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  • Blog May 26, 2020

    Business Benefits of Single Tenant vs Multi-Tenant SaaS Solutions

    3 Minutes Read

Finding a SaaS solution that best fits your business model, compliance needs, and culture is perhaps the most important part of an enterprise digital transformation strategy. With the explosion in popularity of the public cloud, multi-tenant solutions are by far the most commonly used, but there are distinct benefits of single-tenancy that might make it a better fit for certain organizations. Let’s take a look at the differences and benefits of single tenant vs multi-tenant SaaS solutions.

What’s the difference between Single Tenant and Multi-Tenant?

tenant-models

Single Tenant and Multi-Tenant refer to two different types of server ecosystems for SaaS products. Single tenant refers to solutions where each client has their own dedicated application, database, and server, and is usually a customized ERP (enterprise resource platform) or in-house application. Multi-tenancy refers to a SaaS product wherein multiple users may share a database or server, but with their own customized UI and secure data storage.

The best way to visualize the difference between single tenant and multi-tenant SaaS solutions is to think of the architecture like housing options. With single tenant, imagine that each business has its own custom “house” or SaaS product. Every aspect of their product is completely customized to fit their needs, and their data is securely siloed in its own space for added protection. Multi-tenant on the other hand is more like an apartment building, wherein each business has a similar space and service level within one SaaS product, but with their own personalized experience and security.

The majority of SaaS products are configured with multi-tenant architecture, and for good reason—multi-tenancy offers many business and cost benefits. There is however also a time and a place for single tenancy, and in some cases, it might be the best option for your organization. Let’s review the differences in benefits between single and multi-tenancy:

Benefits of Single Tenant Saas Architecture

  • Security
    With separate servers for each client, there is no way for anyone outside of your organization to accidentally access your data, as might happen in a multi-tenant configuration. All of your sensitive and proprietary data is siloed and safe.
  • Reliability
    Single tenant architectures are widely considered to be more reliable because the performance of one customer’s software instance is not affected by the performance of another user or instance.
  • Easy Backup & Recovery
    Because your system is backed up to a dedicated part of a SaaS server, it is much easier and convenient to restore or backup your database. Your team can easily access historical information and restore previous settings. In a multi-tenant environment, the process can be much more complex.
  • Simplified Migration
    Exporting and transferring data to a new environment, whether cloud-based or on-premises, is much easier with single tenancy because all of your information is located on one server.
  • Full Control & Customization
    With single tenancy, you have complete control over all features, storage options, security settings, and upgrades on your program. Unlike a multi-tenancy architecture where you must wait for scheduled maintenance or updates, in single tenancy you have immediate service and complete flexibility.

Benefits of Multi-tenant Saas Architecture

  • Cost Savings
    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. Additionally, maintenance and upgrade costs are usually built into the SaaS subscription fee, so there shouldn’t be any surprise charges.
  • Optimum Efficiency
    In order to ensure that all users receive the same level of service, multi-tenant SaaS solutions utilize resources that offer optimum efficiency. Computing loads are balanced between users to provide greater flexibility for the single customer by planning for capacity at the group level.
  • Easy Onboarding
    Multi-tenant software is architected for instant set-up and self-service configuration, which makes the onboarding process easy and user friendly. Customers can customize their account by adding users, data and even third-party integrations and extensions with no administrative support from the SaaS vendor.
  • Streamlined Maintenance
    Maintenance costs are rolled into the price of the SaaS subscription, which saves users from investing in costly on-site technicians and updates. Regular updates and new releases are available to all customers, leading to improved uptime and operational capacity.
  • Scalability & Larger Computing Capacity
    Multi-tenant SaaS solutions are designed to service all sizes of businesses, both large and small. If your computing needs change, the software is easily scalable and elastic to changing demands.

Cons of single-tenant and multi-tenant architecture

When considering which solution is best for your organization, it is important to also consider the drawbacks of each architecture. Single-tenant solutions are much more costly, require more maintenance, and can be less efficient than multi-tenant models. On the other hand, multi-tenant users can sometimes experience more downtime, more in-app disturbances, security breaches, and frustrations with the limited customization options.

How to Choose Between Single Tenant and Multi-Tenant Architecture

Because of the low price point, easy maintenance, and flexibility, most organizations will choose a multi-tenant SaaS solution. Some examples of popular multi-tenant programs are Hubspot, Dropbox, or Salesforce. However, there are still very valid reasons why single-tenancy might be the best option or some companies.

In order to choose the best option or your business, consider what you hope to accomplish with your solution and how your organization operates. Here are some questions to ask yourself:

  • How much control do you need over the application environment?
  • What’s your budget?
  • Do you have robust in-house security expertise?
  • How many users do you need to support for both the short and long-term?

In 2020, over 90% of enterprises will use multiple cloud services and platforms, according to IDC. Understanding what type of tenancy is best for your organization will help you maximize these critical investments.