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Avinash Bendigeri Avinash is a developer-turned Technical writer skilled in core content creation. He has an excellent track record of blogging in areas like Docker, Kubernetes, IoT and AI.

Multi-Tenancy: What is it and Why Do You Need a Multi-Tenant Architecture?

5 min read

SaaS applications have become increasingly popular nowadays. Many software providers are looking for ways to deliver their product as a service. In this case, building multi-tenant architecture for a SaaS app appears to be the wisest solution.  

Multi-tenant architecture has gained a lot of attention in recent years as more and more businesses adopt cloud computing technologies. It can provide many benefits, including cost savings, scalability, and easier maintenance. 

In this article, we will explain what multi-tenant is, what are its advantages, and why you may want to consider adopting a multi-tenant architecture for your business applications.

What is multi-tenancy?

Multi-tenant architecture is a software architecture model where a single instance of a software application serves multiple clients (also known as tenants). In simpler terms, multiple customers of one cloud vendor share the same resources. However, the data and configurations of each customer is separated from the other. Multitenancy is a fundamental element of cloud computing.

To understand what multitenancy is better, think about co-working space that offer separate spaces to multiple users. Each user has its own private area, and they can customize it according to their needs, but they share common resources such as printers, internet connectivity, and conference rooms. This is similar to how multitenancy works: each tenant has its own isolated data and configuration, but they share common resources such as servers, databases, and network infrastructure.

A lot of widely used, world-known services use multi-tenant architecture: HubSpot, Netflix, Salesforce, and others. The users of this service share the application and have access to one database. This is what’s called multi-tenancy.

Single-tenant vs multi-tenant architecture: the difference

When creating your SaaS application, you get to choose between two tenancy models: single-tenant and multi-tenant. This choice has a huge influence on the amount of resources needed to maintain the application, scalability, and app’s complexity.

In a single-tenant architecture, a single instance of a software application serves one client. This instance is isolated from other clients. The top advantages of a single-tenant architecture are a high level of control and security. However, it’s a complex and expensive type of architecture as the user needs to configure its own instance. It also limits scalability and flexibility. 

In a multi-tenant architecture, one instance serves multiple clients. Although these tenants share the same features, they are isolated from each other for safety reasons. This way, all customers can see only their own data. This model is known for its cost-effectiveness, scalability, and simplicity (we will talk more about the benefits of a multi-tenant architecture later on). However, it’s not as reliable in terms of security as a single-tenant architecture.  

Let’s look at the difference between single-tenant and multi-tenant architecture on such an example: when you sign in to the Salesforce website, you use the same instance of the Salesforce app as any other Salesforce client. This is different from a single-tenant architecture in which separate instances of the software serve different client organizations.

Three types of multi-tenant databases

Here are three types of databases in a multi-tenant system. 

  • Shared Database. In a shared database model, all tenants share the same database, but their data is separated from each other. Each tenant has its own schema and its own set of login credentials to access its data. This approach is simple and cost-effective, but it can lead to performance issues and security risks if not properly managed. 
  • One schema per tenant. In this model, each tenant has its own schema within the same database which provides better isolation and security than the shared database model. This approach offers better performance and scalability than the shared database model, but can be more complex to manage. 
  • One database per tenant. In this model, each tenant has its own physically separated database instance which can be hosted on a shared or dedicated server. Each database instance has its own set of physical resources, such as CPU, memory, and storage, and is completely isolated from other tenants. This approach offers the highest level of security and isolation, but is the most expensive and complex to manage. This model is often used for applications that require a high level of customization and data isolation.

These three types define ways on how to architect a database in a multi-tenant system.

Multi-tenancy architecture use cases

Multi-tenant architecture can’t be employed in every app. It’s suitable for the following types of apps:

  • SaaS (Software-as-a-Service) or AaaS (Application-as-a-Service) – a complete software solution sold on a pay-as-you-go basis by a cloud service provider. For example, Microsoft, Adobe, Salesforce, SAP.
  • PaaS (Platform-as-a-Service) – a multi-tenancy development environment that developers can use to build, test, and deploy applications. Each customer has its own development environment, but they share the same infrastructure. For example, Microsoft Azure, Amazon Web Services (AWS), Google Cloud Platform, etc.
  • IaaS (Infrastructure-as-a-Service) – a type of computing service that offers necessary resources (storage, networking, computing). The major IaaS providers are DigitalOcean, Google Compute Engine, Linode, etc.

Why should you adopt multi-tenant architecture?

