Multi-Tenant Deployment Is Not Popular With EH&S Budget Holders – What Should EH&S Software Vendors Do?
Vendors of multi-tenant software have a lot of educating ahead of them to convince EH&S professionals that it’s the best option. Only 1% of 301 EH&S budget holders surveyed by Verdantix prefer multi-tenant software hosted in the public cloud compared to 33% who prefer on premise deployment. Sixty-three per cent of respondents consider multi-tenant product architectures to be unacceptable for EH&S software and a further 15% don’t have an opinion, making a whopping 78% who are either opposed to multi-tenant or don’t know enough to prioritize it.
Why is this opposition to multi-tenant deployment a challenge for EH&S software vendors? Many of the recent private equity investments in the sector are predicated on shifting the deployment mix from on premise and single instance hosted to more profitable multi-tenant. If customers are slow to warm up to new multi-tenant offerings it will disrupt investors’ plans to exit from their EH&S app investments in the typical four-year time horizon. A vendor’s decision to push for the stronger economics of the multi-tenant model is likely to result in lower growth rates due to the lack of customer interest. What’s more, mid-market customers with revenues of less than $1 billion are not significantly more likely to buy into multi-tenant technology propositions.
Software vendors can dodge the multi-tenant bullet with three strategies. First, pitch business benefits not the underlying technology architecture. EH&S decision-makers are technology laggards and the issue of the product architecture doesn’t need to be discussed unless IT gets deeply involved in the procurement process. Secondly, always present multi-tenant apps in the context of lower upfront costs, lower quarterly payments and hosting costs. In the European market, costs are items two, three and four on the list of the most important buying criteria, implying that buyers opposed to multi-tenant architectures can be persuaded to go with multi-tenant due to lower costs. Thirdly, articulate the benefits of more rapid improvements in user interface design and more powerful configurability offered by multi-tenant systems which are constantly updated for all customers. Buyers rate user interface quality as the most important purchase criterion.
To learn more about the different EH&S deployment options and real world usage examples, attend the Verdantix Summit, ‘'Achieving EH&S Excellence With Innovative Technologies’’ taking place at the JW Marriott in Houston from May 15-17, 2017.