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Exploring Multi-Tenant Architecture: A Comprehensive Guide

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Multi-tenant architecture, or multi-tenancy, is a software architecture that can run multiple instances of an application on the same cloud server, which is responsible for serving multiple tenants simultaneously. Each client’s group of users is given access to isolated software in a shared environment. This type of architecture allows companies to assign a single infrastructure to several end users or organizations with groups of users, rather than individually managing the maintenance and updates of multiple environments.

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What Is Multi-Tenant Architecture?

Multi-tenant architecture hosts multiple clients or tenants inside one environment. Each tenant’s data is isolated from others and secured. This arrangement is similar to an apartment complex, where each tenant has a private apartment within a single building. The main advantages are lower costs, scalability, quick customization without coding, and centralized updates and maintenance.

How Multi-Tenancy Works

The term “tenant” refers to the customers or user groups that share access to hardware or software resources. Multi-tenancy is often used in cloud computing, enabling service providers to offer a more affordable option on the public cloud. It can also be used by software-as-a-service (SaaS) companies or companies that want to distribute software among employees in different locations.

Multi-tenant architecture works by creating multiple virtual machines (VMs) on the same physical or virtual server that all share the same hardware or software, but that operate as separate entities in complete independence from one another. This guarantees user security and privacy.

Multi-Tenant vs. Single-Tenant Architecture

Single-tenancy is largely seen as the “deluxe” option, in that a client operates in a solely dedicated environment. In a multi-tenant environment, each customer shares the software application along with a single database, so multiple people from the same company can access the database. Still, even in multi-tenancy, each tenant is isolated from other tenants.

The chief advantage of multi-tenant hosting is that it is less expensive. Resource pooling greatly reduces the cost since companies only pay for what they need. And since multi-tenancy is part of a SaaS provider, companies are not paying for on-premises hardware.

Functions like system monitoring and servicing the deployment become shared among all of the customers, which makes it less expensive as the cost is spread around. The table below highlights the differences between the two approaches.

Multi-tenancy Single-tenancy
Cost More affordable; shares costs with other tenants All costs paid by single-user
Hardware resource access Hardware shared among tenants, divided using VMs Server is used solely by single tenant
Software resource access Same software instance can be accessed by multiple users simultaneously All software instances are completely unique and isolated to the single-user entity
Client responsibilities All maintenance work and software updates delegated to the cloud service provider The client is responsible for software updates, patches, backup, restore, and disaster recovery
Type of cloud Public cloud Private cloud
System security Reduced interactions with out-of-cloud sources minimize exposure to malicious software Full control over who accesses the cloud environment and the data moving in and out
Availability “Noisy neighbor” syndrome with other tenants taking up computing resources Exclusive access to all of the cloud’s computing power at all times
Efficiency Only use the resources you need There’s wasted potential and poor efficiency if the environment isn’t run to full capacity
Customizability Minimal customization options; one-size-fits-all Single tenants can customize the software environment to suit their needs

3 Examples of Multi-Tenant Architecture

In using virtual systems in VMs, a single system would have to handle numerous instances, all running several versions or even different operating systems. Each of those instances also has to run its own application, along with its associated database.

When implemented into a multi-tenant architecture, all instances within a VM have to share the same base operating system, applications, and database access. This is the same model that’s used in infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and SaaS offerings.

Since IaaS, PaaS, and SaaS rely on sharing hardware and software resources, they use multi-tenancy in running their environment. This also enables them to create high-scalability offers for customers.

URL-Based SaaS

URL-based SaaS, also known as web-based SaaS, is a method of delivering software service over the internet that can be accessed through a dedicated URL. This approach to SaaS is easier for the user, and allows for less complex software and hardware management.

Using a URL as the primary method of SaaS deployment is also easier for the host service provider, as they’d only have to manage a single domain and database.

