You’ve heard all about cloud technology, but what is it, really? Paul Lundy, president of software solutions provider Fonteva, explains the pros and cons of cloud and single-tenant software options.
What is the difference between “true cloud” and “single-tenant” software solutions?
A single-tenant software solution is also called “hosted” or “on premises.” This simply means that there is one software installation and code base per customer, and it can be managed in one location, either onsite with the organization that owns it or hosted by a third party.
A true cloud solution is also called “multi-tenant.” This means that many organizations share large server and software code bases and access their solution over the internet. These systems are managed in multiple locations, and organizations pay a subscription fee for maintenance services.
What are the advantages of each?
A great analogy is to think of multi-tenant software as an apartment building and single-tenant software as a single-family home. In an apartment building, you can paint and decorate your unit to meet your needs, but everyone in the building benefits from a new roof. With a true cloud solution, it is easier to provide maintenance and upgrades for all customers at one time, like in an apartment building. So associations can take advantage of the newest features more often, and for little to no extra money.
But, just as some people choose to purchase a single-family home for the autonomy, some associations want to have complete control over their software. Organizations with a large, dedicated IT department that want to maintain control over hardware, software, security, and maintenance may benefit from single-tenant software. As with a house, this model comes with a higher cost of ownership.
How can an association assess which model will best meet its needs?
There are clear pros and cons for both single- and multi-tenant solutions, and no solution will work for every organization. There are tons of free online resources, or you could hire a consultant to help. My advice is to think about the long term: Where is your organization now, and where would you like it to be in five to 10 years? Then identify the type of software solution that will align with your organization’s goals.