Phil Lewis from Infor
Cloud deployment of business software, including enterprise resource planning (ERP) solutions, has been steadily increasing over the last decade as enterprises recognize the benefits of always modern, highly flexible systems. CEOs report that the unusual business pressures caused by the COVID-19 pandemic helped cloud computing reach a tipping point, surpassing on-premises sales.
But what is the business case behind the move to the cloud, particularly multi-tenant versus single-tenant cloud, and how can enterprises evaluate their software strategies.
The growth of cloud – an analysis of the data
A report from Synergy Research Group found that cloud infrastructure spending surpassed on premises spending for the first time in 2020—and did so by a wide margin: “Enterprise spending on cloud infrastructure services continued to ramp up aggressively in 2020, growing by 35% to reach almost $130 billion. Meanwhile, enterprise spending on data centre hardware and software dropped by 6% to under $90 billion.”
IDC’s Jyoti Lalchandani, Group Vice President & Regional Managing Director for the Middle East, Turkey, and Africa (META), explains the shift:
“The widespread disruption caused by the global COVID-19 outbreak has reinforced the critical importance of businesses being agile enough to scale up or down with fluctuations in demand.” He adds, “A public cloud platform provides enterprises with an agile, scalable, and cost-effective IT infrastructure that supports their business processes.”
Rick Villars, Group Vice President, Worldwide Research at IDC, provides more details on the influences:
“Access to shared infrastructure, data, and application resources in public clouds played a critical role in helping organisations and individuals navigate the disruptions of the past year.” He goes on to predict the future impact of cloud computing. “In the coming years, enterprises’ ability to govern a growing portfolio of cloud services will be the foundation for introducing greater automation into business and IT processes while also becoming more digitally resilient.”
It is this ability to direct a cloud portfolio that leads toa consideration of the essential distinctions between single-tenant and multi-tenant options.
Single-tenant vs. Multi-tenant
Single-tenant architecture provides software as a single instance per each client on the software as a service (SaaS) server. Organisations can lift their legacy system with all its existing strengths and shortcomings and put it in the cloud. However, the organisation often remains responsible for several functions, such as security and back-ups.
A single-tenant architecture is typically built on a static set of servers, so as business activities increase, system performance can suffer until the system is redeployed on new servers, requiring downtime and potential business disruption.
By comparison, a multi-tenant environment gives several clients the use of the application within the same operating environment on the same hardware. This shared-cost model reduces investment and provides the benefits of using standardised processes, maintenance, and security. In addition, well-engineered cloud applications enable personalisation without compromising upgrades by using extensibility and platform tools rather than code modifications.
The difference between single-tenant and multi-tenant, however, involves more than how many companies are on a particular cloud.
The responsibilities retained by the organisations also differ. For a single-tenant deployment, the customer business is responsible for routine maintenance and back-ups and will need highly skilled technicians or the vendor provides them, resulting in higher costs.
Similarly, responsibility for upgrades rests with the customer unless they pay extra for a service contract. Postponing upgrades puts them at risk of becoming outdated and makes innovation harder.
In multi-tenant platforms, the vendor’s experts focus on maintenance for you, applying best practice standards. They provide monthly updates that are easy to consume and activated on timescales that suit the customer. Monthly updates are consumable and less disruptive and business users can be trained on new features as they are rolled out.
When it comes to redundancy and disaster recovery this kind of back-up can double single-tenant costs because a business needs duplicate hardware, replication software, and testing processes, all of which must be in sync.
In a multi-tenant arrangement, the business can have a redundant version as a back-up in case of a disaster and scale across data centres when required.
Likewise, when it comes to security, a single-tenant customer is responsible for the security of its solution in the cloud or has it outsourced at a higher cost. With a multi-tenant arrangement, security is managed by experts who stay on top of new types of threats.
When it comes to issues of growth and scaling for fluctuations of high traffic or innovative workloads, single-tenant customers must invest in extra capacity to prepare for peak periods, whether they use it or not.
By comparison, the elastic capacity of multi-tenant cloud means the resource expand automatically as needed and the business only pays for what it needs.
Multi-tenant in practice – a customer story
Z Nautic Group, well-known worldwide for producing inflatable boats, recently upgraded to Infor CloudSuite™ Equipment, a multi-tenant cloud ERP system specifically designed for equipment manufacturers, dealers, and rental companies.
Anthony Chapeltegui, Z Nautic’s IT manager, says the company had three main reasons for moving to the Infor® multi-tenant cloud, including:
Built-in last-mile functionality
“Infor was able to offer us standard business functionalities that were perfectly adapted to our equipment sales (including rental), spare parts management, procurement and stock management issues,” Chapeltegui says.
“It offered greater configuration for security, scalability, simplicity and reliability,” he adds.
“The built-in BI modules give our users control over the production of tables and reports, particularly by geographical area and by product.”
Chapeltegui concludes: “We were impressed by the user-friendly interface offered by Infor. It has won over our teams, taking them from the Stone Age to the Digital Age, with customised settings and displays to meet individual needs.”
While industry analysts sometimes squabble over the pros and cons of single-tenant versus multi-tenant and many try to sit on the fence, ultimately there is one clear best choice for organisations that want to modernise their operations: multi-tenant deployment.
This is because multi-tenant is the true cloud, designed to bring the benefits typically associated with cloud computing, such as vast storage, speed of implementation, and advanced security, into the reach of every enterprise that is set on a path of digital transformation.