The Role of Multitenancy in the Cloud

The debate over whether or not multitenancy is a prerequisite for cloud computing wages on. While those pondering the use of cloud apps might think they are removed from this debate, they might want to think again, because multitenancy is the clearest path to getting more from a cloud app while spending less.

Those in the multitenancy camp, so to say, point out that there is only a slight only difference between two subscription-based cloud apps is that one is multitenant and the other is single-tenant. The multitenant option will offer more value over time while lowering a customer’s costs and the higher degree of multitenancy—i.e. the more a cloud provider’s infrastructure and resources are shared—the lower the customer cost.

At the root of the debate is revenue and cost economics of cloud services. Revenues for most cloud app providers come from selling monthly or annual per-seat subscriptions. These bring in just a portion of the annual revenue that would be generated by an on-premise software license with comparable functionality. The challenge for selling software subscriptions comes from reducing operating costs to be able to manage with less. If this is not achieved, the provider may have to do more than an on-premise vendor does—like run multiple infrastructures, maintain multiple versions, perform upgrades and maintain customer-specific code—with less money. The answer to this conundrum is multitenancy. Multitenancy extends the cost of infrastructure and labor across the customer base. Customers sharing resources down to the database schema is perfect for scaling.

As the provider adds customers, and those customers benefit from this scaling up, the economies of scale improve. The cloud app provider is able to grow and innovate more as costs decrease and in turn value increases. Over time customers can expect to see more value (like in the form of increased functionality), even if costs don’t lower. For more information of Multitenancy, visit Nubifer.com.

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