Multi-tenant architecture for Enterprises?

The world is shrinking and the traditional boundaries between Desktop, Client-Server, Web and Cloud technologies are getting blurred. While some of your business applications should be strictly on-premise, some have to move to the private cloud and some more to the public cloud.

The users of today’s applications are spread across product divisions, geographies, business units, upstream vendors, downstream partners and customers. Configurability and customization requirements, security and data-scope policies, data isolation and scalability requirements, administration and reporting needs, all these can be quite diverse. The challenges of architecting and engineering such applications are many.

While SaaS as a business model may not be relevant to an enterprise application, multi-tenant architecture and SaaS like features can substantially reduce the operational and infrastructure costs of an enterprise.

Let us look at some examples that we have recently come across:

One enterprise with a strong franchisee model, is thinking of migrating its application to a multi-tenant architecture. The objective is to bill its franchisees for the usage of IT infrastructure and applications on a monthly variable model, instead of a fixed upfront cost.

A BPO is building a multi-tenant platform to manage its processes, but would be sharing the same application with all its clients.

And there is a large enterprise that is wondering whether it would make economic sense to build a single multi-tenant app. to be used by various SBUs, products, geographical units and subsidaries (each unit to be treated like a tenant).

Why not? Data isolation, data scoping and access control, horizontal scaling, tenant wise customizability and configurability, hosting on a hybrid but elastic infrastructure, single code base, ease of maintenance, reduced opex all these could indeed give this enterprise unparalleled cost savings and benefits.

Vendor management and e-procurement are some other examples where a multi-tenant architecture could be considered.

So thinking about the cloud, is not just about moving or not moving your existing applications and infrastructure to the cloud. It is also about re-thinking your application development framework and how you can leverage the benefits of a Multi-tenant architecture.

So whether you are building a new application or planning to migrate an existing application, you should carefully evaluate the kind of engineering stack that you would like to build (or buy).

Disclosure : Techcello will soon be launching another product called “Cello Frame” : – a Multi-tenant Development Framework for Enterprises.

Only 15% ISVs prefer proprietary SaaS platforms

Techcello recently conducted a survey among ISVs on SaaS : Engineering factors.

Inspite of the faster time to market that is inherent in many proprietary SaaS platforms, an overwhelming no. of ISVs (85%) prefer the flexibility and control offered by industry standard programming models such as .Net and J2EE.  However more than 45% expressed the need for a third alternative that gives them the freedom, flexibility and control of these traditional application platforms, without the complexities, risks, cost and time  overheads of building and maintaining their own SaaS engineering stack.

Another interesting finding is that preference between Microsoft .Net and Open source / Java is almost equally split.

More than 60% ISVs prefer to build or buy a SaaS engineering stack before proceeding with the development of business functions, whereas the remaining 40% would allow the engineering and architecture of the product to evolve parallely, while the business functions are being  built.
When asked about the challenging aspects of building a multi-tenant SaaS product : 65% mentioned ”ability to customize the product for each tenant”. 55% mentioned ”access control privileges and security policies that are unique to each tenant”.

SaaS operationalization aspects such as metering, tenant provisioning and subscription management, were not considered as challenging as customization and security.

Survey Results:

15% would prefer to build their product on PaaS in spite of the platform lock-in and monthly recurring cost
40% would prefer industry standard programming models with complete flexibility and control and would use cloud providers only for hosting and infrastructure scaling.
45% would prefer an option that combines the flexibility and control of option 2 with the speed of option 1.
45% would prefer to use Microsoft .Net technology stack
55% would prefer to use open source / Java technology stack
40% would allow the engineering and architecture of the product to evolve parallely while the business functionalities are being built
60% would first build or buy a SaaS engineering stack / framework before proceeding with the business functions
24% already have built their own in-house SaaS engineering stack / framework
76% would like to evaluate the pros and cons of buying a ready made framework vs. building their own

Challenging aspects of building a Multi-tenant SaaS product:

% of ISVs who consider this aspect as challenging

65% : customizing and configuring the product for each tenant (UI, data model extensions, business rules)
56% : security and access control policies that are unique to each tenant (data scoping, field level, page level)
40% : to support database scaling both horizontally and vertically
24% : tenant provisioning, product package and subscription management linked to access controls
11% : metering with links to usage limits and access controls
  9% : Audit trail (tenant wise, user wise)

Sample size : 55     Aug 2010:  
Online Survey among ISVs conducted by techcello using Google Forms

Benefits of Cloud Computing - User Perspective

Despite possible data security risks, cloud computing has some benefits that many organizations are certain to take advantage of. Let’s discuss about the advantages for each one (User, Service Provider, and Industry)

Benefits in User (Organization) Perspective:

Cost Effectiveness: With this model of deployment an organization can avail cost effective services.

