It is inevitable for software vendors to keep up pace with the competition in the SaaS (Software as a Service) domain. It is, hence, a high time for them to not only bring offerings prematurely to the markets but also adopt the most cost-effective approach for themselves while developing SaaS applications.
A multi-tenant architecture can prove strikingly well in this scenario. There are a host of other benefits that entail the selection of a multi-tenant architecture in a SaaS application. Before introducing you to those benefits, let us first take you through a comparative analysis of single-tenant and multi-tenant architectures in SaaS applications.
A Multi-Tenant SaaS Application involves a centralized administration to maintain a common code based application and run common instance(s) of application for multiple tenants (organizations). This process ensures that the confidential data for each tenant is secured from any others tenant.
Apartments are a perfect example of a multi-tenant architecture. Apartment have a centralized administration for security on main gate, electricity, water and other facilities. These facilities are owned by apartment owners.
A good example of a multi-tenant architecture can be seen in the case of Salesforce.com. They have been effectively serving several clients (tenants) using the same architecture.
Single Tenant Vs Multi-Tenant
Single Tenant – A single instance of the software and all of the supporting infrastructure serve a single customer. With single tenancy, each customer has his or her own independent database and instance of the software. With this option, there’s essentially no sharing going on.
Multi-Tenant – Multi-tenancy means that a single instance of the software and all of the supporting infrastructure serves multiple customers. Each customer shares the software application and also shares a single database. The data is tagged in the database as belonging to one customer or another, and the software is smart enough to know who the data belongs to.
Microsoft explains the three approaches to multi-tenant architecture in terms of databases vendors create for different tenants. They can be separate, shared and even both depending upon requirements.
Now that you have got a fair idea on the differences between single and multi-tenant architectures take a look at the top benefits of multi-tenant architecture in SaaS applications.
1. It Reduces Investment Costs In The Long-Run
A prime benefit of using a multi-tenant architecture is that it brings down investments in the long-run. When compared with a single-tenant architecture, a multi-tenant SaaS application costs several notches lesser. This happens because multi-tenancy enables the sharing of application, database and resources. Every tenant uses same applications and database thereby bringing down the total cost of development and maintenance for all tenants.
By using multi-tenant application, the vendor is able to ensure the lowest cost of solution delivery because no new software resources, code changes or database setup are required for each incremental tenant. Hence, the cost of on-boarding a new tenant begins to approach zero at full scale, resulting in ever-increasing marginal revenue associated with each new customer.
2. On-boarding A New Client Gets Very Convenient
Customer on-boarding has become a prime focus for vendors since poor on-boarding experiences can directly affect the growth prospects for any vendor. Hence, bringing customers and users on-board for using the product is a crucial task. It becomes important to lay emphasis on the self-sign up process.
In a multi-tenant application, the process of sign is automated. The configuration of sub-domain/domain is also automated. This application also automatically performs tasks like setup of default data for clients and configuring of application.
To have a better understanding on user-centered approach in product development, you can read our blog post Why Digital Product Development Must Rely Upon a User-Centered Design Approach.
3. Maintaining Applications Gets Expedient As All Clients Use Same Application
The modules included in a multi-tenant application are highly configurable. This enables each tenant to use application in the most convenient manner and without changing the underlying code. Even the data structure does not need to undergo any change as the code is shared and remains common.
The maintenance costs, especially for updates, gets shared by all the tenants as they use the code from the same pool. This brings down the overall cost of maintenance for each tenant.
4. Enables Application To Hold Billions Of Tenants
Unlike in a single tenant solution, a vendor does not need to build a new and unique data center for every new tenant when using a multi-tenant architecture. In multi-tenant applications, the tenants use a common infrastructure. There is no need for raising the number of data centers for the individual tenants. Hence, scaling has very less implications for vendors. This, however, depends on the size of the application and the volume of infrastructure required.
5. Maximized Usage Of Resources
The scope for optimum utilization of resources is way too higher in a multi-tenant application as compared to that in a single-tenant application. Since multiple tenants use the same infrastructure and resources, the utilization gets automatically more optimum and maintenance gains momentum. Also, if at any given point of time, a tenant does not utilize a specific resources, it can used by another tenant. This makes utility of all resources commensurate with each other. The machine is in motion regularly.
A multi-tenant architecture brings long-term benefits to the SaaS application vendors both in terms of product maintenance, development and investments. However, it isn’t a very easy undertaking either. It entails a few challenges which you need to identify and win in the long-run. Some of the challenges include increased load of development efforts and data privacy. These challenges can be overcome by Data Identification, creation of Database Architecture and designing a thorough application architecture.
If you are looking for any help on building any digital solution for better customer or employee engagement, please contact us at email@example.com.