Single-Tenant vs. Multi-Tenant Applications: How to Choose

When a Software-as-a-Service (SaaS) application is ready to move from the initial product (MVP) to a scalable cloud-native architecture, one of the key decisions solution architects and technology leaders will have to make is about tenancy.

More specifically: Should you choose a single-tenant or multi-tenant application?

The most successful tech businesses those in which application architects understand that technology is an extension of the business model. In that sense, a tenancy decision is more a business-driven decision than a technology-driven one. You should consider the context of your business itself, the product usage or revenue expectations and any regulations that companies must comply with. (Also read: 10 Strictest Data Privacy Laws By Country in 2022.)

Single-tenant or multi-tenant architectures are both viable options to consider. To help you decide between them, let’s weigh up their distinct security and privacy implications, costs, accessibility, and ease of use:

What Are Single-Tenant Applications?

Single-tenant applications are comprised of an architecture where a single tenant, or customer, is served by a single instance of the software application and its supporting infrastructure.

The tenant has a dedicated instance of the database, dedicated server(s), separate interactions and separate access rules—which are collectively kept completely independent from any other tenant.

What Are Multi-Tenant Applications?

Multitenancy is an architecture in which multiple customers are served by a single instance of the software and its supporting infrastructure. Each customer shares the software application and tertiary applications. Based on the specific architecture, business needs and regulatory/security requirements, multi-tenant applications may separate each tenant’s data in one or more of the following ways:

Logical separation.
Schema-level separation.
Physical isolation.

There are many aspects of building multi-tenant applications to consider and almost all involve complexity. For instance:

Multi-tenant applications involve more security and compliance-related considerations to assure a high level of data privacy, breach resilience and regulatory compliance. (Also read: Massive Data Breaches: The Truth You Might Not Know About.)
Performance must be managed carefully given that the tenants share server resources.
The features and models in a multi-tenant solution must be designed to be highly configurable so users can make the application perform the way they want.
Application features must be consistent across all tenants as there is no easy way to change the code or data structure for a specific tenant.
If the application is reliant on integrations with other SaaS products/application programming interfaces (APIs), one issue can impact all users.
Multi-tenant applications require careful handling of domain name system (DNS) configurations, token management and white labeling.
To deploy updates to specific tenants requires the implementation of multiple servers with specific DNS for target customers.

Regardless of the type of data isolation you’re using—logical separation, schema-level or physical isolation—multi-tenant architectures require greater expertise and development capability. There is the risk that a certain customer’s data may be exposed or compromised via another tenant’s use of application data.

Each update must be tested thoroughly for data security and isolation, performance, security and compliance. Multi-tenant architecture can be a powerful business propeller with a capable team and infrastructure setup.

Single-Tenant vs. Multi-Tenant Cloud Applications: Which Should You Use?

Many considerations go into multi-tenancy-related architectural decisions, such as discovering the target customers and the regulatory bodies that govern the data storage and security requirements, analyzing the revenue expectations from each customer, and reviewing the volume of customers.

As such, a final decision requires expert insights and careful planning. Whether a single-tenant or multi-tenant application is best for your business will depend on factors such as the number of clients you cater to, your business model, whether you serve clients in highly regulated industries and if you serve clients requiring physical data separation.