Here are the key reasons to choose multi-tenant architecture for your SaaS app: 

  • Cost-efficiency

Since multi-tenant architecture allows serving multiple tenants with the same resources, it makes it easier and less costly to support the infrastructure. This also implies reduced costs for hardware, software, and maintenance. Thanks to that, you as a SaaS application provider can offer subscription to your users for lower costs.  

  • Scalability

In case with single-tenant architecture, you have to invest a lot of resources and time for configuration. Multi-tenant architecture is designed to be highly scalable. You can configure it while leaving the codebase and data structure unchanged. You can easily accommodate additional tenants as your user base grows.

  • Customization

The majority of SaaS multi-tenancy vendors provide straightforward and rich customization opportunities allowing all business owners to customize their multi-tenant application according to their specific needs. This customization is simple because it doesn’t require coding.

  • Maintenance

The SaaS multi-tenancy vendors are responsible for updates. They fix bugs and errors and implement new features on their own, and nothing is required from your end. This means that you can reduce cost and time on maintenance.

  • Ease of use

Multi-tenant architecture can provide a simplified user experience because all tenants are accessing the same instance which can be easier to navigate than multiple instances of the same software. 

  • Time to market

Multi-tenant architecture can help you get your multi-tenant software to market faster because it can be deployed faster than single-tenant architecture. This can be especially important for startups that need to quickly deploy software to meet business needs.

Overall, multi-tenant architecture provides significant benefits for businesses looking to reduce costs and increase scalability. 

Multi-tenant architecture challenges and how to deal with them

With all its benefits, multi-tenant architecture has its challenges as well. Many issues in multi-tenant architecture are associated with the fact that tenants share the same resources. 

In this part, we will shed light on these challenges and explain how you can deal with them. 

  1. Higher security risks

Since multi-tenant architecture doesn’t allow isolating instances from one another, there are higher security risks. Tenants share the same resources and security events. If the security of one tenant is not reliable, it may impact the other tenants and put other customers’ security at risk and expose their personal data.

To improve security in a multi-tenant architecture, you need to follow the best security practices. Here they are:

  • Implement strong authentication and authorization protocols to ensure that only authorized users can access sensitive data. 
  • Use strong and complex encryption algorithms and ensure that encryption keys are securely managed. 
  • Use network segmentation to isolate tenants’ data and resources from each other. Use VPNs or software-defined networking (SDN) to create isolated network zones for each tenant. 
  • Conduct regular vulnerability assessments to identify security weaknesses in the multi-tenant environment. 
  • Encourage users to use strong passwords, multi-factor authentication, and report about any suspicious activities. 
  • Stay on par with the latest security trends and technologies, and continuously improve the security system of the multi-tenant environment. 


         2. The “noisy neighbour” effect

In a single-tenant architecture, the risk of overload is low because tenants are isolated from each other. In a multi-tenant architecture, one customer that uses too much computing power influences other customers.

To some extent, this issue depends on the cloud vendor. If the vendor has set the infrastructure correctly, the “noisy neighbor effect” shouldn’t happen. So we recommend partnering with experienced and reliable cloud service provider.

However, to minimize the risk of this happening, you can follow such practices:

  1. Allocate resources on a per-tenant basis, ensuring that each tenant has a dedicated amount of resources, such as CPU, memory, and network bandwidth. This can help prevent a single tenant from monopolizing resources and impacting the performance of other tenants. 
  2. Distribute traffic and requests across multiple instances or servers to prevent overloading on a single instance. 
  3. Monitor the performance of the individual tenants to identify and isolate tenants that consume excessive resources. 

Cost of a multi-tenant environment

To calculate the cost of a multi-tenant environment you need to consider several factors: 

  • Infrastructure costs. Multi-tenant software architecture requires a robust and scalable infrastructure to support multiple tenants. The cost of infrastructure can vary depending on the size and complexity of the app, as well as on the number of tenants. 
  • Maintenance and upgrade costs. Multi-tenant architecture requires maintenance and upgrade to support the needs of multiple tenants. 
  • Security costs. Multi-tenant architecture requires certain security measures to protect data and be compliant with privacy laws. 

In conclusion

Multi-tenant solutions are designed to be easily configurable, highly scalable and customizable and introduce a lot of benefits. Of course, it’s not an all-in-one solution. However, if you need to handle complex systems with one system, you can adopt a multi-tenant architecture and, this way, save a lot of resources, and scale and add new features with ease.

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Avinash Bendigeri Avinash is a developer-turned Technical writer skilled in core content creation. He has an excellent track record of blogging in areas like Docker, Kubernetes, IoT and AI.

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