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What is a Multi-Tenant Digital Platform?

Times have quickly changed over the past 20 years. Core aspects of computer systems have changed radically in the past 20 years and that growth has accelerated over the past five years.

Let’s take a look at these core changes and what they mean for the digitalization of global trade. We are calling these big changes a Multi-Tenant Platform. Over the next several weeks we will take a look at the Multi-Tenant Platform concept and how it not only represents the most efficient structure but will be the underlying software model well into the future.

First, the capacity of the servers is unrecognizable from what it was 20 years ago. At that time, large companies had to buy large and expensive servers on each continent in order to power their office networks. Today, we have massive Cloud-based entities such as Amazon Web Services, Microsoft Azure, and Google. As an example, Amazon needed such massive computing capacity to power its e-Commerce Market Place and developed a completely new business unit called Amazon Web Services . Thousands of companies have since shifted away from owning their own server networks and now ride on the Amazon Web Services Cloud at a fraction of the cost. And, in a funny twist of names, the cutting-edge set ups are called “Serverless” systems.

This represents the first aspect of a multi-tenant platform; multiple companies running on the same platform, yet all securely separated with virtually unlimited power to expand as their business grows.

There are software providers like Trade Tech who provide simultaneous services to thousands of customers around the world. Some customers buy specific services from these Software as a Service (SaaS) providers and others run their entire business on these platforms. Each customer’s data is securely separated one from the other, but all parties take advantage of the full SaaS functionality.

Imagine a time in the near future where parties on different platforms can share data and work together as well as work separately, or with other parties, when their business relationships necessitate either option. Picture a large apartment building where everyone has their own apartment and use shared services such as the elevator, plumbing, heating and air-conditioning but have their own living quarters. They can live separately from each other but sometimes they might want to have a dinner with their neighbors and then go back to their own apartments after the dinner.

Next, the trading platform establishes connections with major institutions representing a core part of international trade like the Customs Agencies, as well as major ocean and air carriers, or large railroads. These connections are not easy to set up and they each have their own set of technical requirements. The platform users can immediately utilize these connections upon moving in without having to expend the effort to build each individual connection. This will become a bigger advantage to the tenants as the integrated network grows.

One last aspect to consider in this first of the series stems from the old adage that many heads are better than one. Different “tenants”, or customers on the platforms, have different requirements and / or different ideas and concepts. Each one contributes to making the overall functionality better, more diverse, and more fine-tuned as they work with the provider individually to refine the system functionality to meet their individual requirements.

The leverage provided by this multi-tenant community approach will be difficult to compete with by the traditional stand-alone siloed solution. This is very similar to the advent of electricity 120 years ago as the electrical networks were beginning to be established.

If you’re interested in reading more on the topic, please refer to the “End of Corporate Computing” by Nicholas G Caar from the Spring 2005 MIT Sloan Management Review.

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