The Highway and the Private Drive: The Case for Single-Tenant SaaS Solutions

Marketers today find they need increasingly nuanced solutions for their IT needs – in fact, Gartner has predicted that on average, marketing departments will have bigger IT budgets than IT departments in 2013. Increasingly, we see a career path for IT professionals inside the marketing organization, and many CMOs are appointing their own VP of technology. This means it’s all the more crucial for marketers to understand the risks in the technology they’re using, and how to plan for, and hopefully prevent, tech disasters. At best these debacles temporarily prevent marketers from doing good marketing work, and at worst they compromise the security of their customers.

Email is a great example. It’s second nature to us at this point that we’re barely worried when our email providers seem to hiccup or run slowly. But more could be at stake than your own patience. Let’s look at the back end: With enterprise email and cross-channel marketing solutions, traditional email service providers are built as multi-tenant software-as-a-service. When you and your colleagues log into the service, it’s simultaneously used by hundreds of other users from other businesses – the other tenants, or clients, of the ESP. Your data is literally hosted in the same multi-tenant database as is used by all the clients of that ESP. The multi-tenant SaaS model is great for the vendor, because it costs them less to operate and manage its services by aggregating all its tenants into one group system.

One of the main challenges to the multi-tenant system, though, is fault-tolerance, the ability to isolate processes so a failure on the part of one marketer’s email program doesn’t bring down the entire system. Not all multi-tenant SaaS providers face the same issues. A service like Salesforce can experience high usage volume, but not all of its customers will be taxing the system in the same way. ESPs present particular risks to the brand marketer, because their tenants are similar types of businesses with similar bulk sending needs.

PIcture your ESP as an extremely busy highway, with hordes of traffic (data) moving along at a rapid pace. Now imagine how busy that highway becomes on a day like Valentine’s Day – a huge day for online shopping and retail promotions. If the car in front of you spins out, it’ll be hard for you to keep from crashing into it, and the same goes for the car behind you. Multi-tenant ESPs are susceptible to these multi-vehicle pile-ups, especially when usage and data consumption is through the roof. Cyber Monday, for example, is a very high-usage day, because countless businesses want to send a high volume of messages, all at the same time. This past holiday season, two of the leading enterprise ESPs suffered a failure on their sending platforms and their backups, which led to mailings for some of the country’s biggest retail brands going down for as long as four days, prohibiting their customers from realizing potential deals and sales. 

Security is another important challenge for multi-tenant ESPs – having data pertaining to many major brands in one place is an alluring draw for hackers. In 2011, another leading ESP suffered a security breach that compromised customer data for dozens of major brands.

A single-tenant ESP is a less common option than the multi-tenant ESP. Simply put, it takes more work for the vendor to set up and manage the single-tenant model, and it’s more costly. Single-tenant ESPs still service hundreds of enterprise marketers simultaneously, but each customer’s email program is managed in a singular, contained system, with no intermingling of data, message composition, or sending. 

Single-tenant SaaS implementations have other benefits as well. Since the customer has full use of the resources, performance is vastly superior; the result is that it is possible to send tens of millions of messages in the precise 15-minute time window that is most optimal for customer conversion. Contrast this to multi-tenant SaaS ESPs, where delivering all the email to the sender’s list can take hours, due to the queuing of multiple tenants. Single-tenant SaaS implementations also can be deployed in different locations, increasing proximity to, and near real-time use of, CRM data. Cost, too, is often a key benefit, since the single-tenant SaaS solution may be licensed in a way that avoids per-message CPM fees. It’s not failure-proof. You might still crash your car – but the superior risk-isolation of driving on your own private highway closed to other vehicles is obvious.

Multi-tenant SaaS solutions have their place and can work well in certain applications, but it’s important to understand their limitations – especially compared to the needs of your business. The multi-tenant challenges of simultaneously managing any number of systems aside, the single-tenant model gives the customer greater fault-tolerance, access to data, performance, and total cost of ownership. Certainly there are cases in which a private thoroughfare is a better option than a busy highway.
By David Atlas, SVP of Marketing at StrongMail