For the host, data management and security are handled at the application level rather than individually for each client. Many SaaS providers operate using this model, especially those that put a web app interface between the user and the primary database. In addition, the host can set up different Domain Name System (DNS) entries depending on the customer’s needs and how they’d like their traffic to be filtered.

The difference in URL allows the clients some level of customization. Of course, it’s limited since the architecture is still multi-tenant, but clients can implement their own local testing or even changes to the user interface (UI) and user experience (UX).

Multi-Tenant SaaS

In a multi-tenant SaaS structure, multiple customers are made to share the same software and hardware in order to cut costs and management efforts. Usually, this is done through the sharing of a single instance of the software along with its supporting data and information.

This approach tends to be slightly more complex for the host due to the number of databases and schemas accessed by clients, along with the restrictions needed at the database level. However, this often allows for more direct interaction with the database, cutting back on lag and wait times.

Another benefit is the increase in computing capacity per customer. Individual customers won’t have to worry about server and processing power capacities—they simply access the system and pay according to the resources they use.

Similarly to other approaches to multi-tenancy, this reduces the customization options for customers. Dedicated upgrades tend to be time-consuming and more complex to implement without negatively affecting the rest of the environment for the remainder of the customers.

Virtualization-Based SaaS

Virtualization-based SaaS, or containerized SaaS, is the most complex SaaS setup approach. Through virtualization, the SaaS provider creates an entirely separate virtual version of all resources needed to run the software service, including the servers, desktops, operating system files, storage, and network access. These co-exist on the same hardware infrastructure without interacting with or influencing one other.

When it comes to implementing a multi-tenant architecture alongside virtualization, regular interaction between the containers, applications, and databases is essential. This is what makes it incredibly complex to maintain. Such structures tend to require specialized container orchestration tools to manage the communication and influence between individual containers, like Kubernetes and Docker.

One example of a virtualized SaaS environment is Amazon Web Services, where Amazon hosts a number of platforms and software that are available to a large number of business clients and users. This approach to SaaS allows for more customizability for each individual user. Scalability is instantaneous and doesn’t sacrifice the software’s capabilities or limit access to the client’s own dataset.

3 Main Types of Multi-Tenant Databases

In a multi-tenant environment, multiple customers share the same application in the same operating environment, on the same hardware and with the same storage mechanism and database. This is how Salesforce and every other SaaS operator run. Every tenant is a client or user who has common access and specific privileges in the software instance. The database, however, is another matter. There are three ways to architect a database in a multi-tenant system.

Shared Database, Shared Schema

The most straightforward application of a multi-tenant architecture involves the sharing of multiple schemas for the same database. A schema refers to the construction of a database, and it’s usually made out of database tables that relate to one another.

The tables are used to manage the simultaneous access to the same dataset, like when two people are attempting to manipulate the same table or data entry at the same time. This database architecture is the cheapest and easiest to manage for the host. Additionally, it’s highly scalable to accommodate more tenants.

Shared Database, Multiple Schemas

Sharing a single database through multiple schemas is another way to manage a multi-tenant environment. With multiple schemas inside a single database, a business can have sub-databases that can divide datasets without having to set up multiple separate databases.

Unlike shared schemas, this approach allows each schema to operate in complete isolation from the rest of the database. This is suitable for applying different rules and regulations and various datasets to respect international data management laws, for example.

This approach is, however, more costly, as each individual division of the database requires its own administrative efforts. Not to mention, the scalability of the environment is somewhat limited.

Multiple Databases, Multiple Schemas

The multiple database approach takes the separations of schemas and datasets a step further. Clients can have different divisions of data on completely separate databases, such as segregating for sales, customers, and employees, or dividing by region.

The host would have to install the application separately for each client on their database, which adds a layer of complexity to management, maintenance, and scalability to this type of multi-tenancy deployment as well as the costs.

2 Featured Multi-Tenant Application Solutions

Multi-tenant applications are supported in cloud data centers. This architecture in the cloud allows various tenants to use computing resources while keeping their data isolated and invisible from one another. HubSpot, Salesforce, Zoho Assist, and Site24x7 are examples of application solutions that use cloud vendors’ space to store tenant data.

