Multi-Tenancy Explained: From Fundamentals to Implementation (Pros, Cons, Security, and Examples)

Published on: February 7, 2024

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7 min read

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For German Version

This article provides a comprehensive overview of multi-tenancy in cloud computing, covering its definition, purpose, types, advantages, and disadvantages. It explores the benefits of a multi-tenant SaaS architecture, such as cost reduction, scalability, and improved security, while also addressing potential drawbacks like customization limitations and resource competition. It delves into various examples and uses cases of multi-tenant architectures, including URL-based and virtualization-based SaaS. The article highlights security considerations essential for multi-tenancy and contrasts them with single tenancy, discussing the differences and scenarios where each approach might be preferred. Finally, it offers insights into the considerations when choosing between multi-tenant and single-tenant architectures for SaaS applications, presenting a nuanced understanding of multitenancy versus cloud computing.

What is Multi-Tenancy?

Multi-tenancy refers to utilizing shared services and resources in the cloud for multiple clients. In this model, resources like computing, networking, and storage are shared among tenants, but each tenant's data is isolated and invisible to others. An analogy is made to an apartment building, where each tenant has their own key and access to their apartment. At the same time, shared resources like water and electricity are available to all tenants. Benefits of multi-tenancy include scalability, lower entry costs, and the cloud provider managing shared resources.

What is the purpose and importance of multi-tenancy?

Multi-tenancy is an architectural approach where a single instance of a software application serves multiple tenants, offering cost savings, scalability, increased efficiency, easy maintenance, and some level of customization. This approach allows organizations to make the most of shared resources and is particularly beneficial in the context of public cloud environments.

The multi-tenant architecture helps give a higher return on investment (ROI) for companies as well as speed up the pace of maintenance and upgrades for tenants. Multi-tenancy is vital for the scalability of public and private clouds, and it has contributed to the standardization of multi-tenancy.

What are the Types of Multi-Tenant Architectures?

A multi-tenant architecture facilitates the provision of services to multiple users or groups of users, denoted as "tenants", from a single instance of a software application. This model offers considerable advantages, including improved scalability, simplified management, and cost-effectiveness. Nevertheless, multi-tenant architectures vary considerably; hybrid tenancy, shared tenancy, and isolated tenancy are the three primary types.

1. Isolated Tenancy

In the isolated tenancy model, every tenant's data and computational resources are maintained entirely separate from one another. This can be likened to individual houses in a neighborhood, where each residence has its distinct yard, utilities, and amenities. An exemplary illustration of this concept can be found in traditional web hosting companies such as BlueHost or GoDaddy. Each user is allocated their own isolated server space complete with their operating system, memory, and storage. While these servers may physically reside in the same data center, the resources of each user are not shared, providing a heightened level of security and the ability for extensive customization.

2. Shared Tenancy

In a shared tenancy setup, numerous tenants utilize a common database and application, yet their data remains logically separated. This arrangement is akin to residing in an apartment complex, where the building structure is shared among all residents, but each individual enjoys their private unit. For instance, consider Slack, a platform where multiple users utilize the same application, yet each workspace (tenant) maintains logical isolation from others. Within each workspace, users cannot access data from other workspaces, despite utilizing the same software platform.

3. Hybrid Tenancy

The hybrid model amalgamates features from both isolated and shared tenancy approaches. Picture it as akin to a townhouse complex, where each tenant maintains their residence (isolated), yet enjoys shared amenities like a pool or clubhouse (shared). A prime illustration of the hybrid tenancy model is found in Amazon Web Services (AWS). Here, users can deploy individual, segregated instances (virtual servers) within their dedicated Virtual Private Cloud (VPC), ensuring the segregation of their data and computations. Concurrently, AWS users leverage common AWS services, such as Amazon S3 for storage or Amazon RDS for relational databases, shared among all users.

How Does Multi-Tenancy Work in Cloud Computing?

To comprehend the concept of multitenancy, one may examine the operations of a banking institution. Although multiple individuals can deposit funds in a single bank, their assets remain entirely distinct despite being housed in the same location. Bank customers remain anonymous and do not engage in any form of interaction with one another. Likewise, in public cloud computing, clients of the cloud provider utilize identical infrastructure, commonly the same servers, while maintaining complete segregation of their funds.

