The old debate on single- vs. multi-tenancy for SaaS solutions has become really interesting, the game changer being virtualization.

The arguments for and against single/multi-tenancy for SaaS offerings have remained relatively unchanged for a while now. Supporters of single-tenancy value the benefits in terms of security, control and performance, while proponents of multi-tenancy point out factors such as cost optimization and greater application/data insight that benefits (directly or indirectly) both SaaS users and vendors. Who's right? Of course, both are -- in a perfect world, there are two sides to every argument.Virtualization, though, changes the status quo considerably for vendors as well as users of SaaS.

Vendors can benefit from the "multi-tenancy" of hypervisors on a single hardware platform (and hence optimal use -- in theory -- of the hardware and OS resources), while customers can benefit from the luxury of having their own, separate instance of the application (better security and control… again, in theory).

Of course, virtualization is no silver bullet for SaaS. For one, performance on the shared hardware platform will continue to be an area of concern. Then, there are limits to how many customer instances you can put up with hypervisors (although there are limits to multi-tenancy anyway). Also, it's harder for vendors to gain insight across multiple customers, if each customer has data sand-boxed into a virtual application instance. Last but not the least, what of the significant effort and investment that has gone into "multi-tenanting" an application, no easy (or cheap) task for SaaS vendors?

But consider the advantages, too.

Software customization and upgrades -- the other side of the coin being version lock-down for customers -- are no longer a major constraint for either vendor or customer. The customer is enormously empowered in terms of flexibility and control -- and I cannot imagine that vendors would not benefit from this flexibility and the resulting renewed customer engagement into the SaaS model. True, vendors would have to shift gears to adopt, but this cost of shift would easily be absorbed into the future.

In that case, why have multi-tenancy at all? Well, the beauty is -- from a vendor perspective, at least -- that you could now have virtualized instances of different versions of the SaaS offering…each in turn still multi-tenanted. This is what I call "smart multi-tenancy". There will be a tipping point at which benefits of virtualization and multi-tenancy begin to shift in favor of (or against) the vendor and customer; only experience will tell.

Interested in sharing your experiences in this regard? Add your comments below or write to me at [email protected] old debate on single- vs. multi-tenancy for SaaS solutions has become really interesting, the game changer being virtualization... Who's right? Of course, there are two sides to every argument.