HubSpot icon.


HubSpot is known for its sales and inbound marketing platform, which offers tools for content management, lead generation, CRM, and marketing automation. It is one of the most popular multi-tenant SaaS platforms. Each tenant uses the same database and application, but customization is restricted to certain units within the shared infrastructure.

Salesforce icon.


Salesforce is a popular CRM platform that offers extensive customization tools through tools such as Process Builder and Lightning App Builder, and code-based customization using Apex and Visualforce. It relies on a robust metadata-driven multi-tenant architecture that allows easy customization of apps and user experience for each tenant.

Advantages of Multi-Tenancy

The multi-tenant model is widely used because of the wide range of benefits it offers vendors and their clients.

Reduced Costs

Multi-tenant cloud architecture models tend to be more cost-efficient than their single-tenant counterparts because most service providers follow a pay-as-you-go pricing model, where companies don’t have to pay for the entirety of the cloud environment if they’re not occupying or using it. The cost of a single environment is, instead, shared by all of the tenants. This not only includes the costs of the hardware but also all of the software and maintenance work going into keeping the environment running.

High Scalability

Working with cloud service providers is highly scalable. Companies don’t need to plan the purchase and onward maintenance of an extension to their environments; they simply request a larger offering. This also goes the other way around. If companies need to scale down operations, they’re not left with unused server space that still needs maintenance. The down-scaling process is just as easy and seamless as upscaling.

Low Maintenance

With multi-tenancy, companies are buying into a done-for-you product that already includes all of the necessary maintenance work for its software and hardware components, ranging from software updates and patches to ensuring availability, backup, and uptime. All labor needed to maintain the environment is included in the contract and shared with other tenants.

Improved Security And Privacy

While single-tenant architecture offers more advanced security and privacy capabilities, multi-tenancy is still considerably more secure than relying on other methods of sharing data and software resources among a pool of users. The security and privacy of the data processed on the multi-tenant cloud are guaranteed and maintained by the service provider. Additionally, having everything in the same environment allows for effective threat and intruder detection and prevention, compared to spread-apart resources.

Secure Backup And Restore

Some multi-tenancy providers include a built-in data backup and recovery system that allows businesses to manage data reliably. When configuring for regular backup, it’s best to implement an option offered by service providers themselves, as they tend to be more familiar with the best way to handle data on their cloud.

Disadvantages of Multi-Tenancy

Before migrating to a multi-tenant cloud offering, it’s important to be aware of the limitations and drawbacks of using this type of architecture.

Decreased Customizability

Multi-tenant architecture is considered an off-the-shelf product, and since businesses will share software and hardware resources with multiple other customers, they’re limited in the changes they can implement. This reduction in control can hinder business operations and a team’s progress online, as certain features may be missing while others are in the way.

Limited Resources

While most service providers put in their best efforts to keep the resources well-divided between various users, this isn’t always guaranteed. With multiple customers using the same system resources and computing power, companies might start suffering from “noisy neighbor” syndrome, where they are unable to access the resources they need, and operations slow down. Luckily, there are provisioning protocols that can be put in place to reduce the likelihood of this occurring. This includes load balances and elastic cloud computing.

Migration Challenges

While multi-tenant architectures are easy to adapt, they can be hard to leave. Migrating data from a multi-tenant environment to any other type of environment can be a challenge because personal data is scattered all over the shared cloud, wherever there’s room for it.

Security And Privacy Risks

Even with careful provisioning protocols and partitioning between the various VMs, companies are still sharing hardware with other users who aren’t authorized to access their part of the cloud. Normally, this isn’t a problem, but malicious individuals could try to take advantage of such a vulnerability. It could also occur unintentionally. Instances of data corruption can spread through the entirety of the software instance. A malicious attack that targets other users on the shared public cloud may end up reaching a different user and their sensitive data.

