When it comes to cloud software applications, we often hear the term "tenancy." But, if you Googled the definition of tenancy, you'd find it means the possession of land or area from another person for a specific period. So, the question is, how is tenancy related to SaaS?

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In cloud computing, tenancy refers to the exchange of computing resources in a private or public environment that's separate and kept invisible from other users. In SaaS, tenancy is categorized into two formats: Single-tenant SaaS and multi-tenant SaaS.

In this post, let's break down each type of tenancy then compare the pros and cons for each one.

Single-Tenant SaaS

Single-tenant SaaS is an architecture where the SaaS client is the tenant. In the Single-Tenant SaaS environment, each team has a dedicated server and supporting infrastructure.

Single-tenant products can't be shared between users and the buyer can customize the software according to their requirements.

Consider single-tenant SaaS environment as a neighborhood community built by the same engineer, where every household can customize and modify their property as they desire. With an individual software instance, the buyer can customize the interface to meet the requirements of their business or team.

But, that's just one benefit of single-tenant SaaS. Let's review a few more in the section below.

Benefits of Single-Tenant SaaS

1. Improved Security

With single-tenancy, each customer's data is completely isolated from other customers. As a result, one customer can't access another's sensitive information. Leveraging security, this structure safeguards against hacking.

2. Reliable Operations

Since one user's activities can't impact others, single-tenant SaaS architectures are considered more reliable. For example, if one client's software experiences downtime during a tricky integration, it won't affect another clients' software.

3. Easy Restoration and Backup

Since each client's database has an isolated backup, it becomes easier to restore or backup the database in a single-tenant SaaS structure. Because the system is backed up to a dedicated component of the SaaS server, your team can easily access historical information and restore previous settings. All of your data will be stored in a space specific to your account.

4. Individual Upgrades

Companies that use single-tenancy architecture can upgrade their services individually. Rather than waiting for the software provider to launch a universal update, users can update their accounts as soon as the download is available. And, this doesn't disrupt their workflow whenever they need to upgrade their software. They can choose to launch upgrades during off-hours instead of being forced to upgrade at the same time as everyone else.

5. Self-Hosted Migration

If customers want to migrate from a SaaS environment to a self-hosted environment, it's easier to do so using single-tenant SaaS architecture. That's because all of your information is stored in one space, making it easy to export and transfer into a new environment.

Now that we've covered the basics of single-tenant SaaS, let's see how it compares to multi-tenant SaaS.

Multi-Tenant SaaS

Multi-tenant SaaS is a business structure where many organizations share the same software to save and store data. Multi-tenant SaaS also implies that a single instance of the software and its supporting information is used by multiple customers.

Each customer shares the same database and application. Consider the multi-tenant architecture as a high-rise building where the floor plans are prepared, but only a few changes can be made to individual units. It costs the customer a lot of money and time to make a significant change.

Let's review why some organizations prefer multi-tenant SaaS architecture over single-tenant.

Benefits of Multi-Tenant SaaS Architecture

1. Lower Costs

Since multi-tenant architecture enables the exchange of services, databases, resources, and applications, it can cost less than a single-tenant structure. Scaling has fewer implications because new users can access the same software as the original buyers.

2. Efficient Resources

Because all resources are shared, multi-tenant architecture uses resources that offer optimum efficiency. Since it's a changing environment where resources are accessed simultaneously, multi-tenant SaaS software needs to have the capacity for powering multiple customers at once.

3. Fewer Maintenance Costs

Customers don't have to pay expensive fees to keep the software up to date. Maintenance costs are usually associated with a SaaS subscription and aren't charge per case like with a single-tenant structure.

4. Shared Data Centers

Similar to a single-tenant environment, a vendor doesn't have to create a new data center for every new user. Customers have to use a common infrastructure that removes the need to increase the number of data centers for each tenant.

5. Larger Computing Capacity

The multi-tenant architecture provides organizations with the ability to stay in the same data center and infrastructure. Therefore, customers won't have to think about adding more server or computing capacity.

Now that we understand the differences between single- and multi-tenant SaaS, let's compare the drawbacks of each one.

When picking the SaaS architecture for your business, you'll need to weigh the benefits and limitations of both single and multi-tenant SaaS. To make your job a little easier, we curated a list of drawbacks for each type of SaaS architecture.

Cons of Single-Tenant SaaS

Below are some drawbacks associated with single tenancy.

1. Single-tenant SaaS typically costs more than multi-tenant SaaS.

The higher cost is one of the significant downsides of the single-tenant SaaS architecture as it doesn't allow cost-sharing for services like deployment and monitoring. Every new customer needs a new instance and each of those instances has to be paid for.

Also, more customizations and maintenance require more resources and time, leading to high costs.

2. Single-tenant SaaS requires more maintenance than multi-tenant SaaS.

Since single-tenant SaaS architecture requires constant updates and upgrades, so a lot of maintenance is needed. This can be time-consuming for your team as this maintenance will be managed by the user, not the provider.

3. Single-tenant SaaS can be more inefficient than multi-tenant SaaS.

Single-tenant SaaS doesn't make efficient usage of resources until it gets fully onboarded. Since you're constantly upgrading the product, you'll either need to devote permanent resources to maintain the product or work through an outdated version. In the end, either option may not be the most efficient for your team.

Now that we've covered single-tenancy, let's discuss some of the shortcomings of multi-tenant architecture.

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.

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.

If you want to see these architectures in action, check out this list of top Saas companies.

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Originally published Oct 30, 2019 8:00:00 AM, updated October 30 2019

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SaaS