Single Tenant vs Multi Tenant Architecture in SaaS

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As more businesses move their software to the cloud, understanding how that software is built becomes increasingly important. Two common terms you’ll hear in cloud computing and SaaS (Software as a Service) are single-tenant and multi-tenant. These terms describe how the software and its resources are shared among customers. Let’s explore what they mean, how they differ, and when to use each.


What is SaaS? 💻☁️

SaaS stands for Software as a Service. Instead of installing software on your own computer or servers, SaaS lets you access it over the internet. Popular examples include Google Workspace, Microsoft 365, Zoom, and Dropbox. The software is hosted by a provider and delivered to users via the cloud.

SaaS providers use different architectures to support their users, mainly single-tenant or multi-tenant models. These models define how customers (also called tenants) are served by the provider.


Single-Tenant Architecture Explained 🏠🔐

In a single-tenant architecture, each customer has their own dedicated software instance and resources. This means their data, databases, and sometimes even the application itself are kept separate from other customers.

Think of this like living in your own private house. You don’t share your utilities or rooms with neighbors. Everything is built and maintained just for you.

Features:

  • Separate database and application per customer

  • High level of data isolation

  • Customizable configurations for each client

Pros:

  • Better security and privacy

  • Easier to meet strict compliance and legal requirements

  • More flexibility for customization

Cons:

  • Higher cost due to dedicated infrastructure

  • More complex to maintain and update individually

  • Not as scalable as multi-tenant systems

Use Cases:

  • Banks, government agencies, or healthcare providers with strict data rules

  • Large enterprises needing unique features and configurations

  • Organizations prioritizing data isolation over cost savings


Multi-Tenant Architecture Explained 🏢🔄

In a multi-tenant architecture, multiple customers share the same application and infrastructure. Each customer’s data is isolated and secure, but they use the same software environment.

Think of it like living in an apartment building. You have your own space, but you share the building, elevator, and electricity with others.

Features:

  • Shared software instance for all customers

  • Customer data is logically separated, but physically on the same systems

  • One version of the application serves all users

Pros:

  • Cost-effective due to shared resources

  • Easier and faster to update and maintain

  • Scales easily to many customers

Cons:

  • Less flexibility for customer-specific features

  • Security must be carefully managed to prevent data leaks

  • Performance issues can arise if one customer consumes too many resources

Use Cases:

  • Email services, project management tools, and CRM systems

  • Startups and small businesses looking for affordability

  • SaaS companies aiming to scale quickly




There are three main strategies for handling tenant system:

  1. Single Database, Single Schema

    All tenants share the same database and schema, with a TenantID column to separate data.

        Pros:

  • Simplified maintenance

  • Easy onboarding of new tenants

        Cons:

  • Limited customization

  • Complex backup and recovery

        Best For:

  • Applications with similar needs across tenants


  1. Single Database, Multiple Schemas

    Each tenant has their own schema within a shared database.

        Pros:

  • Better data isolation

  • Allows moderate customization

        Cons:

  • Managing many schemas is more complex

  • Backups require more effort

        Best For:

  • Medium-level customization requirements


  1. Separate Databases

    Each tenant gets their own database instance.

        Pros:

  • Maximum data isolation

  • Full flexibility for tenant-specific changes

        Cons:

  • More expensive to maintain

  • Harder to manage many databases

        Best For:

  • Customers with strict security or customization needs


Multi-Tenancy in Microservices Architecture 🧩

In microservices (where each part of an application is built and deployed independently), multi-tenancy needs special care:

  • A single shared schema across services is not ideal as it can lead to tight coupling.

  • Using separate schemas for each tenant helps strike a balance between efficiency and separation.

  • Separate databases per tenant offer the most isolation but can complicate deployment and resource management.


Choosing the right approach depends on the product’s complexity, security requirements, and team capabilities.


References 📚

  1. Sudheer Sandu. “Multi-Tenant Application.” Medium. https://medium.com/@sudheer.sandu/multi-tenant-application-68c11cc68929

  2. Microsoft Azure Architecture Center. “Design a multi-tenant SaaS solution on Azure.” https://learn.microsoft.com/en-us/azure/architecture/solution-ideas/articles/saas

  3. IBM Cloud Education. “Multi-Tenancy.” https://www.ibm.com/cloud/learn/multi-tenancy

  4. Google Cloud. “Multi-tenancy best practices.” https://cloud.google.com/architecture/saas/multi-tenancy-best-practices

  5. AWS Whitepapers. “SaaS Solutions on AWS.” https://docs.aws.amazon.com/whitepapers/latest/saas-on-aws/

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