Technology matters. One of the technological topcis that drives a significant misunderstanding – multi-tenant systems. If you’ve been around PLM software long enough, you’ve probably heard different opinions about cloud PLM technologies, architecture and, especially, about multi-tenant PLM.
Some people say it’s not secure and it cannot be validated. Others worry they’ll lose control of their data or won’t be able to customize the system to fit their needs. And for larger companies, there’s often a belief that multi-tenant systems are just for small teams or startups.
These concerns are common. But most of the time, they’re not based on what multi-tenant PLM actually is today — they’re based on outdated assumptions or experiences and knowledge of traditional PLM software architectures.
That’s why this discussion is important. PLM systems are evolving fast, and multi-tenant architecture is playing a big role in shaping the future. So let’s start by breaking down some of the most common myths.
What Does “Multi-Tenant” Really Mean?
In plain terms, a multi-tenant system is one where multiple customers (or “tenants”) use the same “instance” of the software, but their data is logically separated. An important elements of the multi-tenant architecture “applications”. and “data”. While application multi-tenancy can be achieved by using shared application servers with separate databases, multi-tenant data architecture allows to share data between tenants (think like sharing a spreadsheet using Google Docs)
In PLM software, multi-tenancy means you get access to a shared, cloud-based platform, but:
- Your data is logically separated and not visible to other companies.
- Your configurations are not shared and each account has its data model and settings
- The system can update and scale for everyone, without affecting your setup.
It’s a very different approach from traditional on-premise or single-tenant systems, where each customer runs their own instance, often with heavy IT involvement and long upgrade cycles.
Now let’s look at some of the most common myths — and why they don’t hold up today.
Myth #1: Multi-Tenant Systems Are Less Secure
Security is always the first concern. And rightly so, companies need to trust that their product data is protected.
The myth goes like this: “If we’re using a shared system, someone else might see our data.”
But in reality, modern multi-tenant PLM systems are designed with strict data isolation. Security technologies like encryption, identity and access management, and role-based permissions are built in from day one. These systems follow best practices that have been developed and tested across industries like banking, healthcare, and government.
The real risk comes when vendors try to “fake” multi-tenancy. For example, by stacking up virtual environments on top of an old single-tenant system and calling it “cloud.” That’s where things can go wrong, and where customers should be asking tough questions.
Bottom line: If the system is truly multi-tenant and built with proper architecture, it’s no less secure than any other well-designed cloud platform.
Myth #2: You Lose Control Over Your Data
This is another common fear — especially among teams who are used to managing their own infrastructure.
The thinking here is: “If we don’t host the database ourselves, we don’t really control our data.”
But what does “control” really mean? If you have to go through your IT team or a vendor consultant every time you want to extract or move data, do you really have control?
In a modern PLM system, control comes from accessibility. Can you:
- Export your data in useful formats?
- Share it with others?
- Use APIs to connect it to other tools?
A single-tenant system you don’t fully understand isn’t necessarily better. And just “owning the database” doesn’t help much if the data model is rigid, undocumented, or difficult to extract from.
Multi-tenant PLM platforms are often more open and transparent, with better export tools, APIs, and integration options — giving you more actual control, not less.
Myth #3: Customization Isn’t Possible
Many engineers and IT professionals have been burned by customization in the past. In older PLM systems, “customization” often meant deep changes to the database, scripts, or UI that made future upgrades difficult or impossible.
In that world, it made sense to say: “We can’t allow customization in a shared system.”
But the way we build and customize software today is different. In a modern multi-tenant system:
- You configure the system through built-in settings for each logical tenant
- Scripting and APIs not requires code changes and won’t limit the solution
- You extend it using well-documented REST APIs or GraphQL APIs.
- You build automations and integrations without touching the core system.
So yes, customization is possible — but it’s safer, more modular, and easier to maintain.
What used to be called “customization” is now just part of the platform. You can adjust workflows, data models, user permissions, and more — all without creating long-term technical debt.
Myth #4: It’s Only for Small Companies or Startups
It’s true that multi-tenant PLM systems can be very cost-effective for small companies. There’s less overhead, no servers to manage, and no complex IT setup required.
But that doesn’t mean larger companies can’t use them.
In fact, multi-tenant systems often scale better than single-tenant ones. You don’t need to spin up new infrastructure for every user or business unit — the system scales automatically. You can have hundreds or thousands of users working in parallel, with access controlled by roles, permissions, and data models.
Even more interesting, a large OEM can host its own multi-tenant PLM instance to connect its internal teams, suppliers, and contractors — all securely managed as separate tenants within the same environment. That’s a powerful way to enable the digital thread across a complex supply chain.
Myth #5: Shared Systems Are Slower
Another myth is that performance will suffer because everyone is using the same system.
This belief often comes from experience with older SQL-based systems where everything ran through a single database server. As more users came online, the system got slower.
But that’s not how modern multi-tenant systems are built.
Today’s platforms use cloud infrastructure and micro-services to scale individual services independently. If more users come online, the system just spins up more resources to handle the load. You’re not bottlenecked by one database or server.
So in many cases, a properly built multi-tenant PLM platform will perform better and stay more reliable than older single-tenant or on-premise setups.
Why Multi-Tenant Matters
Let’s answer the question why is it important. Is his “pure” technological debates? Why customers should care? Here is my take – multi-tenant PLM isn’t about cutting corners. It’s about building systems that:
- Are easier to maintain
- Scale across small companies, departments and companies
- Update continuously without disruption
- Support collaboration from anywhere
- Provide access to data when and where it’s needed
Most importantly, multi-tenant architecture supports a shared, flexible data model — which is essential if you want to connect engineering, manufacturing, and suppliers across your product lifecycle.
What is my conclusion?
PLM systems are moving from traditional single tenant platforms and IT-managed tools to cloud-based platforms that connect teams, products, and processes. This “connection” is extremely important because it represents the ability of the systems to serve larger teams of department, companies, suppliers and contractors. All together creates something I would call a “Manufacturing Graph”, similar how other platforms created and support – graphs of professional connections (LinkeIn), graph of travel and transportation (Uber), graph of hospitality services (AirBNB). I can continue the list, but I think you’ve got my idea.
And multi-tenant is a big part of how that (connection) happens. It’s not just about software delivery — it’s about enabling the digital thread, making data available in real time, and keeping systems simple and scalable.
If you’re looking to modernize your PLM strategy, don’t get stuck on old assumptions. Ask the right questions, look at the data model, and understand the architecture.
The future of PLM is more connected, more collaborative — and multi-tenant by design.
Just my thoughts…
Best, Oleg
Disclaimer: I’m the co-founder and CEO of OpenBOM, a digital-thread platform providing cloud-native collaborative and integration services between engineering tools including PDM, PLM, and ERP capabilities. With extensive experience in federated CAD-PDM and PLM architecture, I’m advocates for agile, open product models and cloud technologies in manufacturing. My opinion can be unintentionally biased
