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Single- vs Multi-Tenant: Everything You Need to Know About Cloud Application Environments

May 10, 2022 | Oro Team

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Originally published January 12, 2021, updated May 10, 2022 

When reading about how eCommerce software applications are used, you might have come across the term “tenancy.” The dictionary will tell you that tenancy is the possession of a piece of property over a period of time. In cloud computing, tenancy has a similar meaning: it refers to an infrastructure (IAAS) and platform/software (PAAS/SAAS) shared among different customers.

Let’s consider an apartment building. It contains many common elements, such as exterior walls, mechanical equipment, utilities, and so on. That’s your IAAS. HOAs or apartment managers charge property management and maintenance fees – but unlike maintaining a house, there’s way less hassle and cost associated with managing an apartment. Similarly, your PAAS and SAAS server provider takes care of the upgrade process and maintenance, so you don’t have to.

What Is a Multi-Tenant Cloud?

Like apartments, a multi-tenant cloud architecture offers multiple tenants storage and access. But sharing comes with some downsides. Just like having unpleasant next-door neighbors, some brands will use more shared resources than others.

While it’s not completely impossible to address this issue at the hypervisor or architecture level, a single-tenant cloud architecture could be a more attractive proposition. In either case, there are many decisions IT teams must make in order to ensure their operational objectives are met.

single vs multi tenant architecture

What Is a Single-Tenant Cloud?

A single-tenant cloud describes an architecture in which a single software instance and supporting infrastructure serve one customer, whereas a multi-tenant instance serves multiple customers. 

Single-tenancy is commonly implemented in software-as-a-service (SaaS) delivery models or in a private cloud service. In single-tenancy architectures, a singular instance of a SaaS application is dedicated to a single customer.

Single-Tenant vs Multi-Tenant

To continue the real estate analogy, a single-tenant environment is like a single-family house. Like in single-family homes, single-tenant customers share municipal utilities with their neighbors (IAAS), but the walls, roof, and HVAC systems (the B2B SaaS single software instance) are theirs.

So what sets single vs multi tenant environments apart? The main difference between multi tenant and single tenant is the number of software instances on each. A single-tenancy consists of one platform user running a single platform codebase on their website. With multi-tenancy, the single instance of the codebase is shared between multiple users. As illustrated by the image below, the multi tenant system reduces costs but does so at the expense of user interface convenience and control.

single tenant vs multi tenant architecture

So how do single-tenant SaaS applications support more complex environments, like B2B?

According to Xngage CEO and Chief Digital Executive Joe Albrecht:

Single-tenant cloud services and solutions can combine advantages such as scalability, elasticity, and managed infrastructure and platform services with the need for data security, customer data segregation, regulatory compliance, integration into back-office systems, and organizational control, often found in B2B environments.
Joe Albrecht, CEO and Chief Digital Executive of Xngage

In this post, we will examine the difference between single tenant and multi tenant environments and the benefits and drawbacks of their use in eCommerce.

  • Setup and maintenance

With single tenancy, the customer must deal with higher maintenance costs. It demands maximum resource usage during setup, maintenance, or customization. Since eCommerce vendors must maintain new single tenant instances for each new user, these costs are usually transferred to the customer.

Multi-tenancy architecture can be a more economical option because management costs associated with maintenance are shared across the multi tenant SaaS architecture, thereby allowing for more efficient resource usage. It also requires less effort for setup, upgrades, and maintenance, as the vendor usually performs these functions.

Verdict: When compared to a multi-tenant setup, setting up a single-tenant eCommerce environment can take more time and effort. It requires more upkeep and resources to maintain the dedicated infrastructure. At the same time, single-tenancy gives you more control to optimize these activities.

  • Speed and performance

The main factors impacting performance in a single-tenant setting are the demands placed on the software application, infrastructure, and the hardware supporting the environment. A multi-tenant environment adds to these layers, which can impact both the overall system and individual tenants.

It’s important to note that many modern multi-tenant systems utilize advanced mapping and resource distribution mechanisms. Some multi-tenant vendors also offer heightened performance and dependability to their customers for an additional cost. 

Verdict: Since the performance of a single-tenant application is not affected by another’s performance, this specific environment is the better-performing of the two. It’s a great choice for large, established brands as well as for smaller brands on a growth path.

