Single vs. Multi Tenant Cost Comparison


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SaaS model is extremely tight to operate from a cost perspective. Therefore, ISVs should explore ways to minimize their cost and increase their GPM. Multi-tenant models are quite attractive from the point of cost savings

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Single vs. Multi Tenant Cost Comparison

  1. 1. Single vs. Multi Tenant Cost Comparison
  2. 2. Single vs Multi Tenant – Key Differences Single Tenant Multi Tenant Any software can be delivered through single tenant model. No change required in software Software architecture should be designed for multi-tenancy, in order to be able to serve multiple customers at the same time Each customer gets their own environment (logically) isolated from other customers All customers share a common infrastructure environment More environments are required as the number of customers grow Single shared environment can typically handle hundreds of customers (depending on the complexity and concurrency) Can pick and choose the size of the environments according to the usage by customer (tenant) All customers (tenant) will get the same shared resources. Differentiation is difficult Please read the following blog for more information on business differences between single and multi tenant model
  3. 3. Single vs Multi Tenant – Key Driving Factors Single Tenant Multi Tenant Shortcut to get in to SaaS model of business Maintenance cost and operational overhead in single tenant model Less budget Legacy product Experimenting SaaS market Lack of technical expertise Competitors offering in SaaS model Domain doesn’t allow sharing of resources
  4. 4. Single vs. Multi Tenant Calculator SaaS model is extremely tight to operate from a cost perspective. Therefore, ISVs should explore ways to minimize their cost and increase their GPM. Multi-tenant models are quite attractive from the point of cost savings. However, there is lack of clarity when it comes to the exact $ amount that can be saved between single and multi-tenant models. Cello has come up with this tool to help organizations to find out the cost differences in operating between a single tenant(hosted model) vs multi-tenant. Free Calculator to measure the ROI in moving to Multi Tenant Model The following slides explains the various aspects that are considered to arrive at the ROI for migrating from Single Tenant to Multi Tenant Model.
  5. 5. Single Tenant Model Attributes Effort includes the following, • Packaging the software • Backing up current version in production • Deploying the new version • Database setup • Compatibility/Smoke Testing Identify the resources and effort required for Single Tenant Model Yellow highlighted cells are the inputs you will be providing. For the purpose explaining the calculator let’s take the above given values.
  6. 6. AWS Rates For the purpose of our comparison we are going to use AWS environment rates, which are considered to be nominal. Moreover, we are only going to do relative ($$$) comparison between single and multi-tenant models.
  7. 7. Per Month Cost in Single Tenant Model Unit Costing Per Month Total Cost Per Month Web Server $ 131.04 $ 131.04 Application Server $ 65.52 $ 65.52 Database $ 452.88 $ 452.88 Caching Server $ 54.90 $ - Monitoring $ 4.00 $ 12.00 Total Cost $ 661.44
  8. 8. Per Month Cost Break-up - Single Tenant Model
  9. 9. Cost Distribution By Resource - Single Tenant Model
  10. 10. Per Month Cost Break-up - Single Tenant Model
  11. 11. Per Month Cost in Multi Tenant Model Resource Cost Web Server $ 10.48 Application Server $ 10.48 Database $ 28.05 Caching Server $ - Monitoring $ 0.48 Total Cost $ 49.50
  12. 12. Per Month Cost in Multi Tenant Model • Based on the hardware requirements given for the single tenant model, the calculator automatically identifies the type of hardware required for the multi tenant model • It also determines the number of tenants that can be hosted in the given multi tenant environment • In this example a Large instance is chosen for all the server types • Total tenants supported in this environment is calculated to be 25 Total Cost of Multi Tenant environment that can support upto 25 tenants Cost of supporting 1 Tenant
  13. 13. Infrastructure Cost Per Month - Comparison
  14. 14. Cumulative YoY Infra Cost - Comparison
  15. 15. Deployment and Release Cost - Comparison
  16. 16. Total Cost Comparison
  17. 17. ROI In Multi Tenant Model
  18. 18. About TechCello Techcello is a cloud-ready, SaaS Application Development Framework Can be used to, Build new SaaS products Convert single-tenant Apps to Multi-Tenant Migrate on premise products to SaaS model Cello framework is delivered as a set of libraries and APIs that can be easily integrated to your product Applications built using Cello can be deployed in any cloud Cello contains building blocks for developing, monetizing and servicing your SaaS offering.
  19. 19. TechCello – Flexible Architecture TechCello supports all models of database multi-tenancy, there by allowing ISVs to operate in a hybrid model. TechCello offers an end to end SaaS Life Cycle Management Solution that can help in designing, developing and managing the operations of your SaaS product. Using TechCello you can simply focus on building your product functionalities, and TechCello can take care of the rest. TechCello is tested and proven SaaS Framework, built exclusively to meet the typical SaaS needs of your business and product. TechCello offers more than 30+ modules covering all the basic engineering blocks and operational modules. Apart from saving significant amount of cost, your precious time can be well spent on differentiating your product from competitors through unique product features.
  20. 20. Contact Us