Global Problems And Downtime

By outsourcing data and operations to an external cloud managed by a third-party service provider, companies risk losing access to critical data and information in the case of a technical error. Also, cloud environments are susceptible to downtime; although, it’s minimal with the top providers.

Security Concerns with Multi-Tenant Architecture

Even though multi-tenancy is practical, there are some security concerns that both vendors and tenants need to be concerned about. High data security standards are essential for every multi-tenant provider to protect databases from neighboring tenants and other potential security risks and vulnerabilities.

Data Breaches

Data breaches can occur in multi-tenant systems when attackers exploit weaknesses in the provider’s system to get unauthorized access to tenant data. Attackers may gain access to sensitive information by exploiting weak passwords, cross-site scripting vulnerabilities, or software weaknesses.

To reduce these risks, multi-tenancy providers should incorporate strong access controls and extensive data security procedures. Enforcing strict authentication protocols, encrypting sensitive data, and updating access records regularly are all essential measures. Updating software and systems with the most recent security updates is critical for preventing a potential data breach.

Data Leaks

Data leakage frequently happens due to misconfiguration or poor data management by tenants or multi-tenancy providers. This can happen when data is accidentally delivered or accessed by an unauthorized person or shared incorrectly.

To prevent or reduce this potential risk, it is best to have consistent user training on data handling for both tenants and multi-tenant providers. Another method to apply is to have a data loss prevention (DLP) solution. This can help in identifying and preventing potential data leakage scenarios.

Cross-Tenant Contamination

Poor tenant isolation can result in data contamination, also known as “noisy neighbor,” on unauthorized access between tenants. This happens because of system misconfigurations or existing vulnerabilities that haven’t been resolved.

Proper tenant isolation by employing virtualization techniques can safely segregate and isolate tenants. Implementing robust access controls and thorough network segmentation can reduce cross-data contamination and illegal access.

Compliance and Regulatory Concerns

Meeting industry-specific compliance requirements can be difficult, especially within a single infrastructure that must adhere to multiple standards. Multi-tenancy providers must keep compliance and certification records specific to each tenant.

Multi-tenancy providers must understand and implement compliance measures that are tailored to their tenants’ different regulatory needs. This ensures that all tenants follow their industry standards while using the shared infrastructure.

API Security Gaps

In a multi-tenancy environment, tenants share APIs, which can lead to unauthorized access and data breaches if not properly secured. Attackers could use these vulnerabilities to gain access to sensitive information or disrupt services.

To avoid this, implement strong authentication techniques, such as OAuth or API keys to ensure that only authorized users may access APIs. Implement rate restrictions to avoid misuse, check input data to prevent injection attacks, keep extensive logs for auditing, and check APIs regularly for vulnerabilities. Tools such as OWASP ZAP and API gateways can manage this access with the help of implementing strong API security regulations. 

High Downtimes

Component failure or maintenance in a multi-tenant system might affect all tenants. This can result in extended downtime and major disruptions to services. To reduce downtime, multi-tenant providers must design the architecture with redundancy across several availability zones or regions.

Using load balancers and failover techniques can help mitigate this kind of issue. Scheduled maintenance during off-peak hours, use graceful degradation to keep critical services running during partial failures. Setting up monitoring tools for early issue detection, deploying updates gradually with rolling updates, and following defined service level agreements (SLAs) to ensure uptime commitments.

Bottom Line: The Future of Multi-Tenant Architecture

Multi-tenancy is a result of the rising demand for cloud storage space. SaaS organizations actively seek out these storage resources to efficiently manage and optimize their services for their clients. Beyond cost reductions, multi-tenancy allows enterprises to use readily accessible resources from their providers. As data production and collection continue to grow, the future of multi-tenant architecture remains dynamic and will continue to evolve as more sophisticated approaches to handling and managing multiple tenants within a single application instance are implemented.

Read our head-to-head review of HubSpot vs. Salesforce to learn more about how the two multi-tenant vendors mentioned in this article compare.

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