  • Backup and restoration

A single-tenant application gives you more control over backups and recovery. Since a backup includes both the underlying code and data structure of a single instance, this process is straightforward and allows for easy restoration to any previous version.

Many multi tenant solutions either have complex backup procedures or don’t offer any backup at all. For those that offer premium or dedicated software backup options, not all vendors can satisfy the data and security policies of every customer.

Verdict: If you need to quickly and easily back up your eCommerce applications on your schedule, your best bet is a single-tenant option. If you’re considering multi-tenancy, make sure their premium and dedicated backup features are sufficient for your needs.

  • Security and dependability

In a single-tenant setup, your environment is yours and yours alone. Without shared elements, there are no possible data accessibility points between different tenants.

In a multi-tenant setup, by contrast, there is only some isolation of single and shared databases. With more access points, attackers can more easily take advantage of systems or exploit their vulnerabilities. For customers, this translates into a higher chance of being targeted with a malicious attack.

Verdict: No matter how good a multi-tenant architecture is, at the end of the day a single-tenant eCommerce environment will be more secure. With a single-tenant system, every instance is completely separate from every other. There are no elements shared between tenants, making a single-tenant option more dependable and future-proof for many businesses.

  • Scalability and efficiency

A single tenant architecture is considered more scalable and reliable when pitted against multi-tenant apps. In a single-tenant model, every single client has their own virtual machines and host same hardware.

In multi-tenancy, since resources are shared, they can be utilized more effectively by the vendor. A multi-tenant system can shift computing resources where needed, and when combined with storage and hardware virtualization, can help reduce vendor costs.

Verdict: If you want scalability, single-tenant is the way to go. You can run your eCommerce instance locally or use your own virtual machines and hardware. Unlike the multi-tenant setup, another tenant’s data and activity won’t affect your performance, and you can scale capacity quicker as demand changes.

  • Control and customization

With single tenancy, the customer gets more control over what’s included in their software. From updates, to upgrades and maintenance schedules, customers get more flexibility in managing their environment.

A multi-tenant environment offers less control, so many features remain universal for all tenants, while only a select few are open to customization by the customer.

Verdict: When the time comes to customize your eCommerce store, a single-tenant environment makes it easy. That’s because a single-tenant platform allows for more things to be tracked and adjusted, giving you more control over how the software looks, feels, and behaves. Furthermore, there’s always an option of installing additional software components, which is rare with multi-tenant software.

How to Build a Reliable and Secure OroCommerce Infrastructure

5 Reasons to Go Single-Tenant in B2B eCommerce

multi tenant architecture

At first glance, multi-tenancy might seem like an attractive, cost-effective architecture. It reduces some costs and complexities for both eCommerce vendors and customers. For example, the customer’s costs are reduced since updates and fixes only need to be applied once. However, customers also have less control and flexibility over their eCommerce environment. Let’s take a look at some reasons when you should select a single-tenant one whether you run a B2C or B2B eCommerce business.

1. You need to maintain a competitive advantage in your industry

Since multi-tenant applications share features that are used and marketed by everyone, they limit how businesses can compete with each other. Also, remember that multi-tenant customers are all subject to upgrades and maintenance at the same time. This can be a real problem for sellers that operate in different time zones as the maintenance schedule can fall during their peak hours.

2.You want full operational control over your environment

For B2B sellers in highly regulated businesses or serving demanding customers, having complete control of their eCommerce operating environment is only possible with a single tenant system. Whether it’s the implementation, the framework, or built-in settings, more control means a unique eCommerce experience. This flexibility is crucial for conducting improvements and optimizing a large business.

3. You require top-notch security capabilities

Built-in security systems offered by multi-tenant eCommerce platforms may be inadequate for some businesses. After all, there is a chance (although remote) of data breach, as the personal data could leak from one eCommerce store to another. While security concerns may not be critical for most small B2C stores, it could be a deal-breaker for larger B2C and B2Bs that deal with large volumes of SKU in supply chain, multiple customers, or revenue.

4. You have complex business hierarchies

If your organization works with or delegates specific responsibilities to business partners, a multi-tenant solution may pose a security risk. Some eCommerce businesses have complex back-office hierarchies that involve other companies. Others utilize in-house security expertise with their own software protocols and guidelines. A single-tenant system can accommodate these and other business requirements.

