantages. They might acquire technologies or develop it by themselves. For a new company opting to forgo multi-tenancy might not reach the success of vendors such as Facebook, Github, Salesforce, NetSuite and others. It will happen mostly because they are tied to single-tenancy. They will not achieve level of efficiency like multi tenant.  So, each vendor will follow the path. But most importantly, end users will get a value from new PLM product developing multi-tenant technology since it will bring efficiency, low cost and new features. So, ask the right questions. Technical discussion about single tenancy vs multi-tenancy in 2018 is missing the point. Just my thoughts…

Best, Oleg

Want to learn more about PLM? Check out my new PLM Book website.

Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased.