Single-Tenant or Multi-tenant Cloud Services? A Small Business Dilemma

Posted by on January 27, 2014 in Business Software, Business Technology [ 0 Comments ]

Single-Tenant or Multi-tenant Cloud Services?Companies are jumping on cloud services in a big way. A September 2013 report from StateTech shows a staggering $131 billion estimated for total cloud procurement by the end of the year- with 84% of surveyed CIOs saving money with cloud contracts.

Using these kinds of remotely delivered services helps companies to get around hardware and installation costs while better security with less in-house effort, and also provides more flexible and versatile models for processes.

Typically, individual client companies discuss cloud services with vendors by looking at detailed service-level agreements or SLAs. One of the major concerns in assessing and choosing services is the question of whether companies benefit by participating in multi-tenant cloud models, or whether they need a single client setup.

Multi-tenant Cloud Models

A multi-tenant cloud solution is one where a single provider serves multiple customers with the same hardware and infrastructure. One way to describe these kinds of systems is that services are shared or ‘blended’ within a single network.

Related: 10 Cloud Storage Features to Improve Your Business

Experts often tout the benefits of multi-tenant cloud services. Multi-tenant cloud setups allow providers to use the principle of resource pooling to deliver more scalable solutions. Other benefits of multi-tenant include:

  • lower infrastructure costs for the vendor
  • batch communications for maintenance and updates
  • one dedicated team for a particular network

All of these allow the cloud provider to pass on lower costs to customers, and to provide better options for changing delivery (or volume) of services. Many of these multi-tenant systems also represent popular choices for modern upgrades from “legacy” systems: an article in APMDigest cites numbers from THINKStrategies, where almost half of 341 surveyed IT pros reported employer systems over five years old, making newer cloud systems very desirable to a large corporate audience.

Single Tenant Cloud

In comparison to the benefits of multi-tenant cloud structures, which are obvious to providers and a wide range of consultants, many of the benefits of single tenant cloud services seem pretty illusory.

More than a few experts have correctly characterized one of the biggest benefits of single tenant cloud as a perception by customers that they have better security, because they have dedicated systems.

Related: Is Moving to the Cloud Really a Good Idea?

Although it may be a fallacy to think that single tenant offers better security, in some cases, it may be true that a single tenant model will give a single client more access to the vendor’s IT people. This makes sense when you think about cloud services as similar to any other kind of service. For any service vendor, a growing demand for client-to-vendor communications shrinks access for the individual customer.

In cases where money is no object, single tenant may also be useful, because the sole client of a provider can more easily dictate terms and desired upgrades to services. However, there is a kind of Greek chorus surrounding multi-tenant that makes the shared approach a much more championed form of cloud services. Most businesses that are focused on the bottom line and balancing revenues with expenses will see multi-tenant benefits—and in competitive industries, that’s at least 99.9% of all businesses.

Related: Is it Time to Move Your Phone System to the Cloud?

Multi-tenant versus single tenant cloud architecture isn’t the only metric that executives or others can look at around cloud service models. There’s a kind of basic distinction between two models: one (multi-tenant) is put forward as the way of the future, and the other (single tenant) is widely regarded as a legacy system that will soon be consigned to the dustbin of history – but that’s not the whole picture, and it’s still good to assess a particular need on a case by case basis.

(image via freedigitalphotos.net)


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