In Jason Corsello's most recent post entitled Is Your Vendor Really Operating "In the Cloud"? The 3 Most Important Questions to Understand About SaaS he does a great job discussing pass/fail tests to give to a provider claiming to be SaaS. We are very passionate about the benefits of multi-tenancy, which Bob covers very well here and here. And the product update aspect is critical too; remember that many customers move to SaaS to unlock the chains preventing them from upgrading their on-premise software, mainly due to extensive customizations and custom coded integrations. A multi-tenant architecture forces the vendor to implement processes that can be performed "once per instance" vs. "once per customer". This means that while the customer must take the upgrade, the vendor must upgrade them seamlessly and not break their setup. The customer gets the benefit of access to the latest innovations released by the vendor, and does no work to get them.
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