Blog post

The Difference between Multi-tenancy and Multi-enterprise

By Andrew White | August 19, 2009 | 2 Comments


I was on a call with a vendor today who was explaining to me their heritage as it pertains to hosted supply chain management solutions.  They had a long list of “milestones” that included the “first” this and that, and among the list, where “multi-party”, “multi-process”, and “multi-tenancy”.  I felt as if the vendor was covering his proverbial you-know-what by including every variation of “multi”.

But, I thought about this for a moment, and I realized that this was a very important point that has not, for the most part, been explored in the public domain.  This is not some major research point, as I think the point I am about to make, is obvious, but it is worth highlighting and calling out.

Multi-enterprise and multi-tenancy are very different.  

Multi-enterprise is a form of behavior that describes a business process whereby two or more stake-holders (i.e. enterprises) participate in a collaborative activity.  Note – this is in contrast to the vast majority of business/trade/commerce, that is really “multi-party”.  This is where data is exchanged from one party to the next, and the next, and so on, in serial fashion.  EDI is a good example of how this activity is automated.  Multi-enterprise is generally more collaborative; where there is a shared objective, shared risk, shared reward, and/or shared investment.  Such processes are generally quite rare, and mostly focus on complex relationships or business processes.

Multi-tenancy is a vendor oriented term describing how a solution is managed.  Single tenancy solution implies that for every new user implementation, the vendor has to replicate the instance.  This adds cost to the vendor; and complexity to the user.  The additional cost to the vendor is easily understood in that each new user has their own “system”.  Complexity accrues in different ways; upgrading users becomes more complex as each implementation has to be upgraded individually; fixes have to be applied to individual systems.  Multitenancy is a design that reduces many of these costs and reduced many of the complexities.  Upgrades and fixes only have to be applied once; and new partitions are added to the “system” for each new user.  Flexibility becomes a greater challenge since any change to the system for one user may be easily accessible to other users, which may not be what the original customer wants; nor what the vendor seeks to offer.  

As such, a

  • Multi-enterprise application could be designed/deployed for single tenancy, or multitenancy;
  • Multi-tenant applications may support enterprise or multi-enterprise business processes.

It is important to know the difference to help avoid vendor hype; but also to apply the right tool (design) to the right problem.  That is where value is found; not necessarily in the clarity of definition.

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  • Jeremy Ralph says:

    Interesting article. I think there may be a typo:

    “Such processes are generally quite rate [rare?]”

  • Andrew White says:

    Oops – thanks.