Multitenancy: The Odd Sounding Cloud Tech Term that Changes Everything for Financial Services Firms

“Think of an ice breaker ship ploughing through frozen seas and that will give you some idea of what multitenancy is doing to the old IT model,” says Navatar CTO Rexlo Joe, who Salesforce recently featured as a success story.

Multitenancy is a architectural design in cloud systems, which allows the vendor to share resources between clients. It allows the vendor to eliminate mundane, repetitive tasks and focus their time instead on adding new features.

Not all cloud products are multitenant, though. A legacy vendor with an on-premise product never invests in multitenancy since that involves developing a completely new product and a new business model. It is much easier for them to turn their legacy system into a single-tenant product (each customer is hosted separately).

“If you’re not buying a multitenant product, you’re buying a product that will be frozen in time, while your competitors will always have the latest technology,” says Joe.

He joined Navatar shortly after graduating from Fairleigh Dickinson University and runs the Navatar technology team. He is the brains behind the architecture of Navatar’s financial services cloud solutions.

Multitenancy is a key element driving that competitive advantage. Navatar’s multitenant architecture means that clients are always working on the most up-to-date version of our cloud-based services, with features added regularly that directly address our clients’ needs and requests. This is in contrast to the single-tenant cloud solutions, which never get upgraded because all of the vendor’s focus is on maintaining infrastructure.

Joe says one way to understand the value of multi-tenancy is to think of apartment dwellers benefiting from a common furnace in their basement.  The alternative would be to supply each apartment with its own dedicated furnace. That would be enormously costly and inefficient, yet it is the “fake” cloud model still maintained by many today, he said.

“We craft Navatar’s highly specialized financial products to take advantage of the economies of scale and efficiency that multi-tenancy enables,” Joe says. Although the technology is shared, the data is securely separated for Navatar’s 500+ clients who are regulated by the SEC and must adhere to strict security standards for running firms in areas such as private equity, M&A, wealth management and hedge funds.

He advises financial firms to make multitenancy a threshold requirement when considering new cloud technology solutions.