Mobility: A user of an organization can access his information from anywhere.

Easy Upgrades: An organization can avail any new features or upgrades in faster time.

Flexibility: It allows much flexibility than traditional computing methods.

Easy Switch over: Having little expenditure involved in this model of computing, organization can easily switchover to other service provider for better service.

Allow IT team to shift focus: With this mode of computing, an organization doesn’t need to take care of any regular server maintenance issues. In turn they can concentrate on their innovation.

In coming post let us discuss the benefits in service provider perspective.

Usage Monitoring in Cloud Computing

To ensure adequate service levels and to avoid being overcharged for cloud services, there are tools to monitor and manage cloud usage. Public cloud applications and services like Sales Force, Amazon EC2/S3, Microsoft Windows Azure and others are now a critical part of computing infrastructure. For vital business services in public cloud environments, or spanning public clouds and data centers, a service provider should have a tool to provide a complete integrated view delivering the detailed quality of service metrics, alarms, usage of your monitoring environment and automation that allows to manage service levels and maintain up-time.

Growing demand for cloud infrastructure services (IaaS) in India

Latest trends shows the increasing infrastructure services boom in India, while all managed and co location data center providers started offering cloud infrastructure services and other companies seriously evaluating & acquiring all required hardware and software infrastructure to move into the cloud. The concept of "Pay as you go" & "pay as you use" is showing successful results in the market. In the other part of the world the companies like “Rack space” are generating good amount of money out of these services, Indian infrastructure providers are looking all possible ways to tap the Domestic and global markets.

Data centers named Ctrl S, ESDS and Net Magic started offering cloud services. In another case a largest Broadband services provider from India, Sify started offering cloud hosting in partnered with VMware virtualization platform.

Below mentioned is the software infrastructure for providing a complete suite of cloud hosting services with pre paid and post paid model billing and service delivery.

Virtualization Platform, Service Provisioning systems, Usage Monitoring tools, Usage Metering systems, Rating and Billing Platforms are the required software to offer complete cloud services suite.

Let us discuss about each platform in the coming posts.

India to lead world in cloud computing: Ballmer

Microsoft Corp sees India as the global hub for cloud computing, the concept of renting computing power that has taken the technology world by storm and in the words of the NYT, what Silicon Valley cannot seem to get its head out of.

“India will not only see a surge in cloud computing services but companies all over the world will look to India to support their transition to cloud computing,’’ Microsoft CEO Steve Ballmer said on Thursday.

The world’s biggest software maker is among a handful of companies betting big on cloud services, aiming to convince enterprises to give up building and managing data centres and switch to their computer capacity instead; the others being rivals such as Amazon, Google and AT&T as well as smaller firms like Rackspace and Terremark.

Microsoft believes India will move directly to the cloud, much like it bypassed the landline revolution that never happened and leapt to mobile phones, Mr Ballmer told a packed press meet. Mr Ballmer is in India to underline the importance of the company’s cloud services platform Azure, wherein people can use applications from email to payroll systems hosted online.

The transition that India will champion will seed 3 lakh jobs in five years, during which the business is estimated to grow to $70 billion, Microsoft said, quoting a study by Zinnov Management Consulting. Jobs will be generated in areas like cloud consulting, enabling software as a service, integrating offerings like Azure with IBM’s Blue Cloud or salesforce.com’s customer applications on cloud, and creating new applications.

For Indian businesses too, there is great potential, given that 30%, or $7 billion, of the global cloud computing work is to be offshored, said the Zinnov study.

Microsoft already has more than 600 customers for its cloud services, but wants a deeper head start over rivals after catcalls of playing catch-up in other tech fields have been growing louder by the day. Indeed, Mr Ballmer was speaking to reporters a day after Apple overtook his company as the world’s biggest technology firm in terms of market value, more than a decade after he took over its reins.

The company is, therefore, sparing no efforts in making its cloud computing push a success in India, a market that is “developing very nicely”, where “piracy is reducing and intellectual property protection is better than in China”. Mr Ballmer also noted that India is among the top five or six countries in terms of talent and market potential.

Microsoft said cloud is important in India as it is a catalyst for IT adoption. “We are successful at exporting IT services and talent. But when it comes to using technology domestically, we are quite poor,’’ said Microsoft India chairman Ravi Venkatesan.

There isn’t much use of computers and technology in schools, homes, government offices or by the more than 4 million small and medium businesses. More Info>>

Sify partners with VMware to deliver on-demand cloud solutions

Sify Technologies recently announced its partnership with VMware that will enable Sify to provide on-demand hosting (cloud) services to end-customers using the VMware vSphere 4 platform.

