The Straight Talk about Single-Tenant vs. Multi-Tenant SaaS Architecture
Now that you have made the decision that a SaaS HR software system is right for your company, you are faced with the decision as to whether you want a single-tenant or multi-tenant architecture system. If you are new to SaaS, how are you to know which of these systems is most appropriate for your needs? The answer lies in the specific needs you have as a company, in the footprint that your company has and/or the footprint that it expects to evolve to, and the degree of security that you require specifically, and that the countries in which you do business will require you to demonstrate.
What is the Difference between Single and Multi-Tenancy?
As the names suggest, single-tenant systems house the data for one company only; multi-tenant systems house the data for multiple companies on one server. But the differences between the two systems are much greater than this simple definition would suggest. They are different, not only technologically, but also in functionality, security, and in their appropriateness based on geography, industry type and a host of other variables.
Multi-tenant systems place the data from multiple companies on the same server, generally separating them from each other via a simple partition that prevents the data from migrating from one company to another. As the data is housed on the same server, each of the companies using the software is running the same basic application, with the same basic functionality and with the same limited configuration capabilities. A true ASP model, multi-tenant SaaS is an “off-the-rack” solution that can fit many companies without the need for much alteration.
Single-tenant systems give a user its own database and its own instance of the software application. Placed on its own individual server, or segregated via extensive security controls to create its own virtual server, users of single-tenant systems enjoy the benefits of significant configurability of software, robust functionality, and enhanced security. An on-demand model, single-tenant SaaS is best seen as a “custom fit” solution that many companies should use because their industry, geography or security requirements give them the need for configurability and customization.
Functionality of software is significantly greater for single-tenant systems than for multi-tenant systems. In the multi-tenant option, modifications to the software are limited because multiple customers are running the same instance of the software and because their data is being housed in a pre-configured database format. This is not to say that the functionality isn’t good. In fact, the opposite is generally true. For many companies with more basic database and information needs, configurability of software isn’t a necessity. Multi-tenant SaaS providers generally do a very good job of anticipating the needs of current and prospective customers and the standardized functionality is often all that is needed by a company. For that reason, some vendors actually provide customers with a choice between a single- and multi-tenant option.
By comparison, single-tenant systems use the provider’s software as the base of the final application, and open the doors to configuration of the software to meet the specific needs of the user. Changes in the appearance of screens, additions to individual modules, conduits to different internal databases or external partner databases, etc. can all be accommodated in the single-tenant environment. For many companies, these configurations make all the difference between a system that works synergistically and that creates a seamless flow of data to authorized users, and one that does not.
It goes without saying that a single-tenant system will have a higher degree of inherent security than a multi-tenant system as the potential for data migration from one company to another is eliminated when housed in a non-shared environment. Having said that, multi-tenant systems are still secure and the level of security offered by these systems may be adequate for a particular company’s needs.
However, there are industries in which security protocols must not only satisfy the company’s needs, but must satisfy industry, governmental and country protocols. Financial services, an industry under strict observance by regulatory agencies might be one such industry. Pharmaceuticals might be another. Aerospace, defense, technology and other industries each have their own internal and external security requirements. So the degree of required security will vary based on company, philosophy, geography, and other factors.
In addition to specific industries, different countries have different security protocols that must be met. The EU Safe Harbor Directive on the protection of personal data was designed to prevent accidental information disclosure or loss. Requiring re-certification every 12 months, single-tenant systems often can best satisfy the requirements because of their ability to ensure segregation of personal data.
The Bottom Line
Single-tenant and multi-tenant SaaS HR systems each have their advantages, as well as their disadvantages. Identifying the architecture that is right for you requires that you honestly assess the key aspects of technology, functionality, security, geography and more. It requires that you give consideration to your need for configuration, customization and integration with other data systems. It is only by considering all of these factors that you will be able to determine if a single-tenant architecture or a multi-tenant architecture is right for you.
This white paper was prepared by Sapien LLC, one of the most progressive and innovative providers of on-demand HRMS and HCM software solutions, and of Human Resources Augmentation™ (HRA) services. Emerging as the leader in the global evolution of HR solutions, Sapien can be reached at www.sapiensoftware.com or at 866-E-SAPIEN.
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