Single-Tenant SaaS Vs Multi-Tenant SaaS Architecture - Which Suits Your Business Better?

(1) Control Over Operations and Customizability

The application developed for a single-tenant environment comes bundled with a wide range of controllability enhancement features. You can use these features to customize the workflow of the SaaS applications and align it with your business goals. Single-tenant software allows you to brand your software instance to match the theme of your organization, this is very important for a business that wants to stand out from the competitors and develop its own identity.

Additionally, you have the option to integrate your SaaS software into your pre-existing CRM & ERP systems, or even a third-party software without any hiccups. This helps your business to streamline workflow, increase productivity, enhance customer experience, and much more. 

(2) Enhanced Security

In a single-tenant SaaS application, each instance of the software is completely isolated from a similar software instance with absolutely zero point of contact, and each user is allocated a personal server to proceed with their business operations. So, even if one of your neighboring tenants was attacked by an unwanted foreign agent, your application and business data will be completely safe.

(3) Easy Backup and Restoration

In a single-tenant architecture, the system assigns you a personal space within the cloud for the storage & backup of your business data. You can schedule the frequency of this backup either to an interval-based backup system or a real-time continuous backup model to make sure your cloud is updated as frequently as possible. This is crucial in situations where your business data gets corrupted due to an unknown reason, you can use the data stored in the cloud as a backup point to restore the application to the latest non-corrupted version without losing any major information.

(4) Reliability

Every single-tenant architecture provides its clients with a personal environment to operate. This means that the application instance is isolated from any operational disruptions or security breaches that happen elsewhere, making the performance of the entire architecture much more reliable.

[1] Expensive to Own

Personalized servers, customizability options, and enhanced security come at a price. Businesses, especially the small to mid-scale ones may struggle to afford a single-tenant application. This means they either compromise on the features by using only a handful of them or they have to completely scrap the idea of choosing this format.

[2] Maintenance is Complicated

More features mean more complexity, leading to more issues. Depending on the terms of the agreement signed, the tenant can be liable for fixing a number of these issues themselves, which may lead to frequent disruptions in the workflow. In certain scenarios, you will be responsible for the maintenance of the entire application, which means you have to hire a team of experts for the job, further stacking up your expenses.

[3] May Have to Struggle in Certain Scenarios

The enhancement options of a single-tenant SaaS application come mostly as a gift but they can often take the form of a curse as well. If not handled properly, the combination of the increased complexity of the application due to these enhancements and the isolated nature of a single-tenant architecture makes it difficult to integrate this application with other services. It also limits the scalability of the application as the service provider has to assign you a separate server every time you wish to scale your business.

(a) Reduced Costs

Since you are sharing the server with other tenants the subscription cost of the service is significantly lower compared to the previously mentioned architecture. This particularly benefits small-scale businesses as they can capitalize on the enhancements that SaaS applications provide without decimating their entire budget.

(b) Scalability

The multi-tenant application is pretty much similar for every user, and multiple users can share a single instance of the software. This makes it easier for businesses to scale the model as a new customer can subscribe to the services anytime to get identical benefits to someone who has been using the services for a long time now. Additionally, it is super easy for service providers to add and remove tenants depending on the contract norms, unlike single-tenant SaaS applications.

(c) Reduced Maintenance Responsibility

The multi-tenant application is pretty much similar for every user, and multiple users can share a single instance of the software. This makes it easier for businesses to scale the model as a new customer can subscribe to the services anytime to get identical benefits to someone who has been using the services for a long time now. Additionally, it is super easy for service providers to add and remove tenants depending on the contract norms, unlike single-tenant SaaS applications.

(d) Improved Efficiency

Since you use your application instance simultaneously with other tenants, the resource available in your environment is used to its absolute potential. Additionally, as multiple users share a common space for operating the application, the instance is typically designed to handle high-capacity operations to avoid technical failures.

1. Increased Downtime

Just like a noisy neighbor disrupts your living conditions in real life, sharing the server with a noisy tenant can disrupt your workflow and make your business less reliable. How? In case your neighboring tenant had a sudden traffic surge on their server, the tenant will “borrow” a majority of the resources from the server for themselves. Making the entire application instance slow and unresponsive, which sometimes leads to server failure. So, even though it was not your fault you may have to face additional downtime because of someone else.

