This question comes up from time to time. It is akin to asking moto-enthusiasts what type of ‘oil’ you should use in your engine. The result often leads to a very long, endless debate, until folks just get tired of it:).
Is multi-tenancy (MT) essential to Cloud, aka SaaS, computing? No. The topic of single- or multi-tenancy is largely an economic consideration for companies providing their software’s services over the web. That said, the decision to build a SaaS offering is also going to be dependent, at least in part, on the specific service offering.
My own experience is as a SaaS product manager with both single and multi-tenant solutions. The single-tenant solution was essentially a duplicate of the multi-tenant offering due to a very large customer’s requirements (load, SLA, etc.)
Having delivered SaaS solutions to a number of enterprise customers (in healthcare, finance, manufacturing, and other industries) MT was never an issue. If the topic was even raised (e.g. RFPs), it was often little more than a checklist item. Key concerns are typically accessibility, bandwidth requirements, security, SLA, and scalability.
Multi-tenancy is generally more scalable at lower price points. And, again, depending on the solution in question, customization was not meaningfully constrained simply because our platform was MT.
To be honest, whether your offering is ST or MT should not be a major consideration when selecting a service provider. Do you care if the train you’re on has one or two diesel engines way up front? No, you just want to get there in a manner that meets your expectations.
As noted in the article, the real issue comes down to the effort involved as ISVs take their desktop-based solutions into the web. Many of us can recall old "Win 3.1" apps migrated to NT (early predecessor to Windows 7) using the minimum effort required. Simply moving a desktop-oriented app to the web and calling it ‘SaaS’ is no different.
If you’re so inclined, see a related post, "SaaS Is Not Multitenancy."
(photo credit: Aceitera)
BONUS: Check out this video on ‘what’ the ‘cloud’ is. Short, simple, sweet (even if a bit idealized).