Single-Tenant vs Multi-Tenant Architecture: Which One Should Your Business Go With?

If your business is stepping into cloud-based software, you're joining a global trend. Spending on cloud consulting services is set to grow by 31.7% to hit $782 billion in 2024. That's unsurprising, given how this tech can save you time and money.

But now, another decision: Do you go for single-tenant or multi-tenant architecture when investing in new software?

Hold on, are we talking about computers or real estate here?

Let's break it down a bit. When we say "tenancy" regarding software, we talk about its structure. While we're at it, we'll chat about the perks of both options and why a multi-tenant model is a wise choice, especially when diving into SaaS (Software as a Service) tools.

In software architecture, tenancy refers to how a system serves multiple users or "tenants." It's like deciding whether you want a solitary mansion or to reside in a shared apartment building in the digital landscape.

Tenancy plays a crucial role in determining how software resources, data, and interactions are managed, catering to the diverse needs of users within the system. Whether opting for a single-tenant or multi-tenant approach, the tenancy model shapes the dynamics of data isolation, customization, and overall user experience within the software architecture.

Okay, let's simplify this. Single-tenancy means that you, as a customer, get your own exclusive space in the digital world. It's like having your private house on a street.

Imagine this street with individual houses, each with its electricity generator. In the single-tenancy model, your home has its generator, and it's not shared with any other place. So, if something goes wrong with one generator, the others are unaffected.

Now, here's the catch. Just like having your generator for electricity might be more expensive than getting power from a big company that serves many houses, single-tenancy in software tends to be pricier than multi-tenancy. It's like choosing between having customized, independent space or sharing resources for cost efficiency.

Data security: Minimize the possibility of data breaches

Security is the primary benefit of a single-tenant system. Because each customer has their own highly secure databases and servers, All the server's applications, data, and servers are in complete isolation. If a hacker compromised a single user's data, no other customers would be affected by the issue. (Except if you were one of them and were in trouble.)

Rigorous security protocols mean a low chance of a breach in your data or significant downtime. Still, knowing your customers' data is secured during a disaster is essential.

This is why a single-tenancy structure is famous among businesses and industries with particular security and privacy concerns, including finance and healthcare.

Control: More options for customization are available for software and hardware

As a single-tenant customer, you will receive your software and hardware. Any modifications to these do not impact the other tenants, which means your building can be designed in any way you like. It's like painting the walls in your home any color you wish without needing permission from your housemates.

You may have every piece of software made specifically for your needs. If you prefer to work things out your method, you can modify the user interface by yourself after installing it locally. The software installs locally (although you will not be granted.

It also has one negative aspect: "Yes," you can configure everything to the millionth, but you "have" to configure everything to the millionth degree.

Sure, let's break down the details in a more user-friendly way:

1. Enhanced Security

Single-tenancy separates each customer's information from all other customers. This is to prevent one user from gaining access to the confidential information of a different. Furthermore, this arrangement safeguards against hackers by leveraging security.

2. Operational Reliability

A single-tenant SaaS architecture is considered more reliable since one user's activity doesn't impact the other. In the event of a complex integration, for example, if one client's software is down, the others' software won't be affected.

3. Backup and Restoration Made Easy

The single-tenant SaaS structure protects every client's database by its own backup. This makes recovering the database easy. The SaaS server stores every data point in a separate component, allowing your staff to recover old information quickly. The data you enter will be in a different space in your account.

4. Upgrades for Individuals

In single-tenancy architectures, companies can upgrade their services on their own. Once the download is available, rs can update their accounts instead of waiting for the software development services provider to launch an all-encompassing update. However, if they want to upgrade their software, it keeps the process intact. Upgrades can be made at times that are not peak hours instead of having to be scheduled during working hours.

5. Self-Hosted Migration

The single-tenant SaaS architecture makes migration from SaaS to self-hosted a lot easier. Since all your information is in one place, exporting and transferring it is simple.

Now that we've gone over the basics let's compare single-tenant vs multi-tenant.

1. Single-Tenant SaaS Costs More

Since single-tenant SaaS architectures do not allow cost-sharing services like deployment and monitoring as well as monitoring and deployment, they're more expensive. New customers need new instances, and each sample must be paid for. In addition, software customization and maintenance require more resources and time, which results in more expensive costs.

2. Single-Tenant Solution Requires More Maintenance

Managing a single-tenant SaaS architecture requires a great deal of maintenance since it requires continuous updates and upgrades. Because the care will be governed by the user rather than the service provider, it can be time-consuming for your staff.

3. Single-Tenant Solution Can Be More Inefficient

The power of single-tenant SaaS will be realized once it's fully integrated. Then, based on the frequency of updates to the product, it will be necessary to devote resources to maintaining it or go through older versions. Ultimately, there are more effective solutions for your group than either option.

Having covered single-tenancy, let's look at the shortcomings of multi-tenancy.

Single tenancy, like having a private mansion in the digital world, offers tailored advantages that find their sweet spot in specific business scenarios. Here are user-friendly use cases where adopting a single-tenancy model makes perfect sense:

1. Industries with Stringent Security Needs:

Scenario: In sectors like finance or healthcare, where data security is non-negotiable.

Benefit: Single tenancy provides exclusive control, ensuring top-notch security measures and data isolation.

2. Highly Customized Business Processes:

Scenario: When your business thrives on unique processes demanding a personalized digital environment.

Benefit: Tailored customization allows the software to align precisely with the specific requirements of your business.

3. Predictable and Consistent Performance Demands:

Scenario: In situations where consistent and predictable software performance is a priority.

Benefit: Independent performance ensures that your software's functionality remains steady without external influences.

4. Isolated Regulatory Compliance Requirements:

Scenario: When your industry demands strict adherence to specific regulations.

Benefit: Single tenancy offers a dedicated space to meet unique compliance requirements without compromise.

5. Businesses Valuing Exclusive Control:

Scenario: For businesses prioritizing exclusive control over their digital resources.

Benefit: Enjoy complete authority over rules, data, and resources tailored precisely to your business needs.

Understanding these use cases helps businesses identify scenarios where the single-tenancy model shines, offering a digital solution customized to meet specific needs and priorities.

Multi-tenancy is like having a party where many guests share a single cake, but each gets their slice. In the tech world, it means that multiple customers use the same software and its supporting system. Everyone shares the software application, databases, and computing power to process all the data.

But here's the cool part—each customer's data remains separate and secure. Picture it like living in an apartment building; every apartment has its lockable door, but everyone shares cool stuff like the laundry room and the pool (if your apartment has one, lucky you!).

1. Reduced Costs

Multi-tenant architectural models offer the benefit of allowing services, databases, resources as well as applications to swap among tenants. They are, therefore, more affordable than single-tenant designs. The software can be accessed by people who are new to the software as well as the original purchasers, which means that scaling is not as difficult.

2. Efficient Resources

Multi-tenant architecture improves efficiency as it allows the sharing of all resources. Therefore, multi-tenant SaaS software should be able to power many customers at the same time, as it is an environment where resources are accessed at the same time.

3. Maintenance Costs are Lower

The software is able to be updated without paying costly maintenance charges. As opposed to a single-tenant structure, SaaS subscriptions usually only have associated maintenance costs.

4. Using Shared Data Centers

Vendors do not have to set up an additional data center for every new customer like they do in a single-tenant environment. Furthermore, having an infrastructure that is common eliminates the requirement for tenants to own numerous data centers.

5. Increased Computing Capacity

Multi-tenant technology allows businesses to keep their infrastructure and data centers the same. Consequently, customers will not have to purchase additional servers or computing capacity.

Let's take a look at the negatives of single-tenant and multi-tenant SaaS since it's obvious that they differ.

Multi-tenant or single-tenant pros and cons should be taken into consideration when selecting the right SaaS structure for your business to get the best results. Below are the disadvantages of each type of SaaS architecture that will aid you in your task.

1. SaaS Multi-Tenant Architecture Can Have More Downtime

It is familiar with multi-tenant SaaS to rely on large, complex databases requiring periodic software and hardware failures. It results in accessibility issues for your clients and the perception of trust being diminished for your company.

2. Multi-Tenant SaaS Can Experience More In-App Disturbances

When you have a multi-tenant arrangement, databases are shared, making it less likely to be disrupted. Multi-tenant databases could affect customers from all of them if one is involved. Customers also may experience outages if hardware or software problems occur within the database.