2. Limited Customizability

The users of a multi-tenant SaaS architecture often complain about the limited customization options available. Having multiple users in the same instance restricts the vendors from giving a single user with full access to customize the application as it can oppose the preferences of other users on the same server. This is why most multi-tenant SaaS applications that you come across have a very generic design that serves the preferences of a broader domain of users.

3. Security Issues

Your business shares the database with other users in a multi-tenant application which means that your business data is not completely isolated. Now, in case one of your neighbors was exposed to a cyber attack, the entire data on the server (including your business data) will be vulnerable.

[a] Size of Your Business

1. Single Tenant SaaS: If your business is operating at an enterprise level with complicated customization needs, a single-tenant SaaS application should be your preferred architecture.
2. Multi Tenant SaaS: In the case of a small to midsize business that is looking for a rather simple application with standard operational features, a multi-tenant SaaS should be the more obvious choice.

[b] Expected Scalability

1. Single Tenant SaaS: It is preferred to go for a single tenant architecture when the footfall on your application is predictable and you can pre-plan to scale your business based on the workload changes.
2. Multi Tenant SaaS: Recommended for businesses with a fluctuating user base as it is easier to scale up and scale down as per the workload changes.

[c] Budget for the Project

1. Single Tenant SaaS: The specifications of a single tenant architecture include a dedicated infrastructure along with multiple customizable features and high-security standards. This makes the overall cost of development inclined towards the expensive end of the meter.
2. Multi Tenant SaaS: Since you share your infrastructure with other tenants and operate with standard features without actually owning any piece of infrastructure, the budget for operating within this architecture is relatively lower.

[d] Customization Requirements

1. Single Tenant SaaS: As you have an isolated environment with full control over the assigned cloud space, the scope for customization is very high.
2. Multi Tenant SaaS: Sharing the environment with other tenants limits the flexibility of your SaaS application, limiting the scope for customization.

[e] Security and Compliance

1. Single Tenant SaaS: If your business model demands high-security standards, single-tenant architecture can be a perfect match due to its isolated working environment. Industry-specific protocol compliance is also supported.
2. Multi Tenant SaaS: Multi-tenant SaaS does not provide you with an isolated working space, however, it still has standard security & compliance measures, although they are not as reliable as the previously mentioned architecture.

[a] Hybrid SaaS Architecture

If you are looking for a SaaS application that has minimal latency, then the cloud-based services we discussed so far won’t be the best choice for you. In this situation, a hybrid architecture can be a better choice for your business as you can combine an on-premise architecture with a cloud-based architecture.

For example, consider you have a retail business with a busy storefront, and you want a system that can update your inventory data quickly. However, if the data is stored in the cloud the latency levels are high which affects your workflow efficiency. In this scenario, you can install an on-premise solution to process the inventory data in real time with minimal latency. However, you’re still gonna need the cloud-based services for tasks like user authentication, making the hybrid architecture an ideal choice in this situation.

[b] SaaS Microservices

Let’s say your business model needs multiple independent components to deal with separate business sectors. So naturally, instead of investing in a monolithic architecture designed to cater to a single aspect of the business you’d want a solution that can cover multiple use cases. In this situation, cloud-based SaaS microservices will be the perfect match for your business. 

Consider a medical establishment that automates the services such as patient registration, medical record extraction, and automated payment settlement. As all of these services belong to separate aspects of the business, developing a dedicated SaaS application for each service will be pretty expensive & complicated. Alternatively, the implementation of microservices for these operations can make the process much more efficient. 

[c] Serverless SaaS

Some businesses want to avoid the hassle of managing a server so they let the cloud service providers manage it for them. Using serverless architecture helps businesses to spend less time on maintenance and more time working towards their business goals. However, it’s not all a fairy tale, operating on a serverless architecture limits the complexity of the model. This means your business might have to use multiple application instances which may add to the complexity of the entire SaaS solution.