5 Reasons to Choose Multi-Tenant Architecture for Your SaaS Application

What are vital benefits of multi-tenant architecture in SaaS app development_2

“We shape our buildings; thereafter they shape us.”

Winston Churchill made this statement emphasizing that the buildings we live and work in have an impact on us; thus we need to build and manage them more responsibly.

Similarly, the cloud that stores, governs, and manages the user data is dependent on its foundation, its architecture, thus we must choose the architecture responsibly.

Today, when it comes to SaaS application development, developers, as well as businesses, aim for the most cost-effective as well as an efficient choice of architecture.

Guess: Is it Single-Tenant Architecture or Multi-Tenant Architecture?

Unable to figure it out? Let’s make it easy.

Answer this in 5 seconds: Name one startup (without taking the help of Google) that uses Single-Tenant Architecture.

Got one? I guess, NO. Honestly, I will be unable to answer it too.

Today, all clouds barring a few are developed on Multi-Tenant Architecture, making it a standard way to run a business these days. Create a database, perform server provisioning, add a load balancer, fill it up with caching, and you are done.

But the question is why Multi-Tenant Architecture is superior to Single-Tenant?

Is it because of Cost, Performance, Scalability, or Security?

We will discuss it, but, before introducing you to these advantages, let us first walk you through a comparative analysis of Single-Tenant and Multi-Tenant Architectures in SaaS solutions.

Single-Tenant vs Multi-Tenant Architecture

If you have decided to use the cloud for your SaaS application development project, I must say it’s a wise move because, according to IDC, 90% of enterprises will use multiple cloud services and platforms by 2020. However, the perplexing decision you will be left to make is SaaS Single-Tenant vs SaaS Multi-Tenant Architecture.

Single-Tenant Vs Multi-Tenant Architecture

What is Single-Tenancy?

Single-Tenant Architecture, as the name suggests, is a system wherein each customer has their own independent database and instance of the software. It is a scenario wherein only a single instance of the software is allowed to run on the SaaS server per client. This sort of tenancy implies that there’s essentially no sharing of any instance among clients.

A Single-Tenant Architecture is like an office building, leased fully by one company. All the spaces (instances) are in the same place, so there can be a high degree of interaction between them, but the overall cost is higher because the entire ecosystem is paid for by a single owner.

Though not many SaaS providers today offer single-tenant SaaS, still security, data backup, and ease of migration to a self-hosted environment are some advantages that this architecture ensures.

What is Multi-Tenancy?

SaaS Multi-Tenant Architecture, on the other hand, implies centralized administration to maintain a common code-based application and run a common instance(s) of the application for multiple tenants (organizations/businesses). However, secure the confidential data for each tenant from any other tenant.

Apartments are a perfect example of a multi-tenant architecture. They have a centralized administration for security (at the main gate), electricity, water, and other facilities. These facilities are owned by the apartment owner and shared by the tenants.

Apart from the software application, each customer also shares a multi-tenant database. As for the data, each set of data is tagged as belonging to each customer. The software is pre-programmed to segregate and secure the data for each user.

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Business Benefits of Choosing Multi-Tenant Architecture for Your SaaS Application

While each of these has its pros and cons, the present-day vendor market presents us with a scenario wherein Multi-Tenancy sells better than Single-Tenancy, except for when businesses are looking for self-hosted environments. And here’s why:

1. Better ROI

Multi-Tenant Architecture allows the sharing of resources, databases, and the application itself, thus the cost to run the system is fixed, which comes down in the long run. Especially in comparison to Single-Tenant Saas, the investment cost is less since the total cost is shared by many tenants sharing the application.

Multi-tenant architecture ROI

For the vendor, it is easier to deliver a SaaS solution at a lower cost than to provide a Single-Tenant SaaS solution. With each incremental tenant, no extra charge has to be incurred at the vendors’ end, thus bringing down the investment cost for the tenant as well. Economies of scale render the cost of onboarding on the vendor’s end to be zero, yet a marginal but incremental revenue.

2. Improved Performance

Since the different elements in the technology stack are shared and enjoy the economies of scale, this sort of SaaS architecture offers optimum speed, efficiency, and reliability that SaaS can offer.

The vendor offers shared code, elements of the technology stack, and databases to various tenants, all at the same time. Thus it becomes easier for the vendor to assess and optimize speed, utilization, response time across the entire system, and even update the technology stack when needed.

This makes efficiency one of the identifiers of the Multi-Tenant SaaS platform. No doubt, with more shareability, comes the risk of security vulnerabilities.

questions on security vulnerabilities answered by Google

For instance, vulnerabilities like “Spectre” and “Meltdown” made news headlines in 2018, which raised many questions; however, the truth is that Multi-Tenant Architecture providers are constantly working on getting rid of these security vulnerabilities to make the ecosystem safe and efficient.

3. Expedient Maintenance, Updates, and Upgrades

In the case of SaaS Multi-Tenant Architecture, users do not have to pay a considerable amount of fees to keep the software up to date. Maintenance costs are usually associated with a SaaS subscription and aren’t charged per case like with a Single-Tenant structure.

Even the data structure does not need to undergo any change as the code is shared and remains standard. It is easy to make upgrades to the technology stack or the application itself since it needs to be done at just one centralized point but is reflected at all tenant ends.

The maintenance costs, especially for updates, get shared by all the tenants as they use the code from the same pool. This reduces the overall cost of maintenance for each tenant.

4. Convenient Onboarding of New Tenants

Customer onboarding has become a prime focus for vendors since a poor user experience can directly affect the growth prospects for any vendor. Hence, bringing customers and users on board for using the product is a crucial task. It becomes essential to emphasize the self-sign up the process.

In a Multi-Tenant Architecture, the process of signing up and configuration of subdomain/domain are automated. The application also automatically performs tasks like the setup of default data for clients and configuring of application, thus making it easier still for the user to configure.

5. The Virtue of Scalability

As more hardware is added to a Multi-Tenant SaaS model, the horsepower of the entire system is powered up, thus providing scalability to all the tenants that are using the application and not just the newly added tenant. At times, it can be as simple as adding more hardware for the same existing resources of the technology stack.

Physical Segregation of Tenants

Unlike in a Single-Tenant solution, a vendor does not need to build a new and unique data center for every new tenant when using a multi-tenant architecture. In multi-tenant applications, the tenants use a common infrastructure. There is no need to raise the number of data centers for individual tenants.


“Get off of my shoulders. The foundation has been laid, now it’s time for you to build on it and get to work.” – Amelia Boynton Robinson

Multi-tenant SaaS architecture makes for long-term benefits for vendors as well as users, be it in terms of maintenance, cost of investment, or Product Development. However, no matter which architecture you use, it entails a few challenges which you need to identify and take in your stride in the long-run.

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Sunil Goyal

About the Author

Sunil finds his forte in defining software architectures. With over 10 years of experience in the industry, he has contributed to several leading projects. He loves spending time with friends and ensures to do so even on a hectic day.

Leave a Comment


3:37 PM, Oct 15, 2019

Any success stories with multi-tenant architectures you came across? Though there are standard benefits/advantages over single tenancy, people scared about achieving availability and tenant isolation and prefers single tenant.


12:28 PM, Aug 31, 2018

How successful multi-tenant is when it comes to different flavors of same brand ?

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