CPQ and Multi-Tenancy: Why It Is So Important

Have you asked about multi tenancy in your CPQ vendor research?

Have you asked about multi tenancy in your CPQ vendor research?

Ever wondered how Salesforce.com has been able to scale and grow to a multi-billion dollar companies in less than two decades? What is their magic?

Well, according to a presentation to developers at Dreamforce in 2014, one ingredient of the company’s secret sauce is its multi-tenant architecture.

Coined as “at the core” of their customer-success mindset, the platform’s multi-tenant setup allows business using Salesforce.com to move and grow quickly.

According to the company’s website, “how do we do it? One word: multitenancy. 

“Salesforce’s multitenant architecture is essentially a shared utility, so we can optimize computing resources across all our customers. While a traditional single-tenant application requires a dedicated set of resources to fulfill the needs of just one department or organization or company, a multitenant application uses the same amount of resources to satisfy the needs of multiple 'tenants.' The result: incredible savings.”

While not the most exciting part of software research, understanding the way the software is architected can help you determine which is best poised to truly help your business scale. 

Like Salesforce.com, Endeavor’s Configure-Price-Quote (CPQ) software is also built on multi-tenant architecture.

Multi-tenant architecture has several key benefits:

Efficiency and sustainable scalability: According to Larry Aiken, with multi-tenant architecture, software providers have the ability to ensure the lowest cost of service delivery. Since essentially no new software resources are required for each incremental customer, the cost of on-boarding a new customer begins to approach zero at full scale, resulting in ever-increasing marginal revenue associated with each new customer.

Ongoing maintenance and updates: New features and updates are included with a SaaS subscription and are rolled out by the vendor.

Configuration can be done while leaving the underlying codebase unchanged: Since on-premises applications and single-tenant-hosted solutions are often customized, it is costly and requires changes to an application’s code. Customizations can make upgrades time-consuming, because an upgrade might not be compatible with your customization. 

Most multi-tenant SaaS solutions, like EndeavorCPQ, are designed to be highly configurable so that businesses can make the application perform the way they want without changing the underlying code or data structure. Because the code is unchanged, upgrades can be performed easily. (Interested in reading more about multi-tenant benefits? Check out this Forbes article.) 

If your business priorities surround growth and scalability, selecting a multi-tenant CPQ provider makes sense. To learn more about Endeavor’s architecture or how CPQ can improve your business, please schedule a demo.  

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