5. You need a future-proof platform

While a multi-tenant framework is a comfortable option with fast onboarding and simpler upkeep, it’s not the ideal solution for all. Large, discerning businesses need the flexibility and SKU management support offered by single-tenant systems. They can’t let growth impede their success. These businesses need the flexibility to pivot and expand to new markets, and they need platforms that keep them at the cutting-edge of their industries.

The Pros and Cons of Single-Tenant and Multi-Tenant Applications

Single tenancy Multi tenancy
Long-term affordability +
“Hands-free” maintenance +
Setup and onboarding +
Speed and performance +
Backup and restoration +
Security and dependability +
Flexibility and customization +
Scalability and growth +

Many B2B eCommerce businesses are highly complex and require additional control over their environment. Brands looking to build a presence in their markets and future-proof their business are best served by single tenancy architecture.

How Animal Supply Company Solidified Their Business With Single-Tenancy

Just as you’d rather house a family of five into a single-family home rather than a small apartment, the same is true for businesses. Single-tenancy is a scalable, proven, and often, the only logical solution for established businesses looking to grow and expand their reach with the stability and security of cloud-based eCommerce solutions.

It’s the approach taken by Animal Supply Company (ASC), a leading pet goods distributor and retailer in the United States and the Caribbean. Over decades of organic growth and growth through mergers and acquisitions, ASC now operates a web of regional warehouses and support centers across the US. 

As ASC inherited new warehouses, ERPs, and legacy systems, their operations grew more and more fragmented and complex. They needed a way to break down their data silos and streamline the buying experience for their retailers, partners, and business customers.

As a rapidly growing brand, ASC could not compromise on capacity demands, scalability, or connectivity. They had no room for less-than-perfect security protection for their partners, customers, and couldn’t compromise on eCommerce PCI compliance. Therefore, ASC required a sophisticated, robust B2B eCommerce platform that would support dozens of ERPs and complex eCommerce workflows demanded by their retailers. 

ASC wasted no time in choosing between single tenancy and multi-tenancy architecture. Only a single-tenant system could support ASC’s order management and headless platform, positioning them for continued growth in their industry. 

How national pet food supplier manages multiple ERPs and warehouses

Making the Right Decision for Your Business

Multi tenant vs single tenant environments both have unique properties that make them great for a range of applications. Now that you know the pros and cons of single-tenant and multi-tenant systems, which one is right for your business? 

Multi-tenant architecture is quickly evolving, and for many small-scale B2C eCommerce businesses, it’s a great starting point. However, forward-thinking software development teams, growing B2C, and B2B eCommerce brands should give serious consideration to a single-tenant architecture. When it comes to scalability, security, and added control, there’s just no other equal.

For B2B eCommerce businesses, in particular, the granular control offered by single tenancy architecture is vital. For these companies, typically large enterprises, the store customization options, optional configurations, the ability to back up data, and exercise control over maintenance are mission-critical.

The more you can control your digital environment, the better you can fine-tune for more efficiency, higher sales, and a better experience for your customers.

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Frequently Asked Questions

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

Choosing a multi tenant or single tenant environment can be tricky. Single tenant architecture uses a software application and a database for each tenant (client), whereas multi-tenant means an architecture in which every instance of software app is serving more than one tenant (client). 

With single-tenancy, clients can’t share the same database or application between them. Single-tenant architecture has a specific design, making it unique since it allows only one instance per every B2B SaaS environment.

The multi-tenant architectures have become the standard within the enterprise SaaS environments, enabling its users to make significant customizable changes within their operating environment.

What are the benefits of single-tenancy?

Here are the key advantages of single-tenant architecture: 

  • Increased security
  • Reliability 
  • More control over backups
  • It’s less complicated when moving to q self-hosted environment
  • Full control over your server environment

What are the benefits of multi-tenancy?

Here are the key advantages of multi-tenant architectures: 

  • Affordable cost because all resources are shared
  • Easy to set up and onboard
  • They require less maintenance because system upgrades and update maintenance are usually handled by the multi-tenant SaaS company
  • Efficient use of resources
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