Oracle’s Single Tenant Solution

Posted: February 19, 2008 in CRM

When life gives you lemons, you need to make lemonade.  At least that’s the conventional wisdom, right?  Oracle’s announcement of a Single Tenant Enterprise Edition of Siebel CRM On Demand sounds like an instance of a company making lemonade (Single Tenant?) but before you jump to that conclusion you might want to think about it.

For a long time we have listened to a war of words over single-tenant versus multi-tenant as the appropriate architecture for on-demand computing.  The battle has been mostly one sided since about 2000 when the first on-demand SFA solutions began hitting the market. 

It’s useful to keep in mind that one of the big selling points for on-demand computing when it first got going was the swift and sure implementation it offered as compared with a traditional client server implementation.  The big competition for on-demand back then — in addition to conventional client-server — was called ASP for application service provider and most people had a hard time telling them apart.  But essentially, ASP was simply conventional client server software delivered over a VPN or virtual private network. 

It was guilt by association.  In the eyes of the on-demand community, conventional client server was bad and hosting it over a VPN was worse.  As a practical matter, those early solutions left something to be desired and ASP vendors discovered it was hard to make a profit because the hardware requirements were too great.  I think ASP went the way of other first generation solutions and I haven’t heard of any in years.  So the Oracle announcement is something of a throw-back but if it is, the similarities end as fast as you can say single instance.

Oracle has done some interesting things in its effort to make single instance something more than the defacto lemonade you can make with your lemons.  Consider this:

First, the applications themselves are no longer client-server and they haven’t been for quite a while — going back about four years to Siebel’s introduction of its browser based applications.

Second, Oracle has done a lot more than simply offer applications on a VPN.  With its vision of grid computing Oracle sees an opportunity to provide customers with single or multi-tenant solutions depending on their requirements. 

Much as you might like multi-tenant and think it is the technological equivalent of the introduction of the fork to Western Europe in the 12th Century, you also have to — or should — acknowledge that there are times when you need the flexibility of “other means”.  Think fork is to roast beef as hands are to BBQ and you get my drift.

In fact, there are plenty of enterprises and industries where, for legal or regulatory reasons, the organization simply cannot subscribe to an on-demand solution that shares hardware.  Such organizations will be well served by a solution that doesn’t make them share and that seems to be Oracle’s approach at the moment. 

Nevertheless, it ought to be noted that grid computing opens up a lot of other opportunities as well.  Grid computing gives Oracle the ability to let some customers use single tenant solutions while others take advantage of multi-tenant solutions. 

This “have it your way” approach may mean the weakening of the multi-tenant argument in favor of on-demand computing but in reality, that argument has been weakening for some time.  As on-demand solutions have become increasingly robust and conventional software has begun to be simpler and easier to integrate, use and maintain, the two types appear to be converging on a point in the future when business software will be much more intuitive and configurable.  That day is still off in the distance and some would argue that on-demand computing has a comfortable lead. 

Nonetheless, it is the nature of business competition to look for ways to leapfrog ahead of competition in the service of the customer and profit motives.  That necessarily means the obsolescence of old products and ideas as new ones come to the forefront.  Oracle’s announcement of single tenant on-demand computing doesn’t take us that far down the road, but it is an important signal that things are changing again and that even in the avant guard world of on-demand computing, no one’s lead is permanent.

Comments
  1. PaulSweeney says:

    Just a point: some customers are only concerned that their DATA isn’t on a shared server. If the data is on a server in their environment, or on a dedicated server in the vendor environment, that suffices for most.

  2. Denis,

    A few comments on this:

    1. Oracle is definitely making lemonade. The Oracle data center operations team essentially gets the database licenses for free, hence they can offer this. No other OnDemand company can afford to do this because the database licenses are so expensive.
    2. You mention that some companies can’t store their data on shared hardware. I don’t think Oracle’s announcement is about discrete HW, it is about single-tenant apps running on virtualized HW. So what they are doing doesn’t solve that problem.
    3. What salesforce.com and the “real” OnDemand providers are doing is running a very small number of instances of their apps. In salesforce.com’s case they have eight database instances (based on the listings on their trust.salesforce.com site) and probably a few hundred app servers or blades running identical versions of the app. It is relatively easy for them to update this farm for each release, or patch it as necessary. On the other hand, Oracle will, if they are lucky, have thousands of single-tenant deployments of app and database servers. Maintaining this is a huge nightmare and has two effects: a) slow roll-out of updates and patches; and 2) higher maintenance and staffing costs that need to get passed on to customers. Single-tenant customers also expect to be able to customize their app, which breaks the entire SaaS model. It’s ironic that Siebel OnDemand CRM was multi-tenant, but Oracle made them single-tenant it, which is going back to horse-and-buggy. People who worked there in data center ops couldn’t believe the change in direction.

    Cary

  3. Anthony says:

    Cary, nice to see your comment, we need to make sure you understand what we are doing, you say real on demand? why is the idea of multi tenancy a benefit to a customer? its a vendor value, and why therefore is multi tenancy considered by you to be “real on demand”?

    On demand is just that, a service, a subscription, a delivery option to an application that provides business value to its users, we do that and do that well. We have chosen to provide our customers with choice.

    We are much more than single tenant and virtualization. We offer multi tenant instances of our application, we offer single customer multi instance and single tenant single instance versions of CRM On Demand

    On updates and patches, our architecture and our investment in tools allows us to patch and upgrade our entire fleet automatically in a number of hours, we chose to provide a window to our customers to help them with their business needs, we provide consistency in the application and do not break the SaaS model

    on the costs, we price at $70 pupm for the full CRM system with analytics bundled in, so where are the costs you suggest we pass on to our customers?

So, what did you think?

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