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4 Reasons to Add Multitenancy to Proprietary Software

tyler boykinBy: Tyler Boykin

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Software is becoming increasingly cloud-based. Cloud computing technology is being used to deliver IT assets via the Internet with pay-per-use pricing systems. The most widely used software delivery model in the cloud computing market is software as a service (SaaS). With this model, applications are hosted in the cloud and made available to customers online, typically with a subscription agreement.

An important part of building a SaaS application is choosing the best-fitting tenancy model. This is critical for more than functionality. This choice affects other impactful areas such as operational complexity, scale, and per-tenant costs. Multi-tenant architecture is common for SaaS applications, providing a single instance of the software and a shared infrastructure supporting multiple users, or “tenants.”

Multitenancy differs from single-tenancy, which provides each user with his or her own dedicated instance of the software. In single-tenancy, there is little or no sharing of infrastructure and resources. This model requires managing more servers and databases, which proves to be more costly than the alternative.

Each tenancy model has its advantages and challenges. But, with all factors considered, software companies could capitalize on substantial benefits and revenue by adding multitenancy to their proprietary single-tenant software with the help of an expert-level software development company. This multi-tenant software could be monetized and supplied for the use of other businesses.

Advantages and Challenges of Multi-Tenant Software

Multitenancy is a significant component of cloud computing and plays a key role in the profitability of SaaS. The multi-tenant application model has advantages and challenges that should be considered before setup. Multitenancy has a greater computing capacity potential than single-tenancy and is most useful for providing access to a single software service for multiple companies.

Advantages

Challenges

With the help of a reliable software development company, software providers could experience the advantages of a multi-tenant application while mitigating the challenges. The complexity alone would call for expert assistance.

The security challenges that come with multitenancy could be addressed through implementation of measures such as data loss prevention, cloud governance, and encryption, all within the expertise of software engineers experienced with cloud-based technologies and SaaS programming.

Reasons to Move to Multitenancy

Flexible Monetization

A software proprietor offering a multi-tenant application could choose a billing model to monetize the software by charging tenants. There are various subscription-based models to choose from, including flat-rate, tiered, usage-based, or freemium models.

A solid pricing model can ensure profitability as new features are added and more tenants are brought on board. For example, tiered pricing can be very effective due to the opportunity it presents for upselling customers with new features being rolled out.

Flat-rate pricing is easy to implement and sell, as it doesn't require metering tenants' usage. The pricing is also easy to understand. Despite the pricing model that is selected, monitoring and tracking the software-based activities of tenants and the resulting costs would still be important when trying to maintain profitability.

Easy Scalability

Multi-tenant applications are designed for businesses of all sizes, and those applications have a lot of flexibility to meet different demands. One of the leading benefits of multitenancy is easy scalability. In a single-tenant system, scaling is harder because it requires a lot of customer intervention.

Managing resources to support a high volume of tenants on one application instance is easier than the effort required to support numerous instances of one application. Having one codebase instead of multiple codebases makes upgrade implementation easier, reducing cost and risk throughout the cycle of adoption for a SaaS.

Automated Customer Onboarding

The onboarding of new clients has presented a significant challenge for software proprietors. A negative onboarding experience can leave a poor impression and cause the loss of prospects, so a smooth onboarding process is critical.

Multi-tenant systems not only make it easier to add new customers thanks to automated sign-up and configuration, but the process is much less costly because adding new customers only incurs an incremental cost. This differs from the more expensive, time-consuming onboarding process of a single-tenant system, which can involve a multitude of changes concerning setup, hardware, configuration, and other elements.

Effortless Maintenance and Upgrades

Software proprietors can launch new features and updates as included with the subscriptions they offer. In multi-tenant systems, it’s possible to provide continuous software updates and patches, concurrently introduced to all users for immediate access.

With a multi-tenant model, all customers have the most up-to-date standardized software version, removing the potential for issues with version control. Software providers can also ensure that the software upgrades aren’t disruptive. In addition, customers can have their customizations transitioned to the new software version.

Multi-Tenant Application Development

Tenancy models make a crucial difference in designing cloud-based SaaS applications. Beyond functionality, the choice of tenancy model affects significant factors such as allocation of IT resources, costs incurred, and delivery of service and pricing.

The multi-tenant model has a more scalable, cost-effective, and easy-to-maintain architecture than the single-tenant model. Software companies could make the most of the rapidly growing SaaS market by building a multi-tenant software application for businesses to use.

The complexity of programming a multi-tenant application may require the help of an experienced software development company. That type of company can build and scale a centrally-hosted application with a secure back-end database, preventative security measures, and ensured regulatory compliance per business needs.

Disclaimer:

Chetu, Inc. does not affect the opinion of this article. Any mention of specific names for software, companies or individuals does not constitute an endorsement from either party unless otherwise specified. All case studies and blogs are written with the full cooperation, knowledge and participation of the individuals mentioned. This blog should not be construed as legal advice.

Chetu was incorporated in 2000 and is headquartered in Florida. We deliver World-Class Software Development Solutions serving entrepreneurs to Fortune 500 clients. Our services include process and systems design, package implementation, custom development, business intelligence and reporting, systems integration, as well as testing, maintenance and support. Chetu's expertise spans across the entire IT spectrum.

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