What are the Advantages and Disadvantages of Multi-Tenancy?

Multi-tenancy is a software architecture where a single instance of an application serves multiple, isolated "tenants" (users or organizations). While it offers numerous advantages, it comes with certain drawbacks.

Benefits of a Multi-Tenant SaaS Architecture

The primary advantages of multi-tenancy are as follows:

• Cost Savings: If a cloud provider has many clients, it can offer its services to them for a lot less money than if each client had a separate infrastructure and the client's shared resources.
• Better Capacity Control: Multi-tenant systems offer better control of system capacity planning and monitoring since the client knows the specific needs of each tenant.
• Highly Scalable: SaaS networks that provide multi-tenant environments are usually sticklers when it comes to providing excellent customer support. This is because they have a large number of clients and need to ensure that each one receives excellent service. The multi-tenant application would benefit the vendors because it has an automatic signup mechanism and automates the configured domain and sub-domain. Other automated activities include setting the default data and configuring the program.
• Maintenance-Free: The host takes care of updates and upgrades, maintenance, and other associated tasks; think of the model like renting an apartment, the landlord takes care of repairs, and the tenant pays the rent. Customers do not just save money on monitoring and administration fees; they save labor costs.
• Improved Security and Privacy: While it is true that a single tenancy is safer, multitenancy is nonetheless effective at detecting threats and keeping tenants' resources apart from one another. It is more private and secure.

Disadvantages of Multi-Tenancy

The following are some of the drawbacks that are associated with multi-tenancy:

• Complexity: Multi-tenancy is generally more complex than single-tenancy because of the additional virtualization and management needed to support multiple tenants.
• Lack of Customizability: A multi-tenant environment offers fewer customizations, so users have less control over the quality.
• Noisy Neighbors: Tenants have to worry about noisy neighbors, which might slow response time for other tenants sharing the same resources.
• Stricter Authentication and Access Controls: Multi-tenant systems need stricter authentication and access controls for security.
• Security and Privacy Challenges: As different customers share resources, the risk factor in a multi-tenant setup increases. In contrast to a single-tenant cloud, where security events remain isolated to a single customer, it is more likely to harm other customers if one customer's data is compromised.
• Difficult to Migrate: Moving from a SaaS to a self-hosted environment is easy for single-tenant customers, but it can be difficult or costly for multi-tenant customers.
• Downtime: Downtime might be an issue, depending on the provider

What are the Examples and Use Cases of Multi-Tenant Architectures?

Multi-tenant architectures are a popular choice in software as a service (SaaS) offerings, allowing multiple customers to share the same software and hardware resources. Some examples of multi-tenant architectures are outlined below:

• URL-Based SaaS: URL-based SaaS, also known as web-based SaaS, offers software services accessible through dedicated URLs, eliminating the need for installing desktop apps. This approach simplifies software and hardware management for both users and service providers. Each client accesses their service via a specific subdomain managed by the host, streamlining data management and security at the application level. While customization options are limited due to the multi-tenant architecture, clients can still implement some level of customization, such as local testing and UI/UX changes.
• Multi-Tenant SaaS: In a multi-tenant SaaS structure, multiple customers share the same software and hardware to reduce costs and management efforts. This involves sharing a single instance of the software and its supporting data. While slightly more complex for the host due to database and schema access restrictions, it offers more direct interaction with the database, reducing lag. Additionally, it increases computing capacity per customer, eliminating concerns about server capacity. However, customization options are limited, and dedicated upgrades are complex to implement without affecting other customers.
• Virtualization-Based SaaS: Virtualization-based SaaS, also known as containerized SaaS, is a complex approach where the SaaS provider creates separate virtual versions of all resources needed to run the software service. This includes servers, desktops, operating system files, storage, and network access, all co-existing on the same hardware infrastructure without interaction. Implementing a multi-tenant architecture with virtualization requires regular interaction between containers, applications, and databases, making maintenance complex and necessitating specialized container orchestration tools like Kubernetes and Docker. Despite its complexity, this approach offers more customizability for each user and allows for instantaneous scalability without limiting access to client datasets. An example of a virtualized SaaS environment is Amazon Web Services, hosting platforms, and software available to numerous business clients and users.

