Single-Tenant vs. Multi-Tenant: Differences, Pros&Cons, Architecture 

As the SaaS model offers buying not an instance of the solution, but access to the vendor’s cloud, each of such customers is called a software tenant. The tenant system is access-based, which means it doesn’t matter if an individual or a group of people purchases access. This can be a company or just one user.

Also named “hosted” or “managed” services, a single-tenant system is when each client has their own “instance” at the vendor’s cloud. This means the client buys and uses a completely personalized solution, and no parts of it, including middleware and sometimes servers, are shared with anyone else.

Multi-tenant structure, in its turn, offers the same software instance for several users (or software tenants). It doesn’t mean that companies can see data of their competitors or other users; however, the software itself is shared between them.

The purpose of the multi-tenant architecture is to serve as many users as possible without copying the software and using multiple middleware solutions.

In practice, the difference between system and application software is not always straightforward. As we can see, the key difference is in the number of users a single software instance can serve. A single-tenant option is more popular among customers as it offers deeper data security (the whole data flow can only be accessed by you). However, the main advantage of multi-tenant architecture is that these kinds of software can be used more efficiently, with fewer resources required.

In reality, the choice of single-tenant or multi-tenant architecture highly depends on the industry and particular business tasks. Further, we will share a detailed comparison of two of these architectures' benefits and drawbacks.

While not having access to the source code of SaaS solutions, many customers prefer to customize the solution they bought for the needs of a particular business. In this case, the vendor builds a completely separate, customer-specific instance of the software using separate servers, middleware, third-party apps, and any physical resources on the side of a customer.

As a result, the customer gets a completely isolated system consisting of virtual machines and servers that works just the same as the local solution would do, with unique access for one customer only.

Using multitenancy in cloud computing, the vendor creates one environment to serve the needs of multiple customers. In this environment, they can create multiple virtual machines, each for a particular customer, while all of them still use the same means of working with these virtual machines (e.g., host hardware, middle software, and more).

To build a multi-tenant structure at your SaaS server, you must check if your server can go with this architecture and then ensure the necessary steps are done:

• Make sure your servers can process as much load as you are going to have.
• Consider the level of isolation and controls
• Ensure that the system allows for customization at the level of each tenant.
• Design an authorization and caching mechanism
• Build your multi-tenant software on the scalable platform

A multi-tenant architecture is believed to be less protected compared to the single-tenant one. However, there are multiple ways to enhance your system security and avoid interferences. To ensure the privacy of your users, you should use one of the following approaches:

• Organizing separate spaces for each tenant when a new instance is created.
• Building single-tenant clusters for better isolation.
• Or using the application logic that will ensure better security (app-level security).
• Multi-tenant hosting should be based on a trusted server.

As for general data safety, the rules are the same as for any software:

• Use trusted encryption protocols
• Track and control permissions
• Ensure backups are set up

Although some believe multi-tenant architecture is not too safe, many big players use this approach to create their software. Mostly, these are the companies that aim for the following results:

• They want to support multiple customers in a cost-effective cloud environment.
• They don't want to have a large infrastructural footprint.
• They don't have a large team for deployment, maintenance, and support.
• These are mostly the companies that don’t have a big budget for building a completely unique solution and prefer using out-of-the-box features.

The companies who choose multi-tenant architecture mostly use solutions similar to Salesforce. Some use Microsoft Azure or AWS that allow you to build your own multitenant software on them.

Single-tenant architecture is great as it offers useful capabilities:

1. Privacy matters. These apps are better isolated as most data is stored on a separate server with unique access.
2. Great customization. Single tenant environment can be easily customized without needing approval from a vendor. If possible, they can add features and change UI, and the updates wouldn't affect them as hard as multi-tenant users.
3. High availability and better control. As the client controls the whole environment, the solution can easily be accessed from anywhere, and access options totally depend on the user.

However, there are some challenges users can encounter:

1. Challenging maintenance and less efficiency. As the system functions mostly on the client’s side, all the maintenance duties fall on their shoulders. Such systems often suffer downtime as the vendor does not solve the issues in a centralized way.
2. Setting it up. These systems are usually slower compared to multi-tenant ones. It takes time to integrate them; each time reconfiguration is needed, the users must wait until it works correctly.
3. Pricing. As these solutions are mostly individual, they may be quite costly. Moreover, there is no opportunity to share costs with other users.

Multi-tenant solutions are popular for their efficient benefits:

1. Affordability. With shared costs for the environment, multi-tenant solutions offer more capabilities to purchase (and to try). This allows for greater scalability and faster performance.
2. Integrations: API capabilities offer easier integration with various apps, which means you have more flexibility in using third-party solutions.
3. No maintenance responsibility. As your SaaS vendor offers you the services, they are responsible for most of the database and code maintenance. The bad side is that you will have to wait sometimes.

Why multitenancy in cloud computing can work not so well:

1. Challenging customization. Most of the SaaS vendors offer great additional capabilities. However, using a multi tenant cloud model, you cannot customize your environment as deeply as it is possible for single-tenant users. This happens due to the fact that many features are co-dependent, so the vendor doesn’t always want to change their general concept.
2. Potential security risks. While you have your separate environment to work in, and it is isolated from other users, there are some security risks related to the usage of mutual parts of the system. You have less control of security but can always ask a vendor for additional safety measures.
3. Tricky upgrades. As the vendor controls the system, they provide patches and updates whenever they can (and wish). This can lead to unpredicted issues with your third-party solutions compatibility or some challenges when using your related apps.

When selecting an architecture for your ecommerce software, you have to understand your goals and analyze what you want to get. Here are some questions to answer before choosing your architecture type:

1. Analyze your processes and plans: would they require better performance in the future?
2. How much customization are you going to need?
3. What is your budget and expected revenue?
4. Would you need any enhanced security (useful for governmental entities that handle a lot of confidential data)?
5. Do you have (or are ready to hire) a team for maintenance on your side?
6. Would you need to integrate your new system with any third-party tools?

These questions can help you to realize what drawbacks of each architecture can interfere with your future plans and which benefits can help you to reach your goals faster.

To ensure you get the services you actually need, ask your future vendor the following questions. They will allow you to realize the level of the vendor’s expertise and make a proven decision on your ecommerce software.

• How do you resolve the safety issue?
• How fast are security patches delivered? How often?
• If you offer a multitenant structure, how do you ensure each tenant has their separate space?
• How scalable is your system? Can we scale it on our side, or does it happen automatically?
• Which costs are included? Do you offer additional paid services?
• Is customization limited?
• Did you work with businesses like ours? Are there any results from these clients?

An interview with your future vendor will show you their level of experience and save you some time from discovering unpleasant details (like additional costs) in the working process.