Single Tenant vs Multi Tenant Architecture for SAAS Platforms [System Design Sundays]

When it comes to designing SAAS/Cloud Application, knowing this is a must

Dec 04, 2023

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Recently, I came across a very interesting article called, “The Architecture Of Serverless Data Systems”. The author made a very interesting claim, that the “future of cloud data services is large-scale and multi-tenant”. The term multi-tenant was new to me, so I decided to look into it

further. This email/post will summarize what I learned about Single Tenant and Multi-Tenant Software Architectures, and the pros and cons of each setup.

Image Source. We’ll refer to this one a lot today.

Tenancy in Software Architecture

What is Single Tenant Architecture- Single-tenant architecture in SAAS is a framework where each customer (or tenant) has their own independent database and instance of the software. Imagine a scenario where every tenant lives in their own detached house, enjoying complete isolation and the freedom to customize their living space as they see fit. This architecture ensures that each tenant's data is stored separately, providing a high level of security and customization. The left part of the image below illustrates a single-tenant architecture.
Image Source
Understanding Multi-Tenant Architecture- Multi-tenant architecture is like an apartment building, where multiple tenants live in separate units but share common infrastructure like plumbing and electricity. In SAAS, this means multiple customers share the same software instance and database. Each tenant's sensitive data may be isolated from other tenants, but by and large, the underlying infrastructure and resources are shared. It is important to understand that when it comes MT setups, you can have large variance in the sharing. The diagram below includes three sample microservices: product, order, and catalog. If you look closely at the tenancy model of each of these services, you’ll notice they all employ slightly different patterns of tenancy.
The product service shares all of its resources (compute and storage) with all tenants. This aligns with the classic definition of multi-tenancy. However, if you look at the order service, you’ll see that it has shared compute, but separate storage for each tenant. The catalog service adds another variation where the compute is separate for every tenant (a separate microservice deployment for each tenant), but it shares the storage for all tenants.
This can be extended to an extreme. Below shows an MT setup that shares no common resources, but in a common environment. “Even though these tenants are running in a siloed infrastructure, they are still managed and operated collectively. They share one unified onboarding, identity, metrics, billing, and operational experience. Also, when a new version is released, it is deployed to all tenants. For this to work, you cannot allow one-off customization for individual tenants.”
Pros and Cons of Single Tenant Architecture- Single Tenancy lends itself well to security, customization, and stability. Single-tenancy provides high user engagement with control and customizations, security, reliability, and the ability to restore and backup. albeit with a higher per-person cost than multi-tenant architecture.
Pros of Single Tenant Architecture
1. Enhanced Security: As data is not shared between tenants, the risk of data breaches is minimized.
2. Customization: Tenants can tailor the software to their specific needs, offering a more personalized experience.
3. Performance Stability: Performance issues in one tenant’s instance do not affect others.
Cons of Single Tenant Architecture
1. Higher Costs: The need for separate instances for each tenant increases hardware and maintenance costs.
2. Scalability Issues: Scaling requires additional hardware and resources, making it a slower and more expensive process. And the maintenance is a nightmare onto itself
3. Inefficient Resource Utilization: Dedicated resources for each tenant can lead to underutilization.
Pros and Cons of Multi-Tenant Architecture- I visualize MT Architecture like an assembly line- good for economies of scale, not so much for customization. Multi-tenant options exist to offer compliance, security, quick onboarding, and great customer service.
Pros of Multi Tenant Architecture
1. Cost Efficiency: Sharing resources reduces overall costs for providers and, consequently, for customers.
2. Easier Upgrades and Maintenance: Updates can be rolled out to all tenants simultaneously, ensuring uniformity and ease of maintenance.
3. Scalability: Adding new tenants is easier and more cost-effective, as it often requires little more than allocating additional database space.
“Cons of Multi-Tenant SaaS
1. Multi-tenant SaaS can experience more downtime than single-tenant SaaS- Multi-tenant SaaS relies on complex and large databases that require software and hardware downtime regularly. This causes availability issues for customers and can make your business seem less reliable.
2. Multi-tenant SaaS has more in-app disturbances than single-tenant SaaS- Since databases are shared within a multi-tenant structure, there's a higher chance that your workflow can be disturbed. For example, if a customer gets impacted in the multi-tenant database, it can affect all other customers. Or, if hardware and software issues occur within the server, it can lead to an outage for customers as well.
3. Multi-tenant SaaS can't be customized like singe-tenant SaaS- Since resources and services are shared with multiple customers, multi-tenancy provides fewer customizations and users don't have full control over the quality of the environment. With less control, it's hard to personalize the software to your business's specific needs.”

Multi-Tenancy goes well with the SAAS meta in today’s architecture. To (once again) quote the excellent Hubspot article on this topic-

After considering the benefits and drawbacks of the single-tenant SaaS and multi-tenant SaaS architecture, it's concluded that multi-tenancy offers more long-term advantages for SaaS application vendors in terms of investments and development. Though it's not a simple task as it entails enormous challenges in terms of privacy and security, it offers greater capacity for data and a higher ceiling for your business.

I don’t have enough expertise/experience on this side to add any pearls of wisdom here. If you have anything to add, you know the drill. I’ll look forward to hearing from you.

That is it for this piece. I appreciate your time. As always, if you’re interested in working with me or checking out my other work, my links will be at the end of this email/post. And if you found value in this write-up, I would appreciate you sharing it with more people. It is word-of-mouth referrals like yours that help me grow.

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