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 multi-  tenancy

 arrangement rather than a 

 single-  tenancy

 arrangement. This is similar to the situation with the shared server or dedi-

cated server we discussed earlier for web hosting. An example of this in practice is shown in 

Box 3.3.

 Multi-  tenancy  SaaS

A single instance of a 

web service is used 

by different customers 

(tenants) run on a single 

server  or   load-  balanced 

across multiple servers. 

Customers are effectively 

sharing processor, disk 

usage and bandwidth 

with other customers.

 Single-  tenancy  SaaS

A single instance of 

an application (and/or 

database) is maintained 

for all customers (tenants) 

who have dedicated 

resources of processor, 

disk usage and 

bandwidth. The single 

instance may be  load- 

 balanced over multiple 

servers for improved 

performance.

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Part 1  Introduction

Box 3.3

Is  my  SaaS   single-  tenancy  or   multi-  tenancy?

Smoothspan (2007) has estimated the level of  multi-  tenancy for different web services, 

which is also dependent on the number of seats or users per server. He estimates that 

in 2006 Salesforce was running 40 Dell PowerEdge servers with 6,700 customers (ten-

ants) and 134,000 seats. This is equivalent to 168 tenants per server, and 3,350 seats 

per server! Although this figure suggests the disadvantage of  multi-  tenancy, he also 

estimates that there is a 16:1 cost advantage of  multi-  tenant over single tenant.

An example of a consumer SaaS, word processing, would involve visiting a website which 

hosts the application rather than running a word processor such as Microsoft Word on your 

local computer through starting ‘Word.exe’. The  best-  known consumer service for online 

word processing and spreadsheet use is Google Docs (http://docs.google.com) which was 

launched following the purchase in 2006 by Google of start-up Writely (www.writely.com). 

Google Docs also enables users to view and edit documents offline, through Google Gears, an 

 open-  source browser extension. ‘Microsoft Office Live’ is a similar initiative from Microsoft.

Google Apps enables organisations to manage many of their activities. The basic service is 

free, with the Premier Edition, which includes more storage space and security, being $50 per 

user account per year.

A related concept to web services is