How To Recognize Key SaaS Software Differences

Hosting Architectural Differences

If there is a single deep-seated architectural disparity that on-demand business software manufacturers are split on it’s the multi-tenant versus isolated tenant hosting models.  Multi-tenant software manufacturers such as Entellium, NetSuite and Salesforce.com, embrace the shared architectural services model and boast that it provides efficiencies of scale, in terms of both IT (Information Technology) maintenance and cost savings, and that there clients are the ultimate beneficiaries of these operational and cost benefits. Isolated tenancy software manufacturers such as SAP and Aplicor claim that only when every client operates within their own individual relational database and operating environment are security, privacy, performance, customization and integration flexibility actually maximized.

Which argument is the better answer for customers? It depends on who you ask. In reality, this underlying issue is less important in the small business market (as small businesses generally show less interest in IT architecture) and potentially more vital in the mid-market and enterprise (Fortune 2000) market (where IT architectural preferences, requirements or mandates for new business systems are part of a much larger IT strategy).

It’s also possible that future outside environmental factors will inspire or pressure growth of one architectural strategy over the other. If customer pricing and discounting demands continue to grow, the multi-tenant model may become the norm. Conversely, if regulatory compliance demands such as Sarbanes Oxley, privacy demands such as HIPAA or information security demands escalate even further to the forefront, the isolated tenancy model may quickly become the preferred model. The end result at this point in time is that there is no agreed upon single best answer that serves all customer requests or opposing vendor interests. Competing technology strategies and opinions will continue to favor one strategy over the other based upon the criteria and interests of any given customer, vendor or other interested party.

Continue on to review SaaS software customer market differences