What are the Types and Examples of Multi-Tenant Databases?

Within the domain of multi-tenant databases, a multitude of strategies exist for organizing tenant data access and interaction. Here are three types, and examples of multi-tenant databases are explained below:

1. Shared Database, Shared Schema: In this multi-tenant database architecture, all tenants access and interact with the same database and schema structure. Typically, each tenant's data is logically separated and distinguished by a unique TenantId column incorporated into every table, establishing a referential link to a dedicated tenant table. Consider an e-commerce platform employing this architecture. While there is only one instance of essential tables like Order and Customer, the segregation of tenants is achieved through the inclusion of a distinct column designating TenantId. This column acts as a crucial identifier, ensuring that each tenant's data remains distinct and accessible only to authorized parties within their designated scope.
2. Shared Database, Multiple Schemas: In this multi-tenant database model where each tenant maintains their schema, all tenants utilize a shared database while having distinct schema structures tailored to their specific needs. Typically, tenants remain isolated and distinguished by a TenantId column present on every table, establishing a referential constraint linking back to a central tenant table. For instance, consider an e-commerce application employing this approach. Despite having a singular instance of crucial tables such as Order and Customer, each tenant's data is segregated by columns and schemas. The TenantId column serves as a key identifier, ensuring that data about different tenants remains separate and accessible only within their designated schema and scope.
3. Multiple Databases, Multiple Schemas: In the enterprise strategy of multi-tenancy, each tenant maintains their dedicated database, resulting in a setup where multiple databases with identical schemas coexist. In an e-commerce application, this is often accomplished by employing distinct connection strings to route requests to each tenant's database. This approach ensures that each tenant's data remains completely isolated and independent within their database instance. Despite sharing the same underlying application logic and structure, tenants are provided with dedicated database resources tailored to their specific requirements and preferences.

Which security considerations should be taken into account in multi-tenancy?

Although the notion of multi-tenancy in cloud computing offers significant benefits to customers and end users alike, it is imperative to acknowledge the potential security vulnerabilities that may accompany these advantages. Cloud security is not a new problem; nonetheless, the resource-sharing feature that makes multi-tenancy so appealing is the very thing that can be a cause for concern.

When thinking about multi-tenant cloud security, it is important to keep in mind that the following security concerns can emerge during cloud-sharing.

• Corrupted Data: Although multi-tenant users are virtually isolated from one another, they are physically interconnected, sharing hardware, applications, and even data. Although uncommon, data corruption from one tenant could potentially propagate to others if a cloud provider has an inadequately configured infrastructure.
• Co-tenant or External Attacks: The lack of data isolation in multi-tenant cloud infrastructure makes it an easy target for attacks. The attackers could be competitors or other malicious tenants targeting their co-tenants. Side-channel attacks, which rely on information gathered from bandwidth monitoring or similar techniques, typically occur due to a lack of authorization controls for sharing physical resources.
• Configuration Change & Management Risks: Configuration changes and upgrades for one tenant may unintentionally impact other customers, leading to environmental glitches and potential disruptions; this is one of the risks associated with change management in multi-tenant architectures with a single shared environment.
• Data Breach Risks: Multi-tenancy involves a shared ecosystem in public cloud deployments, where each user has limited privileges to access a single shared database containing other tenants' data. A data breach in one tenant's database can compromise the privacy and data of other tenants within the shared environment, increasing the risk of data breaches.

What is Single-Tenancy?

A single tenancy model is one in which each tenant or customer has their particular dedicated instance or environment. In this setup, resources such as compute nodes, storage, and networking infrastructure are exclusive to a single tenant, providing them with isolation and control over their environment. Each tenant operates within their own independent space, with no sharing of resources with other tenants.

