Single-tenant vs multi-tenant: Which is best for your SaaS app?

Most SaaS apps use multi-tenant architectures. But is it the right choice for your SaaS?

In multi-tenant architecture, all your customers share a single instance of your app but their data remains separate. In single-tenant architecture, each of your customers gets a dedicated instance of your app. Before deciding which to choose, you must first understand how they work.

This article breaks down these architectures in detail and their pros and cons to help you decide whether to use one, the other, or a mix of both.

What is single-tenant architecture?

In a single-tenant architecture, each customer (the tenant) has a completely isolated instance of your app and its supporting infrastructure. This includes a separate database, a separate web server, separate storage, and, in some cases, even dedicated hardware. This is the key characteristic of single-tenant apps — there’s no sharing of resources.

The main advantage of single-tenant architecture is data security. Your customer’s data is essentially stored in a separate database — this means the chances data from one customer instance leaks to another instance are very low.

Single-tenant might be a good choice for you if:

• Your customers have specific security, compliance, or operational requirements.
• Your customers want to host your app themselves.
• You have the resources to support and maintain dedicated instances.

Benefits of single-tenant architecture

• Security and compliance: Since data and resources aren't shared, the risk of data breaches is significantly lower. It's also easier to meet specific data compliance requirements in highly regulated markets.
• Customization: Your customers can customize and configure your app as per their needs since each tenant's environment can be tailored to their specific needs without affecting other tenants. They can customize the application’s look and feel, workflows, integrations, and data management practices to match their unique processes and preferences.
• Dedicated resources: Since each tenant has their own dedicated resources, there's greater control over the environment. This control extends to performance optimizations, security settings, and even specific software versions or third-party plugins, allowing for a personalized setup that fits the tenant's exact requirements.
• Performance: Because each customer has dedicated resources (CPU, memory), the problem of the "noisy neighbor" effect is avoided. This effect often occurs in multi-tenant environments, where a spike in demand from one customer can deplete the resources available to others. If one customer uses more memory, for instance, it won’t affect the memory available for the rest.
• Self-hosting capabilities: Single-tenant apps are very customizable thanks to the isolated environments. Your customers can self-host if they need to. This means they can add or adjust resources without waiting for you to initiate scaling, leading to better handling of peak loads and growth.

Disadvantages of single-tenant architecture

• Costly: Single-tenant apps are typically more expensive to build and maintain. The infrastructure costs alone (for things like databases and VMs) will skyrocket your bills. Of course, you can cover the costs by bumping up your pricing.
• Slower development time: Supporting each individual tenant will drastically slow down the time it takes for you to fix bugs and launch new features. This is because you will need to make sure that your updates will work across every tenant that you support. For critical security fixes, you will need to coordinate with the administrator of each tenant to make sure that they apply your fix as soon as possible.
• Limited scalability: Scaling one single-tenant app is simple, it gets complex as your customer base grows as it often requires scaling each customer’s environment individually.

What is multi-tenant architecture?

In multi-tenant architecture, a single instance of your app serves multiple customers. Unlike single-tenant architectures where each customer gets their own dedicated set of resources (like storage, database, and network), in a multi-tenant setup, these resources are shared among all tenants.

However, each tenant's data is logically separated and isolated from others. So, while all data may reside in the same database, access is controlled and restricted so that tenants can only access their own data.

Security is a paramount concern in multi-tenant architecture and you must get it right. If you have insufficient access controls, you risk a tenant accessing another tenant's data.

The multi-tenant architecture is very common among SaaS apps — you can deploy one instance of your app and provide access to multiple customers via a browser.

Benefits of multi-tenant architecture

• It’s cost-efficient: Computing resources such as servers, storage, and network infrastructure are shared among multiple customers (tenants). This sharing significantly reduces the need for redundant hardware and software resources that would otherwise be necessary in a single-tenant or dedicated environment.
  
  So, you save on the initial infrastructure investment, not to mention maintenance, upgrades, and support costs as it’s distributed among all tenants — the savings also transfer to your pricing structure.

• It’s easy to maintain: A multi-tenant architecture is easier to maintain for several reasons. To start with, a shared infrastructure means you can roll out updates and security patches for all customers simultaneously. Additionally, with all data managed centrally, backup and disaster recovery processes can be standardized.  
  
  If your app requires adherence to regulatory standards, compliance measures, once implemented, apply to all tenants, reducing the complexity and ensuring that standards are uniformly met.

• It’s quick to onboard users: Since the basic setup, configurations, and resources are already in place and shared among multiple tenants, you don’t have to start spinning up an entire new instance of your app every time you bring on a new customer.

Disadvantages of multi-tenant architecture

• Security Concerns: If you have weak authentication policies and a poorly designed database, there’s a risk that one customer’s data could be accessed by another. You could solve this by having a single database instance support multiple databases — one for each customer and properly authenticating users.
• Performance issues: If your app is not designed to scale, it will go down the more users you onboard. Using load balancers, reverse proxies, and containers can help manage the load.

Single-tenant vs. Multi-tenant: Which option is right for your SaaS app?

For SaaS apps, the multi-tenant architecture is almost always the better choice — you can deploy a single instance of your app and serve a huge number of customers, from 1 to 10,000. Adding more features to your app is also easier since you only need to push changes to a single instance.

There are however some cases you’ll want to go with a single-tenant architecture — when security regulations and data protection laws say so and when you want to support self-hosting.

When you need both: Mixed-tenancy architecture

Use cases for single and multi-tenant architectures are not always clear-cut. There are times when you need an architecture with elements from both. This is called a mixed-tenancy architecture.

In this architecture, some customers may have a dedicated, isolated environment for their app or some parts of it at least (single-tenant) while others may share a common instance (multi-tenant).

For example, your SaaS app can have two subscription options — a premium one that stores customer data in a dedicated database and a freemium one that stores the data in a shared database.

Should you build for multi-tenant now or can you change later?

If you’ve landed on a multi-tenant architecture for your app, build it right from the beginning because changing the architecture midway is extremely expensive and resource-intensive — it requires a significant redesign of your system and lots of developer time to refactor and rewrite code. You don’t want to be dealing with this once customers start streaming it, it’ll slow you down.

FAQs

What is the difference between single-tenant and multi-tenant?

In a single-tenant architecture, each customer has a dedicated instance of software and infrastructure while in a multi-tenant architecture multiple customers share the same software instance and infrastructure.

What are the disadvantages of single-tenant?

The disadvantages of single-tenant architecture include higher costs associated with the need for dedicated resources, maintenance overhead, and complex scalability as scaling requires individual resource adjustments for each tenant.

What is an example of a single-tenant?

An example of single-tenant architecture is a customized on premises CRM system configured exclusively for one organization.

What is an example of a multi-tenant?

A common example of multi-tenant architecture is a cloud-based email service like Gmail or Microsoft Outlook.

What are the risks of multi-tenancy?

The main risk with multi-tenancy is the potential security breaches due to shared resources. If not implemented well, one user can access another’s data. That’s why properly designing your database and having strong authentication policies is extremely important.

Next steps

If you're working on attracting enterprise clients with multi-tenancy options, another feature you'll need to consider is Single-Sign-On (SSO). It allows them to securely log in to your app with their corporate Identity Provider (IdP).

Use WorkOS and add SSO for all major IdPs to your app with just a few lines of code.

• Get started fast: With SDKs in every popular language, and Slack-based support, you can implement SSO in minutes rather than weeks.
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• Avoid the back-and-forth: WorkOS’s Admin Portal takes the pain out of onboarding your customers’ IT teams and configuring your app to work with their identity provider.
• Pricing that makes sense: Unlike competitors who price by monthly active users, WorkOS charges a flat rate for each company you onboard — whether they bring 10 or 10,000 SSO users to your app.

Explore Unified SSO by WorkOS.