Sify has joined the global VMware Service Provider Program (VSPP), designed for service-providers who offer on-demand cloud services giving them the option to “rent” VMware software licenses on a monthly “pay as you go” basis. This model is aimed at helping Indian companies, both large and small, to safely tap computing capacity inside and outside their firewalls to help ensure quality of service for any application they want to run, internally or as a service.

P J Nath, Executive President, Enterprise Business, Sify, said, “This partnership will help us in making virtualized infrastructure available to a greater number of customers in a simplified way. For Sify to lead in the cloud service domain in India market, it was imperative to partner with a technology vendor who commands respect and has wider reach in secure virtualization initiatives, and VMware was our natural choice. Our partnership with VMware enables us to offer public, private and hybrid cloud to VMware customers for their Primary, Disaster Recovery (DR) or Business Continuity Program (BCP) proposition.”

The VSPP is a part of the VMware’s vCloud initiative which is designed to enable compatibility for all applications running in the cloud, whether on or off premise.

This partnership is aimed at helping Sify address the increasing demand for on-demand computing in India, which is one of the fastest growing cloud computing markets in the Asia Pacific region. Reference

TCS to bring the power of cloud computing to SMBs

Tata Consultancy Services (TCS), the country’s biggest software exporter, is ready to roll out what is internally being talked about as group chairman Ratan Tata’s next dream project. The company’s senior management has even called it the ‘Nano of IT’. The ambitious project, which is a ‘cloud’ offering, is expected to be launched mid-September, with the lofty aim of making information technology affordable to the country’s 35 million small and medium businesses (SMBs).

Developed by a 250-member TCS team, the cloud offering promises to lower the cost of ownership by 35-40%, compared with the traditional licensing model. Expensive capex investments required in IT will be converted into a monthly subscription model. Pricing per user for the entire IT stack will be Rs 8,000-10,000 per month. The stack includes hardware, networking and software. New customers will be locked in for three years, sources close to the development told FE.

The service is expected to be a major growth engine for TCS. FE has learned that executives have been internally talking about raising up to $1 billion a quarter in the coming years from the service, though it is early days yet. Initially, the focus will be on the domestic market, but the firm plans to take the offering overseas later. To begin with, TCS is confident of adding 100 customers every quarter or 400 in a year’s time.

Cloud services, delivered over the Internet, are an on-demand paradigm that can disrupt the way IT services are delivered today. Cloud computing uses virtualisation technologies and can potentially make an enterprise shed all of its IT assets one day — servers, storage, and applications can all be rented as per the requirement from cloud service providers.

The TCS service has been piloted with 75 customers and Ratan Tata is likely to review the project later this month. “We are checking with his calendar and trying to get a date for the launch in September,” a source said.

When officially launched, this would be one of the biggest cloud rollouts in the world, and perhaps Ratan Tata’s last big-ticket project before he retires in 2012 as Tata group chairman.

Read More>>

Agility and Flexibility in Rating and Billing

Cloud service providers should be capable of billing automatically based on any billing cycle. But one must not ignore the pains of a cloud service provider in calculating the usage of each and every customer, applying a specified rate plan, and generating a bill. So there should be a proper mechanism in generating a statement of account or invoice/bill.

Now the challenge here is, cloud service provider has to have a continuous watch on the usage consumption of its customer(s) which may prevent from significant revenue loss. Solution towards this is a Metering component, which integrates with cloud service providers database servers / control panel /virtualization platform to collect the usage detailed records (UDRs).

Does this accurate usage collection details really facilitate in generating usage based invoices/bills? In order to do so, a flexible rating engine should be in place to rate each individual service usage. Rating engine should allow service provider to comprehensively define different price rules and measure based on the usage. So rating engine should be extensible with no restriction on units of measurement, support flat and tiered (incremental) rating schemes and also support both the prepaid and post paid scenarios.

Following are the different rate plans a cloud service provider metering and rating system should support.

Volume based rate plan: Based on the total volume (e.g.: storage space) consumption, system should support incremental slab where price per unit varies. Depending on the total usage invoices are to be generated.

Time based rate plan: Any day of the week, day of the year and time of the day are considered in order to define different rate plans (Off peak, holidays, business hours etc). And based on these parameters the usage is been calculated and the bills are generated accordingly.

Billing: Invoicing/billing process will use the charges generated from rating engine i.e. discounts and tax calculation and posting them into accounts. Billing engine should also be flexible to support prorate rules while calculating the final invoice/bill.

Challenges of Usage Metering in Cloud Computing

Whose challenge is this ? Marketing team is coming up with innovative price plans, Sales is aggressive in acquiring customers, Technical team is provisioning services, Customer is availing every option of service extensively but end of the month, usage metering , calculation and invoicing !…..How do we do this? Is this a concern for every cloud computing provider ?

