I hope you enjoyed Part 1 of this series, or saw my talk at SharePoint Saturday DC recently. If not, please go back and read Part 1 at the link below.
This 7-part series consists of the following:
Part 1 – Should we host on-premises or with a provider? (Can we do both?)
Part 2 - Do we need a dedicated solution, or is multi-tenant going to work for our needs?
Part 3 - If we make the leap, what do we lose? What do we gain?
Part 4 - What questions should we be asking potential providers?
Part 5 - Who are the leading providers?
Part 6 - How do we select the right provider for our unique needs?
Part 7 - How do we make the business case internally?
Enjoy!
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Part 2 – Do we need a dedicated solution, or is multi-tenant going to work for our needs?
When you’re considering outsourcing the hosting and management of SharePoint, you’ll quickly discover that a key decision to make is whether you can live with the constraints of a multi-tenant solution, or if you require a dedicated solution. Or perhaps some kind of hybrid.
Just to make sure it’s clear what I’m talking about, let me clarify what a multi-tenant solution actually is.
“Multitenancy refers to a principle in software architecture where a single instance of the software runs on a server, serving multiple client organizations (tenants)…
“With a multitenant architecture, a software application is designed to virtually partition its data and configuration so that each client organization works with a customized virtual application instance…
“Multitenancy is contrasted with multi-instance (aka “dedicated”) architecture where separate software instances (or 
hardware systems) are set up for different client organizations.” (Source: http://en.wikipedia.org/wiki/Multi-tenant )
Is there a 3rd option? Of course! Isn’t there always?
That same wikipedia article goes on to say “An increasingly viable alternative route to multitenancy that eliminates the need for significant 
architectural change is to use virtualization technology to host multiple isolated instances of an application on one or more servers.”
Fortunately, you can definitely choose an option that works for you from among these choices.
In the case of SharePoint, there are several vendors, including Microsoft themselves, that are offering SharePoint in a hosted multi-tenant model. This would mean literally that your organization would be sharing an instance of SharePoint with one or more of your provider’s other customers. Microsoft calls this model SharePoint Online Standard (it also includes the SharePoint component of BPOS, Microsoft’s so-called Business Productivity Online Suite).
First of all, MOSS 2007 didn’t actually have a good story around multi-tenancy, so it required some serious hacking of the underlying SharePoint source code (an obvious no-no for anyone but Microsoft themselves, if even they should have been doing it) to get it to work, unless you simply set up a farm and assigned individual site collections as “tenants,” or something along those lines. This was far from a perfect scenario for a number of reasons.
Secondly, depending on how you are using SharePoint and what kind of compliance standards or other requirements your organization must comply with, you may find that sharing not only infrastructural components, but also the instance of SharePoint itself is simply not acceptable. For example, as rigorous as Microsoft has been with testing SharePoint, in a multi-tenant hosting environment, there exists the possibility, however slight, that a flaw could be detected and exploited, and that could have an effect on your system and/or your data. However minimal the chance may be, using a dedicated database and dedicated instance of the application is a sure-fire way to eliminate this particular risk.
Third, there were and still are significant trade-offs in features and customization flexibility – or the lack thereof -- that would tend to eliminate some of the benefit the supposed savings offered by multi-tenancy in the first place. That is, buying SharePoint in a multi-tenant fashion because it’s cheap might mean you are prevented from doing some of the very things that could transform your business if SharePoint were to be used to its full potential.
Then, there is the fact that even now SharePoint Online does not provide SharePoint 2010 at all, let alone full-featured SharePoint 2010. It will be late 2010 before SharePoint Online is upgraded to SharePoint 2010, and as much as another year or more before it becomes “full-featured” SharePoint 2010. If you want SharePoint 2010 right now, this simply is not an option for you.
And in case you’re wondering, any other provider offering multi-tenant SharePoint is most likely using the same multi-tenancy features and capabilities that SharePoint Online is using, AND/OR they have custom-crafted some sort of multi-tenancy capability of their own. All well and good, but in the latter case, if Microsoft updates the core bits as they must do over the next few months and years, the provider you are working with has to be very sharp on keeping their customizations up to date, or you run the risk of suffering the consequences.
Generally, you and/or your organization are going to fall into one of two schools of thought when it comes to multi-tenancy.
The first school says, despite all the considerations, and despite the inherent limitations and constraints of multi-tenancy with SharePoint, we can’t overlook the low cost of the multi-tenancy approach. If you’ve really thought it through carefully and you are truly confident that you’ve made the right choice for your business, good for you. Have at it.
The other school of thought, however, is going to decide that they need to focus on a dedicated application instance of SharePoint.
Maybe you need SharePoint 2010 for its Social Networking features, or for the Business Connectivity Services, or some other feature-based reason, and waiting for SharePoint Online to catch up is a delay that simply won’t align with your funding calendar.
Maybe there’s just too much risk in a provider’s customized method for achieving multi-tenancy in MOSS 2007.
Whatever the case may be, it is important to keep in mind that ruling out multi-tenancy and making the decision to go with a dedicated SharePoint solution does NOT mean that you are forced to go with a strictly on-premise solution.
It is possible to run a dedicated instance of SharePoint (2007 or 2010) right now in a number of hosting scenarios, ranging from utility computing, to co-lo to fully managed application models.
If you’ve decided to focus on a dedicated instance of the SharePoint application itself, then you need to consider whether you require fully dedicated infrastructure and physical servers, or if there are elements of the infrastructure that can be part of a utility or shared infrastructure platform, in order to get more value at those levels.
For example, if you go for fully dedicated hardware, you’re going to have to purchase enough horsepower to handle your anticipated peak loads. This may include clustering the database, allocating more RAM and CPU that needed, purchasing powerful host machines on which to deploy virtual machines, etc.
But if you opt for a platform that offers dynamic scaling capabilities, you can right size your environment for current demand and grow as needed, including bursting for spikes, and pay for only what you are actually allocating or using, depending on the pricing model offered by your provider.
One very attractive option that I see more and more customers looking at, is what I’ve most commonly called “Multi-tenancy in a Private Cloud.” This is a scenario where the customer organization (such as yours) purchases a dedicated application instance, and then activates multi-tenancy in SharePoint 2010 in order to provision tenants corresponding to their internal business units. This is very attractive as a method for facilitating some sort of chargeback model where the business units pay IT for the computing resources they consume, but this approach is still constrained in many of the same ways that traditional hosting multi-tenancy is, as noted above.
Can you live with SharePoint multi-tenancy as it exists today? Can you wait for what it may become later? Or does it just make more sense to work with a provider to stand up a dedicated instance for your organization? 
There is arguably no more significant decision that you have to make when deciding whether or not to outsource the hosting and management of SharePoint. Make this decision carefully.
Coming next…
Part 3 - If we make the leap, what do we lose? What do we gain?
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