Why Your Cloud Applications Should Be Multi-tenant

Listen to my conversation with Rick Nucci, chief technology officer of Boomi, a SaaS integration vendor, who we last interviewed here in April 2009 on the topic of SaaS Integration, Simpler through Sharing.

In this podcast, learn why multi-tenancy is such a crucial ingredient for software-as-a-service and other cloud services, and find out how ISVs can use platform-as-a-service to get to multi-tenancy faster.

Listen to or download the 10:51 minute podcast below:

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—Transcript—

PW: Rick, I thought it would be good to have a chat, because both of us, in fact, have been blogging a lot recently about the cloud — which has become much more accessible this [past] year, much more mainstream, there’s lots of businesses and developers moving onto the cloud. But both of us I think are worried that they’re not all moving onto the cloud in the right frame of mind.

RN: Yeah, absolutely. And it’s dangerous, frankly, a little bit. I think cloud, and software-as-a-service as a subset of that term, has enough proof points and track record behind, that the hype is not going to outweigh the benefits. But nonetheless, while technologies like Amazon are fantastic in what they can enable you to do, they also can enable you to take very dangerous shortcuts, in terms of the way you deliver your cloud service, which can have very consequential long-term effects.

Yes, and specifically we’re talking about people who take an application or develop some software, put it onto the cloud using some kind of virtual machine capability — and then what they’ve actually done is, they’ve taken an application that wasn’t built for the cloud and they’ve just put it in the cloud. And that’s when they encounter problems, isn’t it?

Yeah, exactly. If I rank from greatest offender to least offender, the greatest offender doesn’t even host it for you on Amazon. They build the image — and frankly, any cloud where you can build a virtual image and just provision it — they build the image and they say like, here you go, go install it. I don’t know that that’s like that much different than giving you a CD. I mean, yeah, you don’t have to manage the server yourself and that’s great. But that’s like, I don’t know, one-tenth of the overall benefit of doing this in the first place.

And so, if that’s the most egregious offender, the next-rank offender is the person who says, ‘Okay, well, I’m going host it for you’ — but behind the scenes, for every customer, they’re provisioning a dedicated instance for that customer.

And the argument, or the con, that you’ll hear from the folks who are trying to downplay the significance of multi-tenancy will say, ‘What does it matter if the customer has this nice web experience and the vendor’s managing their upgrades?’ And the answer to that is well, that’s the exact point, the vendor’s managing the upgrade — and they’re launching now when they have no customers and they’re thinking about their first dozen customers. Well, what happens when they have a thousand customers, right?

And we’ve heard folks who’ve architected this way from the beginning — and I won’t even use Salesforce because they’re the obvious example. SuccessFactors recently gave a speech, [by CEO] Lars [Dalgaard], talking about their architecture and their approach. They have something like over a thousand customers per physical server when you net it all out and aggregate it. And that‘s the marginal utility, that’s the scale that you need to get to — because you need that op-ex in your business as a SaaS ISV to be in the five percent type of range. And it’s not going to happen if you’re doing a per-customer expenditure.

Yes, but Rick, we’re talking about companies that have been delivering SaaS for many years, that have had the opportunity to really sit down and hone their platform. For a lot of ISVs, they don’t have that background and there’s a way that they’ve done things that they’re very comfortable with. What is the point of them learning to do things in a completely different, unfamiliar way? What are they actually losing by not going the multi-tenant route?

Yeah, it’s a very important point…