Cloud-hosted collaboration: multi-tenant or dedicated?

Cloud-hosted collaboration: multi-tenant or dedicated?

Summary: We just had another of our regular cloud research meetings at Forrester. In these meetings, we cut across our research organization to examine cloud computing from every angle.

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We just had another of our regular cloud research meetings at Forrester. In these meetings, we cut across our research organization to examine cloud computing from every angle.

Compared with even just a year ago, it's amazing how important and pervasive cloud computing analysis (as opposed to cloud computing guesswork) has become in our research calendar.

You can see the existing cloud/SaaS research here and our planned research here. As the meeting host, I mostly listen, probe, and take notes, but ocassionally I get to jump in with a thought.

To wit: We are often asked about whether cloud-based collaboration (email, team sites, instant messaging, Web conferencing, social computing, etc.) works best on multi-tenant, dedicated solutions, or both. The answer is both, but trending towards multi-tenant. Our clients are interested in both multi-tenant and single-tenant or dedicated cloud solutions -- as long as the price is right.

The future of cloud-based collaboration is clearly multi-tenant for two economic reasons:

1. Multi-tenant enables the fundamental economic benefits of a shared resource. We can see this in the price war going on in email right now -- a 50% price cut in the last 12 months with multi-tenant cloud email. The floor on email cost keeps dropping, fueled by the better economics of multi-tenant solutions and high capacity utilization.

2. Multi-tenant is a much faster way to deploy improvements. With multi-tenant, Gmail can add features overnight; Exchange only once every three years. Multi-tenant Cisco WebEx gets a quarterly update; IBM Lotus Sametime can't (though LotusLive.com can). Because there is a single instance of the code in a multi-tenant cloud solution, the innovation is continuous, incremental, and globally available.

Multi-tenant is also the path that every major cloud collaboration vendor is on. Microsoft, for example, is running Exchange Online for $5/mailbox/month in a multi-tenant solution that now scales past 25,000 seats. Salesforce.com and Google have always been multi-tenant. And Cisco WebEx Mail and IBM LotusLive.com are also multi-tenant from their core.

So when does a dedicated (single-tenant; servers dedicated to you) solution make sense?

1. If you aren't yet comfortable with the security assurances of a multi-tenant solution. This is what keeps most companies away from the cloud at all. It's the number one concern in our surveys of IT decision-makers around the world.

It's also what led Google to build a dedicated data center for government workloads. At least there, the government data won't mix with the data of the hoi pollois. But this is mostly about getting the security assurances nailed down. I view it as a short-term limitation.

2. If your content & collaboration application must be highly customized and integrated tightly with other applications. This doesn't apply to most collaboration solutions today. But for SharePoint or Notes applications it does. And while it has kept SharePoint off of Microsoft's solution so far, even SharePoint will go multi-tenant in 2010 with a sandbox to keep your custom application walled off from other apps. We also expect some Lotus Notes and Connections features to show up on the multi-tenant LotusLive.com in 2010.

3. If you workload won't run in a virtual machine. Okay, so this is a bit down in the technical weeds. But applications do run on silicon. And limitations around memory, buffer space, processing speed, and the like define what kinds of things you can actually run in a virtual machine, hence in a multi-tenant cloud. For more on this, see Frank Gillett's report on scale-out workloads.

Disagree? Agree? Have other thoughts? Please share.

Topics: Cloud, Collaboration, Enterprise Software, Hardware, Software, Virtualization

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2 comments
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  • MindTouch delivers both options

    It is for the exact reasons you describe MindTouch provides
    users with a choice of OnDemand for dedicated hosted or Cloud
    for multi-tenant.

    In addition, we have found that business units or line of
    business managers are more likely to choose the cloud/ multi-
    tenant offerings to solve a specific pain point that IT is
    unable or unwilling to fulfill. It helps that the monthly
    expense falls in the realms of a discretionary budget.

    IT departments in the SME are purchasing OnDemand offerings to
    control costs yet still have the flexibility and power of a
    dedicated system.
    rioncm
  • RE: Cloud-hosted collaboration: multi-tenant or dedicated?

    The third reason is not relevant.

    If the argument is whether a workload can be virtualised or not you're still looking at a dedicated VM with its own application and DB.
    Virtualisation is just optimilisation of hardware resources.

    Multitenant is when you share the application and database. Whether it's virtualised or not depends on size. In other words can you live with the set of rules and limitations of the app, or do you like the app but want your own instance cause you don't like the defaults and limitations.

    One of the big problems are not the IT or Business depts buying this but the security depts. who use a 2 year old xls sheet with Y and N questions. More then 5 times N and your out. They need to get u to speed on technology and do a proper assesment. Some don't understand what they are buying. And there are not a lot of neutral parties who can give unbiassed advice with sufficient authority.
    hompie