3. Multi-Tenant SaaS Has Limited Customizations

In multi-tenancy, resources and SaaS development services are shared among multiple clients, which means that customizations are not possible, and the overall quality is less than what you can control. With less control, it isn't easy to customize the software to your specific business.

Embracing the multi-tenancy model in software architecture opens doors to a collaborative digital neighbourhood where businesses can thrive together. Here are user-friendly use cases illustrating scenarios where adopting multi-tenancy proves to be a winning strategy:

1. Startups and Small Organizations:

Scenario: Picture a vibrant, shared workspace buzzing with creativity.

Benefit: Multi-tenancy is ideal for smaller entities, providing cost-effective solutions and fostering collaborative growth without hefty individual investments.

2. Efficient Collaboration Across Departments:

Scenario: Imagine different teams seamlessly working together.

Benefit: Multi-tenancy facilitates smooth collaboration across departments, ensuring efficient communication and streamlined workflows.

3. Adapting to Rapid Business Growth:

Scenario: Your business experiences sudden growth spurts.

Benefit: Effortless scalability allows quick adaptation to changing demands, ensuring your digital space keeps up with your business's evolution.

4. Flexibility for Diverse Software Needs:

Scenario: Businesses using a variety of software tools.

Benefit: Multi-tenancy offers flexibility, allowing diverse software applications to coexist and integrate seamlessly, enhancing overall functionality.

5. Cross-Platform Integration for Enhanced Productivity:

Scenario: Picture different software tools seamlessly working as a unified system.

Benefit: Multi-tenancy enables cross-platform integration, ensuring that various business applications work together harmoniously for optimal productivity.

6. Innovation Hubs and Collaborative Ecosystems:

Scenario: An ecosystem where innovation is the norm.

Benefit: Multi-tenancy fosters innovation hubs, bringing together businesses and fostering collaborative ecosystems where ideas flow freely.

7. Balancing Cost-Effectiveness and Features:

Scenario: Navigating a digital marketplace with varying needs.

Benefit: Multi-tenancy strikes a balance, offering cost-effective solutions while providing many features, making it an attractive choice for businesses of all sizes.

Understanding these use cases showcases the versatility of multi-tenancy, catering to the needs of startups, fostering collaboration, and adapting seamlessly to the ever-changing dynamics of the digital landscape.

A common analogy draws parallels with real estate dynamics to demystify the complexities of single-tenant vs. multi-tenant architecture.

In the Realm of Single-Tenant Architecture:

Imagine each customer residing in solitary splendour within a distinct apartment building. Picture this building as a haven with its security system and exclusive facilities cocooned away from the influence of neighbouring structures. In this scenario, privacy reigns supreme, akin to an individual living in splendid isolation.

Venturing into Multi-Tenant Architecture:

Contrastingly, the multi-tenant landscape resembles a bustling apartment building where each tenant occupies a separate unit. They coexist under the umbrella of a shared security system and communal facilities. While privacy within individual apartments is safeguarded with unique keys, the collective activities of fellow tenants may influence the overall comfort within the building.

Startup Leanings Towards Multi-Tenancy:

In the startup realm, the predilection often leans towards a multi-tenant setup. This translates to a singular database housing a diverse spectrum of customer data. The caveat lies in ensuring robust security systems that maintain the sanctity of individual customer data. Despite cohabiting within the same database, stringent measures are in place to ensure data privacy—customers may share the space, but their data remains distinctly segmented.

Essentially, the real estate analogy vividly depicts the nuanced choices between single-tenant and multi-tenant architectures. It unveils the delicate balance between individual privacy and shared resources, offering businesses a lens to navigate the intricate landscapes of infrastructure.

In the world of software architecture, decisions come with tradeoffs. Choosing between a multi-tenant and a single-tenant solution involves weighing the scales of flexibility and cost-effectiveness against the alternative's security, compliance, and reliability.

Resource usage, budget constraints, partition (isolation) models, and cybersecurity tools are pivotal in this choice. Luckily, navigating this complex landscape is made easier with the assistance of IT outsourcing, and that's where AddWeb Solution steps in.

At AddWeb Solution, we specialize in expert consulting and web application development services, all delivered through a subscription-based model. This means you get to optimize your resource allocation with monthly payments.

Are you curious? What can we bring to the table for your business? Get in touch with us, and let's explore the possibilities together!