To have competitive edge and sustain in the cloud market place, cloud service providers are flexible in terms of their services, price plans or pricing structure which introduced the concept of Pay Per Use (PPU). But, one must not ignore the pains of a cloud service provider in tracking, collating and calculating the usage of each and every customer, applying respective rate plan, and generating a bill.

In addition to the usage based pricing parameters such as storage space, bandwidth consumption, computing cycles, number of users, modules, services, instances, downloads, alerts, hours etc, every cloud service provider has its own vertical specific usage based pricing charges e.g. in SaaS HRM vertical , they charge based on number of employees, or per month per user, Now the challenge here is cloud service provider has to have a continuous watch on the usage consumption of its customer(s) which may prevent from significant revenue loss. Alerting and allowing a customer on the usage limit (threshold) is again one such crucial business process. Cloud service provider follow a manual process or they have a tool in house developed to track such things. This exercise involves additional human resource or efforts to their operations .

Manual usage tracking is not much of a painful process for start-ups with less customers. However usage tracking process would become a challenging and painful process for the service providers with Large customer base. Hence cloud service provider should automate its usage tracking process and keep a weather eye on the individual customer’s usage consumption. This will reduce the revenue loss occurred in manual process.

eVapt has proven experience in collecting the usage records for cloud subscription service providers across the globe. eVapt has deployed its solution along with it’s Metering module which integrates with cloud service providers database servers / control panel /virtualization platform to collect the usage detailed records (UDRs). This will collect data that is in logfiles, databases or can run scripts written in Java to collect data. The Metering component in eVapt allows collections of multiple usage type and accurate processing of the same. This will plug the loss of revenues through accurate usage collection and processing.

Dynamics of Cloud service plans and pricing

“Pick what you want” is the mantra that made cloud service providers to stay ahead in the competitive cloud arena. The “On-demand” services offered by cloud service providers are now more dynamically availed by customers. Based on the usage analytics, cloud service providers have to offer new exciting plans to keep customer happy and to get competitive advantage. To meet such requirements of the market dynamics, cloud service providers have to come-up with new promising plans that enhances customer stickiness, sign-up for long term contracts and engages them to avail services continuously.

Service providers are more competitive in offering modular packages such as Bronze, Gold, Platinum with additional services topping on the higher packages and Pay as you go services in order to suffice the market requirement. Though services are offered across the globe, they should support local currencies or a single standard currency.

Service provider system should have the option to scale up and scale down the services with respect to the market. Flexible service plans such as region and customer specific packages, dynamic pricing, lower monthly fixed plus usage based charges, long term contracts exclude or include different tax rates and support based services are few important factors which enhances the customer acquisition rate.

A service provider system should be flexible enough to allow customer to avail the service, even after exceeding the usage limit and charge them on the overages rather than terminating the service. This results in less efforts in customer retention process and more concentration of customer acquisition .

Some more scenarios where service provider’s system should support.

• Automates in changing the customer package on a future date.
  
• Override the existing price and define a new price for the same price plan.

Customer acquisition process in cloud computing services

As we all are familiar that, Customer acquisition is one of the important phases in the business process. There are certain best practices to increase the customer acquisition rate and reduce churn. Streamlining customer acquisition process will boost the sales of any cloud service provider.

1. Trial Sign-up Process:

Cloud computing enabled users or end customers with Try & Buy model which gives an option to sign up for a Trial period, evaluate and go for commercial contract. Cloud service provider should have a system in place which allows them to define a trial plan and activate their access. The system should automate the life-cycle of a Trial User such as trial plan activation, providing limited/controlled access to the service, deactivation of the trial services based on the trail period expiration.

2. Effective follow-up :

Cloud service provider should communicate to its Trial Users effectively in advance to convert them into Paid Users . Sending regular communications will help in keeping the trial users in engage and explore to the additional & attractive services by opting for the paid subscription which will result in maximizing the cloud service provider’s revenue.

Cloud service provider should have a system which provide the list of Trial Users whose access is about to expire . System should send regular communication on the account expiry date and other promotional service offerings.

3. Contract sign-up & tailor made plans

It is very challenging activity for cloud service provider to sign-up a commercial contract with its customers. In addition to the plans or packages offered by cloud service provider, customers will have their own plans, service requirement and contract terms during contract negotiation. Cloud service provider should meet their customer requirements by singing up tailor made contract. Cloud service provider system should be able to define flexible service packages, plans, pricing & contract terms.

Cloud Service providers should provide customers, the choice to utilize their preferred services. Which not only reduces the churn rate substantially but also retains high value and profitable customers. With this, service provider can experience increase in overall organization profitability. Cloud service providers should have a Business Support System and Monetization platform, which streamlines the above discussed customer acquisition process.