On the other hand, multi-tenancy is a model where multiple tenants or customers share the same set of resources and infrastructure. In a multi-tenant architecture, resources like compute nodes, storage, and networking are shared among multiple tenants. Each tenant's data and operations are logically isolated from one another, but they all utilize the same underlying infrastructure. This allows for more efficient resource utilization, scalability, and cost-effectiveness than a single tenancy. However, it introduces complexities in ensuring data isolation, security, and performance isolation among tenants.

What is the Difference Between Single-tenant and Multi-tenant?

Two distinct approaches to delivering cloud software as a service (SaaS) solutions are single-tenant and multi-tenant. Customer access to the software distinguishes the two. A single-tenant model ensures that every customer has access to a unique software instance that operates on infrastructure not shared with other clients. Multi-tenant provides access to the SaaS solution for multiple customers via a shared infrastructure. An often-used analogy illustrates the distinction between apartment living and single-family residence living. Among the communal utilities in the apartment are water and electricity. A few tenants potentially monopolize access to resources to the detriment of others. Residents of single-family homes are not obligated to utilize shared resources and possess absolute autonomy in determining how to employ them.

To obtain in-depth knowledge of the distinctions between single-tenant and multi-tenant architecture, look at the following table.

Single-tenant architecture	Multi-tenant architecture
Each tenant has a dedicated instance of the application and its resources	Multiple tenants share a single instance of the application and its resources
Scaling requires provisioning and managing individual instances for each tenant	Easier scalability, as multiple tenants can be accommodated within a single instance
More secure due to isolated environments	Security measures involve ensuring data isolation and preventing unauthorized access
Less cost-efficient: hardware and software for each user is paid separately	More cost-efficient thanks to shared infrastructure and platform
Independent maintenance and upgrades for each tenant's instance	Centralized maintenance, updates, and upgrades that apply to all tenants
Slower deployment: each tenant requires individual setup and configuration	Faster deployment: new tenants can be added within the existing setup

Table 1. Single-tenant vs multi-tenant architecture

Considerations when choosing between multi-tenant and single-tenant architectures for SaaS applications

Selecting the best cloud architecture is a crucial choice, and weighing all the benefits and drawbacks listed above can occasionally be overwhelming. The question of whether single-tenant or multi-tenant architecture is preferable should be answered by considering your organization's needs before making a decision. Some crucial factors to take into account are as follows:

• Security
• Cost
• Scalability
• Management

A hybrid cloud allows you to have applications running on your traditional infrastructure, in the public cloud, and in the private cloud. This allows you to take advantage of the advantages of both single tenancies on your IT infrastructure and the multi-tenancy benefits of the public cloud. For instance, you can host your databases and other high-security applications on a single-tenant system while moving your non-mission critical and stateless applications to a multi-tenant system, which is easier to scale and less expensive.

Scenarios where single-tenancy might be preferred over multi-tenancy, and vice versa

Sectors or industries with significant privacy and security concerns regarding customer data may find single-tenant architectures to be more suitable. The healthcare and finance sectors are two such industries.

When handling patient information, for instance, applications in the healthcare industry must comply with HIPAA regulations. To ensure compliance, each hospital may therefore be required to have its own on-site data center. The same applies to certain types of financial data.

Multitenant applications are optimal for developing the majority of user-facing applications. The cloud is multi-tenant. AWS and other cloud service providers utilize identical hardware for multiple clients, invisibly. Although individual customers are assigned unique Amazon accounts, customer information is processed on the same computers.

Multitenancy vs. Virtualization

In a multitenancy environment, multiple customers share common applications, operational infrastructure, hardware, and storage mechanisms. Each application runs on a separate virtual machine with its own operating system in virtualization. Virtualization involves creating multiple virtual servers on the same hardware infrastructure, with layers including SAN for storage, hardware servers for resource allocation, and host servers running virtualization software like Citrix or VMware. Multitenancy refers to software design where one instance serves multiple user groups, with cloud clients sharing computing resources while keeping their data separate and secure. In contrast, virtualization allows for the creation of multiple virtual servers on the same hardware infrastructure, each with its own operating system, providing flexibility and resource optimization.