Is Multitenancy a Prerequisite for Cloud Computing?

I think the answer varies by perspective. For example,

1. The cloud provider would want to maximize multi-tenancy to realize economies of scale and maximize revenue from a fixed set of assets (hardware, software, infrastructure, etc.)

2. The cautious consumer would like to minimize multi-tenancy with the most obvious reasons being security, privacy, and performance.

3. Vendors who make money from selling on premise software and hardware would like to minimize multi-tenancy to preserve their revenue streams.

Hmmmmm... I think my answer boils down to "It depends."

I don't think so but multi-tenancy is definitely a prerequisite for SaaS. Cloud Computing is much broader concept and multitenancy is only one of the approaches applicable in the cloud. I would actually argue that most apps in the cloud today are single tenant dev&test applications.

In a Service model (software,platform,data) I would have to say yes; just in terms of simple economics (costs and revenue) in a cloud environment. With that said; I think that applies more to an application vendor servicing both customers and partners.

There is applicability today in utilizing cloud scaling for processing big data, sandbox development, or internal application migration that doesn't really require multi-tenancy. The same economics of scale apply in these cases as well.

Multitenancy is not a prerequisite for Cloud Computing. Most of multitenant systems tend to use isolated tenancy at the data layer. Multitenancy is a method to achieve better economic benefits for the provider in terms of better margins. However you could get some of the same benefits using virtualization and effective use of infrastructure layer. Cloud and Multitenancy is more like a icing on the cake for the CFO of the provider.

I think closer to the mark would be: Is multi-tenancy required to make money in cloud computing...or to to fully realize the benefits of cloud computing?

The main benefit of cloud computing (and SaaS) is lower cost through economies of scale from shared infrastructure.

(see for example: http://chaotic-flow.com/saas-model-economics-101a-aggregating-customers-for-low-cost-advantage/ )

Multi-tenancy is simply a means to that end. The real key is to share the infrastructure in as automated a fashion as possible, otherwise your economies-of-scale are killed by direct labor costs.

You can quibble about storage space and processing capacity optimization using full database multi-tenancy. But, the reality is that storage and processing are cheap, whereas people are expensive. Multi-tenancy might be optimal for your application, or maybe virtualization is better, or whatever...it is automation that is essential...to make money in cloud computing.

I used to think that multitenancy was a key incentive for Cloud Computing. The experience of the last couple of years leads me to a different view. The Cloud makes IT more ubiquitous, but multitenancy is far from being ubiquitous – so most of the services offered in the cloud are either not multitenant or use some kind of shared-hardware scheme (virtualization). So far there seems to be more cloud computing capacity than there is a demand for it – so the improved resource usage aspect is not so important. I also see that many enterprises adopt the Cloud advantages for their own software, for example rolling out core enterprise applications as RIA’s to their extended ecosystem partners and thus streamlining the supply chain and reducing costs.

My conclusion is that multitenancy is more of a future feature that would emerge when the economy would mandate it. So my recommendation is to adopt application platforms that enable multitenancy and develop future applications as such, and in the meantime take advantage of the Cloud using pragmatic approaches.

Multi tenancy is not a desirable from deep pocketed quality and security oriented consumer (enterprise) point of view. In fact, such consumers will be delighted if the Saas does not offer multi tenancy. Who will like to share an apartment with another tenant given a choice to occupy it alone? However economics also plays a vital role here. When we share an apartment, we pay less rent. If the consumer is value oriented (SMB) and not so much paranoid about its intellectual property, customer base etc. information; then they will love the economy of this approach.

I consider multi-tenancy is a feature, contingent on the market segment the Saas will be targeting.