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FundGuard Tech Talk: The Benefits of Multi-Tenant Software

In this latest post from our FundGuard Tech Talk series, our CTO, Yaniv Zecharya, talks about multi-tenant software architecture and the related capabilities. 


What is Multi-Tenant Software?


FG: In our recent Partnership Ecosystem discussion, the topic of multi-tenant software came up briefly. Can you give us a more in-depth definition of what multi-tenant means and how it fits into investment accounting? 


YZ: Multi-tenant is a software architecture that uses a single instance to serve multiple clients (“tenants”). 


This architecture offers a unique deployment method that enables all clients to benefit from software updates while maintaining the customization needed for each client’s specific purposes. 


Traditionally, single-tenant architectures have been used to perform deployments and software updates. In a single-tenant architecture, each client is given a private software instance used by no other clients. 


Compared to single-tenant architecture, the multi-tenant approach offers several key benefits that can improve an investment accounting system. 


For instance, when a software-as-a-service (SaaS) provider — such as FundGuard — uses a multi-tenant architecture, it can greatly streamline computation costs and requirements, making it much simpler for a SaaS provider to carry out updates and deployments efficiently for their clients. 


Why is Multi-Tenant Architecture Advantageous?


FG: You’ve noted that multi-tenant architecture can be more cost-efficient and streamline operations for software providers in general, but what are other benefits to providers and clients alike? 


YZ: Investment accounting can be a particularly tricky area of operations for asset managers to handle independently, leading many to work with various partners to handle their investment accounting needs.


From the perspective of a client receiving an investment accounting solution from a third-party provider, multi-tenant can be the key missing puzzle piece to putting together a highly effective digital platform that can operate in real time with the most up-to-date data and resources. 


When using a multi-tenant architecture, it is possible to make all operational efforts much more highly focused. This can include everything from maintaining the environment and deploying new code to monitoring accounting activities and improving SLA. 


All these advantages ultimately impact end-users as well. Multi-tenant architecture ultimately provides a win-win scenario where back-end providers can reduce costs and boost efficiency, while clients can gain new opportunities for growth and optimization through the shared instance within the architecture. 


How Does the Multi-Tenant Model Build Value for All Clients?


FG: When you say that multi-tenant can provide new opportunities for growth and optimization for organizations, how exactly is this made possible? 


YZ: When talking about the new opportunities that a multi-tenant architecture can provide to custodian organizations, it all comes down to the availability of features and capabilities. 


Multi-tenant allows for all clients within an instance to gain access to new updates and features as they occur. For example, if a large organization were to ask for a specific customization, once deployed, that customization option would become available to all clients within the instance.


This is an incredible advantage for all organizations but especially for those operating on a smaller scale. Where single-tenant architectures may deprive smaller-size enterprise clients of the chance to access the same features and applications of a larger company, multi-tenant provides all clients with access to those exact customization options as soon as they are ready for deployment. 


This approach offers a tremendous amount of new business value by way of software that can optimize your operations while also simplifying investment accounting and other administrative tasks. 


What Happens to Customization in a Multi-Tenant Environment?


FG: In an environment where all users have access to the same set of capabilities and updates, does that have any negative impact on a client’s ability to customize the software they receive for their platform?


YZ: It is somewhat common to hear the question of whether multi-tenant renders customization pointless.


The short answer is no, multi-tenant does not inherently inhibit customization for end-users. Although everyone within a multi-tenant instance has access to the same deployments, not all deployments are well-suited to each individual client’s use case. As such, clients have the ability to opt out of any deployments or updates that they do not feel are beneficial to their business specifically. 


However, even if a particular deployment is not of great use to certain clients, those clients can still use that deployment as a jumping-off point for determining what types of future deployments and improvements they would like to receive.


Keeping clients within the same instance enables the multi-tenant provider to stay focused on finding innovative solutions to specific client feedback. With deployments available to all within an instance, this feedback is transformed into high-value information that can produce an update or newly created capability that has benefits to offer to everyone. 


Additionally, when you have access to such a wide range of capabilities, it is exceedingly rare to encounter two clients with identical deployments. Instead, what you end up with is an array of different deployment configurations that reflect the distinctness of each client. 


Is a Cloud-Native Infrastructure Necessary for Multi-Tenant? 


FG: We always like to keep our tech talks centered around and relevant to cloud technology — can you discuss the relationship between a cloud-native infrastructure and a multi-tenant architecture?


YZ: Multi-tenant architecture was born out of advancements in technology that have allowed software professionals to slowly but surely migrate away from legacy systems.

Cloud technology is without a doubt at the forefront of today’s technological advancements, with a cloud-native infrastructure providing many benefits that on-prem and even cloud-enabled businesses cannot. 



Product Halftone


Need a refresher on how cloud-native and cloud-enabled differ? Read our blog post, Cloud Enabled vs. Cloud Native: Know the Difference. 





On a broad level, a multi-tenant architecture does not require a cloud-native environment to operate. 


However, cloud-native environments can greatly enhance the operational efficiencies provided by the multi-tenant architecture, making the two an exceptional pairing within an organization’s tech stack. 


One major example of this is the robust access controls and data encryption capabilities that a cloud-native environment can provide. Cloud-native technology can work closely with artificial intelligence (AI) and machine learning (ML) to create a secure environment that leverages real-time data to keep all records, reports, and regulatory requirements up-to-date on the most current data. 


At the end of the day, a cloud-native infrastructure is not a necessity for adopting a multi-tenant architecture. The key to remember is that both of these technologies are centered around custom digital experiences that are as seamless as they are efficient. In turn, this makes them highly compatible with one another in a way that legacy technologies simply cannot compare. 


FundGuard’s Multi-Tenant Capabilities for Investment Accounting


At FundGuard, our entire cloud-native platform is built around providing the most value to our clients. 


Investment accounting has historically been a cumbersome process in which collaboration is limited aside from the exchange of data. FundGuard is working to change that by providing asset managers and their service providers with a new era investment accounting utility.


As part of this utility, FundGuard leverages a multi-tenant architecture to give clients the best opportunities to participate in advantageous deployments. Plus, FundGuard also uses a blue-green deployment method that ensures your platform’s functionality is always in good working order, even as new capabilities are being tested and deployed simultaneously. 


Partnering with FundGuard is your best route to creating a single source of truth for all your investment accounting tasks and for unburdening yourself of outdated legacy systems that are inhibiting innovation. 


Contact the FundGuard team to learn more and request a demo.