Single-Tenant SaaS vs. Multi-Tenant SaaS Solutions

Early in our careers, we built a database-driven “web 1.0” catalog search system. What started as a project for one client grew to be an industry standard solution for a vertical market. At first, it was no problem because customers typically had relationships with one or two of the companies we served. Over time, though, what the market needed was aggregation. That is, they didn’t want to go to individual websites to search — they wanted one site that had them all. Fast-forward to years later when we worked on a system that aggregated all clients into one database. As a result, we couldn’t easily provision resources to meet individual needs. These examples illustrate the concept of single-tenant versus multi-tenant solutions. Single-tenant SaaS serves individual clients with dedicated instances and customization (like our first model), while multi-tenant SaaS hosts multiple clients on shared infrastructure using a single codebase and shared resources (like our second example). We will explain the merits and limitations of single-tenant vs. multi-tenant SaaS solutions. Hint: it’s not always obvious which one is better.

Advantages of Single-Tenant SaaS Solutions

Customization

In our original model, every client had their own sandbox. This architecture enables tailored solutions for individual clients, with customization and specific configurations.

Enhanced Security

Single-tenant SaaS provides greater data isolation and security, reducing the risk and reach of data breaches or unauthorized access.

Scalability

In single-tenant SaaS systems, it’s easier to scale and modify to address individual client needs without affecting others.

Disadvantages of Single-Tenant SaaS Solutions

Costs

Development, maintenance, and infrastructure costs are higher due to individualized, isolated solutions.

Resource Intensive

Single-tenant SaaS requires more resources for management and updates for each client, potentially reducing efficiency.

Deployment Time

It takes longer to deploy because each client’s solution needs individual set-up (that was a major task in our first model!).

Advantages of Multi-Tenant SaaS Solutions

Cost-Effective

Multi-tenant SaaS lowers infrastructure and maintenance costs due to shared resources among multiple clients.

Efficiency

It’s clearly easier to manage, update, and maintain multi-tenant SaaS system that share a single codebase for all clients.

Scalability

Scaling with multi-tenant SaaS solutions is straightforward since resources are shared among clients.

Disadvantages of Multi-Tenant SaaS Solutions

Less Customization

Customization is limited when the same software instance serves multiple clients. Feature flags help but add complexity.

Security Concerns

The bigger they are, the harder they fall! There are higher security risks with bigger systems that share resources, although measures can mitigate this risk.

Dependency Issues

If an issue occurs, it can affect all clients sharing the system.