October 7th, 2008

I’ve noticed a trend recently of conventional integration vendors offering a “hosted” alternative to their on prem products and appliances. Unfortunately, those offerings are then marketed as “SaaS” or “on demand” simply because they are hosted “in the cloud.” To be clear, that is an ASP model – a model that did not fare so well. Just because something is hosted does not make it SaaS. (Nor does leasing or offering monthly payments make it SaaS either.)

So what’s the difference and what’s the big deal? The chief characteristic of SaaS that separates it from the old ASP model is multi-tenancy. Multi-tenancy simply means there is only one copy of an application deployed in the cloud (single instance) but that all customers can use that copy (multi-tenant) and even customize it to meet their unique requirements. Multi-tenancy is what makes all the great values of SaaS, such as rapid time to value, faster innovation cycles and ultra-low cost structure, possible.

It is particularly important in the world of integration because integration is such a fundamental building block for the SaaS community. Think of any common infrastructure system such as electricity as an analogy. It only makes sense to build common infrastructure systems once to the benefit of the entire community.

In his book “The Big Switch,” Nicholas Carr describes how one hundred years ago, companies stopped generating their own power with “dynamos” and plugged into a growing national power grid of electricity. Looking back today, the benefits are obvious: dramatically lower cost, greatly reduced maintenance, and ubiquitous distribution. It also made the process of upgrading technology much easier as changes made to the common grid were immediately available to the benefit of all users. But most importantly it addressed the scalability issue that was created by the limited reach of isolated dynamos and in the process unleashed the full potential of the industrial revolution.

We are in the midst of a similar revolution today with the advent of SaaS and cloud computing and integration has become the modern-day version of electrical power – call it digital electricity. Conventional integration products and appliances are single tenant – they were designed and built to support individual enterprises much like the electrical “dynamos” of yesteryear. In the single-tenant model, the burden and cost of building, implementing, and maintaining integration is shifted to the end customer. Every business must generate its own digital electricity at great expense. And attempting to grow the multi-tenant SaaS ecosystem with single-tenant integration products will result in sky-rocketing maintenance costs and greatly limited adaptability and scalability.

When we built Boomi On Demand, we recognized that the industry needed a “universal power grid” to unleash the full potential of the SaaS revolution. We built the Boomi platform from the ground up as a true, single-instance multi-tenant SaaS platform. It was designed and built to natively handle the complexity of multi-tenant SaaS applications. ISVs and end customers alike can now plug directly into Boomi’s “power grid” and have instant access to integrate with the industry’s largest network of interconnected SaaS, Paas, on-premise and cloud compute environments.

This is not a perfect analogy but I think it makes the point. Multi-tenant platforms such as Boomi unite and power the growth of the SaaS ecosystem. Single-tenant integration products simply weren’t designed with SaaS in mind – they were built for conventional on-premise implementations.

So yes, multi-tenancy does matter. We have the opportunity as we build out the SaaS ecosystem to avoid the integration mistakes that plagued the enterprise era. Adopting a common, multi-tenant architecture for integration is imperative to support rapid growth and expansion.