Financial services organizations are accepting the advantages of cloud deployment because they are seeing that unified ecosystems, more agility, and better management of investments are all great for business. The cloud can be daunting though, for organizations that aren't clear about their priorities or don't have access to the expertise required to maintain or secure data effectively.
Choosing between a single and multi-tenant cloud is an increasingly important decision, given lower data storage costs facilitated by cloud-based infrastructure. This allows more financial organizations to eliminate the need to purchase and maintain the infrastructure required to manage big data better. Here's what you need to know before you make your choice.
Single or Multi-Tenancy?
Why you need a cloud can tell you a lot about whether single or multi-tenancy is right for you, and the pros and cons of each approach can be defined by this need.
It makes sense to start by evaluating challenges related to hardware, software, and human resources, followed by an examination of costs for upgrades, the need for fewer disruptions, decreasing internal IT staff, extensive risk management solutions, and flexibility with vendor selections. The aim, eventually, is deployment that allows an organization to use its resources more efficiently, speed up innovation, and optimize costs.
Understanding what single tenant and multi-tenant means is fairly simple. The former describes a single instance of software and supporting infrastructure serving a single customer, while multi-tenancy refers to a single instance of the software and its supporting infrastructure serving multiple customers. Single tenancy offers each customer an independent database and instance of the software. In multi-tenancy, each customer shares the software application as well as a single database. The data is tagged in the database as belonging to one customer or another, and the software tracks and manages who the data belongs to.
Benefits of Single Tenant Deployment
There are three reasons why single tenancy always scores over multi-tenancy — security, reliability, and customization. Check out this infosheet for more information.
A single tenant approach will always be more secure because each customer’s data is completely separate from the other. In terms of security, data is isolated, which can be the key to meeting compliance needs in a post-GDPR era, especially for payment-related transactions or in the case of regulations related to data residency.
Reliability stems from the fact that customers using an application don’t affect one another. This boosts consistency and performance, because dedicated infrastructure can provide the highest and most consistent level of performance for an application, as opposed to the multi-tenant approach that divides resources between customers. Also, as the only user, all resources in that environment belong to you, which means intensive applications that demand consistently high performance have higher chances of being met.
Single tenancy also allows customers to do more in terms of configuration and customization because the software is unique to a customer and allows for modification. This applies to network and storage infrastructure as well, because it offers users the ability to architect an environment exactly the way they need it, from the amount of memory required to the type of network switching to serve traffic, to local and external storage solutions that best meet capacity and performance needs.
Then there is the “noisy neighbor syndrome,” a reference to problems faced by cloud services when more than one user comes on board. Physical resources are now shared, and the performance of applications may be impacted if other users in that environment have high performance or usage spikes. The failure of one application may lead to a grabbing of resources that affects others, leading to a potential weakening of the entire edifice.
There are other advantages, such as economics. Dedicated hosting may actually be cheaper, in terms of total cost of ownership, as opposed to public cloud depending upon the steady running and number of applications being deployed on a platform. Managed infrastructure and support is another factor, given how complicated this can be and how it can call for additional resources and training. Lastly, a single tenant approach comes with dedicated resources equipped to tackle varying technical requirements and deal with scalability far better than in a scenario where resources have to be divided between many customers.
The Case Against Multi-Tenancy
There are all kinds of reasons why multi-tenancy scores fewer points when compared with single tenant deployment, starting with the “cascade effect” that can occur when a major public cloud service suffers an outage. If and when this happens, it isn't just individual customers of a provider that suffer but the many customers of each SaaS provider using that platform.
Another possibility that can have an adverse effect on growth is a service provider's move to delay or remove features to satisfy the requests of larger customers. Backing up databases is also a nightmare, which is why few multi-tenant systems offer users the option.
Finally, there is the issue of data sovereignty, which is increasingly important as requirements vary from country to country and are often subject to modification. The ability of public cloud providers to move data around for purposes of efficiency and recovery could put users in jeopardy in the absence of strict requirements in the users’ contracts. There are implications for security as well, because every customer’s data resides inside a single database, making them all more prone to risks.
The NexJ Approach
NexJ CRM offers flexible cloud-based deployment options that can be tailored to meet any needs and has real experience with cloud-based software for the financial services industry that allows companies in these sectors to combine information from multiple systems to create a singular, comprehensive view of the customer. Our open and flexible architecture can securely integrate into all enterprise systems and empowers customers to customize the solution, while offering them all the flexibility they need.
Our single tenant private cloud deployment delivers the integration, customization, data ownership, and security that financial services organizations need, enabling them to retain ownership and control over data, and leverage the wealth of data across the company, while taking full advantage of the cost savings and agility of cloud computing.
If you have questions about single tenancy and the advantages it offers over multi-tenancy, do get in touch with us.