Secure, Scalable, Cost-Effective: The Value of Multi-Tenant Cloud ERP

If your company is considering making the move to a cloud-based enterprise resource planning (ERP) system such as metasfresh Cloud, you’ll no doubt have heard or read the term “tenancy” being bandied about. However, when we look up “tenancy” in the dictionary or on Google, we’re unsurprised to find it means the holding or occupancy of land or premises owned by another person by lease. So, the question is, how does tenancy — and in particular, “multi-tenancy” — relate to cloud ERP?

In cloud computing terms, a tenant is simply a customer who purchases — or leases — cloud computing resources (an ERP software solution, for instance) from a provider. The customer can be an individual user, a company department, or an entire organisation. So, just like in layman’s terms where a tenant is a person or a family who rents the use of a house or apartment from a landlord, a cloud tenant rents the use of cloud servers and software applications from a cloud services provider.

Cloud tenancy is categorized into two formats — single-tenancy and multi-tenancy. When it comes to things like ERP software applications, the difference between single-tenancy and multi-tenancy essentially boils down to how the software is deployed. In a single-tenant hosting architecture, each customer (i.e. tenant) has its own instance of the ERP application and supporting infrastructure. The ERP is hosted on a cloud server dedicated solely to the customer organisation, who accesses it via the internet.

With multi-tenant architecture, rather than a server hosting only one customer who has sole access, many different customers operate on a single piece of ERP software, which is operated, maintained and updated by the vendor.

You can think of multi-tenant cloud as being akin to an apartment building — while the entire building shares resources, such as electricity, etc., each tenant can nonetheless only enter their own specific apartment. Or, as TechTarget puts it in cloud computing terms: “In a multi-tenant cloud system, users have individualised space for storing their projects and data. Each section of a cloud network with multi-tenant architecture includes complex permissions with the intention of allowing each user access to only their stored information along with security from other cloud tenants. Within the cloud infrastructure, each tenant’s data is inaccessible to all other tenants, and can only be reached with the cloud provider’s permissions.”

The main benefit of multi-tenant solutions like metasfresh ERP is that costs are typically lower than single-tenant solutions, as development and maintenance costs are shared between tenants. With single-tenant models, you shoulder the costs of the entire system alone. As TechTarget points out, “Single-tenant cloud deployment typically comes at a higher cost, as vendors need to maintain and operate customer-specific environments, comparable to running the service on premises.”

Multi-tenant also means that upgrades don’t require any intervention on the customer end — the vendor makes updates and rolls out regular software patches to the application automatically. A single-tenant model, on the other hand, requires expertise on the part of the cloud customer to manage updates, security and maintenance — and you will have to plan ahead to allow significant time to perform those updates, add modules or otherwise enhance the system. Conversely, with a multi-tenancy platform like metasfresh, the application gets upgraded multiple times per year — a huge time-saver for customers.

As Urvish Vashi, SaaS CMO at HighRadius, puts it: “Multi-tenant cloud solutions have the upper hand on their single-tenant counterparts when it comes to cost-effectiveness and ease of deployment.”

What about security? Well, historically, the perception has been that single-tenant cloud deployments were more secure than their multi-tenant counterparts. This is because each customer essentially runs their own software on their own isolated server — so there’s less risk of any other customer “accidentally” accessing data, or a security breach of one client leaving others exposed as well.

However, as Panorama Consulting Solutions highlights in its 2019 ERP Report, cloud ERP vendors are extremely vigilant in terms of security because they know they are popular targets for security breaches. Gartner concurs, noting that the majority of cloud providers invest significantly in security, realising that their business would be at risk without doing so.

Vashi makes a similar point: “Multi-tenant providers are making significant investments in people, process and technology to ensure the highest levels of data privacy for their clients. Companies no longer exist in a world where private instances of their ERP can be entirely walled off. Modern enterprises not only encourage, but require their employees to be able to access these systems from home, on the road, from their desktop or on mobile — you name it.” This means, Vashi says, that enterprises need to have exceedingly strong competencies in managing security if they choose single-tenant — something that even mid- and large-size companies struggle to do.

As such, for organisations that lack or have limited in-house security and management teams, multi-tenant cloud ERP is nearly always the best option. Why? Because, in addition to high vigilance and security investments, multi-tenant providers have dedicated security teams, meaning security typically exceeds what enterprises can achieve in-house.

Multi-tenant ERP is indeed the best fit for the majority of businesses. A solution like metasfresh Cloud is more cost-effective than single-tenant offerings, is highly scalable, frequently updated, and highly secure. Our NextGen open source ERP solution is expertly maintained by dedicated teams to ensure the software is current, performing optimally, and readily scalable. This helps firms keep their IT personnel working on more strategic tasks beyond patching, maintenance and upgrades – that’s our job.

At metasfresh, our aim is to free up your valuable resources so you can save time and money on the implementation, servicing and operation of your ERP system, allowing you to focus on the development of your core business.

Talk to us here at metasfresh. Since 2006 we have been developing our ERP software non-stop with open source components and under the open source licenses GPLv2 and GPLv3. Our mission is to enable each and every company to access a powerful ERP system that supports digital transformation and fuels corporate growth. Get in touch with our experts today for more information and insights.