5 Dimensions to Compare Single Tenant vs Multi-Tenant Cloud PLM Models

5 Dimensions to Compare Single Tenant vs Multi-Tenant Cloud PLM Models

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The discussion about single-tenant vs multi-tenant cloud PLM models is getting more interesting every day. And it is not only because it can create a major differentiator for systems that the PLM industry didn’t see since inventing parametric feature modelers and bringing PCs and Windows machines into the professional business. Multi-tenant can become a leapfrog strategy for companies to gain momentum and market share in the coming decade of manufacturing business development similar to what we’ve seen happen in the past with global technology companies in the web and e-commerce industry.

I came across SharePLM articles describing and comparing single-tenant hosting and multi-tenant hosting. While it offered a great comparison mode (single-family house vs multi-family building), it seems to be very simplified and can provide misleading guidance in my view. It is also incomplete because it covers only one dimension – shared resources. Also, it doesn’t give a different business perspective on the problem. If I will use a single-family house vs apartment building analogy, the business case can be different. I might prefer a single-family house for living, but when I’m coming to vacation or a business conference, I’d prefer to share the facility for convenience or to make business meetings. Single-family houses seem to be “secured” but the cost of hiring security services can be too high to afford to achieve the same security level as the hotel or business facility. So, as you can see, it is very easy to mislead by examples. So, which one do you want? it depends…

In my article today, I want to suggest multiple dimensions of comparison – technology, architecture, business, value for customers, and how both can help manufacturing companies in the next decade of developing manufacturing business. I also want to explain the current momentum of PLM vendors and why some of the vendors’ marketing can be misleading today when it comes to the comparison of single vs multi-tenant models.

1- Technology and Architecture

A single-tenant model is a technology that dedicates a complete PLM system setup for a single company. On-premise setups are usually single-tenant because they are rarely used by multiple companies. The first experiments of ASP (application service providers) back in the 1990s were hosting systems for customers and providing them with access. The multi-tenant system uses shared resources to optimize the computing usage and most importantly to provide new features – data sharing, intelligence, and many others that cannot be achieved using a single tenant.

2- Technical Misconceptions Comparing Single-Tenant vs Multi-Tenant Models

The biggest mistake you can make is if you will try to compare by assuming how you can take a regular system built for on-premise use and host it for multiple companies to share as “multi-tenant”. It is like taking a race sports car into an off-road experience. That car was designed for a track and it doesn’t have all features needed for off-road driving. The same for multi-tenancy. The systems developed for multi-tenancy have designed with the tenancy in mind – the databases are capable to manage data of multiple customers, the identification system is global and can allow sharing data between tenants, there is special tenant management software, these systems are capable of autoscale and do many other things old systems cannot. So, don’t try to compare apples to oranges when it comes to judging what problems a single tenant system will have when hosted in a multi-tenant environment.

3- Customers, Functions and Business Models

When it comes to comparing the functionality of both models, you can easily get confused by the difference in paradigms. The existing PLM paradigm of a single source of truth puts a huge focus on a company data organization while ignoring business relationships between customers. Think about M&A activities. spin-offs, situations when manufacturing companies need to create a subsidiary in a different country or joint venture, contractor, and suppliers activities. All these things are extended to a single-tenant model and existing PLM systems are not providing a great solution to solve them.

From a business standpoint, the cost of single-tenant systems is much higher because of the dedicated resources and the amount of management that needs to be done for setup, on-going maintenance, and future upgrades. A system for a small company and individual contractors cannot be compared to the hosted systems for OEM or Tier1 manufacturing company. A multi-tenant system gives an additional value, but these systems are not well developed (yet) now compared to their single-tenant predecessors.

4- PLM Vendors

The reality is that established PLM business today is represented by single-tenant on-premise systems provided by a few vendors – DS, Oracle, PTC, SAP, and Siemens.

The idea of discontinuing existing systems and moving to development of multi-tenant generation is a hard one. There are two companies that kind of embarked into this journey – Oracle and PTC. Dassault 3DEXPERIENCE platform combines multiple services visually, but the data is tenant disconnected. Also, DS latest acquisition of NuoDB indicates that some infrastructure changes can change the single-tenant architecture of MatrixOne engine behind 3DX. Siemens Industrial Software has one of the biggest market share presence in cPDM and Teamcenter X seems to be sitting on both chairs of on-prem and hosted models. A few Cloud/SaaS PLM companies here to pay attention – Arena Solutions, OpenBOM, Propel, Upchain.

5- Future of Manufacturing – Remote and Connected.

The future looks more remote and connected to manufacturing companies. The last ten months of COVID created a huge push for manufacturing companies to rethink their strategies for remote work, reducing supply chain risks and optimizing the work between companies, joint ventures, suppliers, and contractors. To realize the potential of distributed work, manufacturing companies will need to have new technologies combining new manufacturing methods, 3D printing, IoT, connected systems, and commerce, multi-tenant architecture can offer some unique value.

What is my conclusion?

Single-tenant on-premise systems are mature and provide tons of business values. Existing PLM vendors have a huge investment in existing single-tenant systems. Multi-tenant architecture has a lot of potentials, but it still needs more time to come to maturity. As a customer, you should be looking at how the system fits your business needs and it is a combination of function, cost, future upgrades, ease of use, and simplicity. Keep in mind the current PLM architecture is mature, but they can be a dead-end in the future unless your trust is in a big vendor to evolve. It is a multi-factor decision. It is a time for PLM architects and business people to learn and understand the difference. Just my thoughts…

Best, Oleg

Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network-based platform that manages product data and connects manufacturers and their supply chain networks. My opinion can be unintentionally biased.


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