Forefront Communications

Global Fintech Series: Fighting Against the Faux-Cloud: Why Firms Need Multitenant Systems for a Truly Modern Technology Strategy


This post was written by LiquidityBook CRO, Sean Sullivan.

For the buy and sell sides alike, COVID-19 has only accelerated the need for a more modern technology strategy. The pandemic has wreaked havoc in both the markets and the wider world, putting a spotlight on the need for more nimble, scalable solutions that allow their businesses to pivot quickly in a crisis situation. Home office setups and remote business operations may be here to stay for a while and will certainly change the paradigm of what is commonly referred to as BCP: business continuity planning.

Having said that, at LiquidityBook we respond to a very common question almost daily: “Are you a cloud-based solution?” Of course, our response is yes, but what firms should really be asking is whether we are a multitenant cloud-based solution. The lack of understanding of the importance of multitenancy has led to major misconceptions about the trading technology space as it exists today.

First, we need to define our terms. Multitenancy is a software architecture in which a single instance of the software provides a service for multiple customers, or “tenants.” As such, the concept of upgrades, version management and time- and materials-based revenue billing does not exist. In the case of LiquidityBook, we are a cloud-based, multitenant SaaS solution.

On the other side of the coin, there has been a proliferation of legacy platforms that have been repackaged and labeled as “cloud-hosted.” In reality, these providers are using the same old product with the same code base, which is simply lifted and shoehorned onto any hosted facility that makes it accessible remotely. These “cloud-hosted” systems transport the current state of the version to a hosting provider — so, each install is still unique to a particular client based on its install version, patch, stored procedures, et cetera. Over time, the numerous versions, localized customizations and patch releases get in the way of progress. The market rightly regards SaaS and the cloud to be important concepts, but now legacy players are using those terms to promote themselves without addressing the underlying issues that multitenant cloud deployments alleviate. Look past the jargon and you will find these legacy systems are still incredibly inefficient, especially in this environment. The issues of managing an individual install do not necessarily go away, they simply change location.

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