Selecting SaaS Solutions: Single-Tenant or Multi-Tenant Architecture

Software as a Service (SaaS) is a cloud computing model that delivers software applications over the internet on a subscription basis. In a SaaS solution, the software is hosted and maintained by a service provider, often referred to as a SaaS provider or vendor, in their data centers or the cloud.


Selecting the right SaaS solution is a critical decision for businesses. With the growing popularity of cloud computing and the need for scalable, cost-effective software solutions, the debate between single-tenant and multi-tenant architectures has become increasingly important. In this article, we will explore the differences between these two approaches and discuss the concept of tiering and throttling by AWS for managing multi-tenancy. This will help business decision-makers to make a more informed decision while selecting their SaaS solution according to their business needs.

Single-Tenant vs. Multi-Tenant Architecture

When it comes to delivering software, there are two main approaches: single-tenant and multi-tenant architecture. These choices define how software is set up to serve multiple users or customers. 

Single-Tenant Architecture

In a single-tenant architecture, each customer or tenant has their dedicated instance of the software. This means that for every customer, there is a separate and isolated environment where the software runs. These instances are entirely independent of each other, and each customer’s data and processes are isolated and don’t interact with those of other customers.

Here is why a single-tenant architecture is the preferred choice:

Dedicated Resources: Each customer has their dedicated set of resources, which could include servers, databases, and other infrastructure components. These resources are not shared with other customers.

Isolation: Data and processes are completely segregated. This isolation is ideal for applications that require a high level of data security and privacy.

Customization: Single-tenant solutions can often be customized extensively to meet the specific needs and preferences of individual customers.

Predictable Performance: Since resources are not shared, single-tenant environments typically offer predictable and stable performance.

However, single-tenant architecture comes with its own set of challenges:

Higher Infrastructure Costs: Maintaining dedicated instances for each tenant can be costly. It requires more hardware and resources, which drives up the infrastructure costs.

Manual Updates and Maintenance: With each tenant having their own instance, updates, and maintenance must be carried out separately for each one. This can be time-consuming and resource intensive.

Single-tenant architecture is often the top choice for businesses that need to keep their data secure, customize their software a lot, and make sure it runs smoothly all the time.

Multi-Tenant Architecture

Multi-tenant architecture, on the other hand, hosts multiple customers or tenants on a shared infrastructure. While this may seem like a less secure option, modern multi-tenant architectures are designed to ensure robust isolation between tenants. This approach offers significant advantages in terms of cost efficiency, scalability, and ease of maintenance. It also allows for rapid updates and feature releases.

Multi-tenant architecture is generally preferred when:

Cost Efficiency and Scalability Matter: For businesses looking for cost-effective solutions, multi-tenancy is a good option. It is like sharing an apartment building with others to split the bills.

Frequent Updates and Feature Rollouts Are Vital: For SaaS providers that want to deliver a dynamic and evolving service, multi-tenant architecture allows for the rapid deployment of updates and new features. It is like living in an apartment building that gets improvements for everyone.

Balancing Customization and Shared Resources Is Achievable: Multi-tenant setups can be adjusted to give different levels of customization while still sharing resources efficiently. It is like having a personal apartment space while enjoying shared services and facilities in the building.

Multi-tenant architectures offer excellent cost-efficiency and scalability benefits, but they must be carefully engineered to ensure the security and performance of each tenant’s data and resources. Just as one would expect security and privacy in a shared living space, multi-tenant systems must provide the same level of safety and isolation. 

Tiering and Throttling in AWS for Multi-Tenancy

Tiering and throttling in AWS for multi-tenancy are like managing resources and actions in a fair and organized way when multiple customers use the same software. It is essential because it keeps everything running smoothly.


  • Tiering is putting customers into different groups based on their needs or what they have paid for.
  • Some groups get more computer power, memory, or storage than others. This is to make sure that those who pay more or have higher needs get what they expect.
  • It also helps set different prices for different groups, so everyone can choose what suits them.
  • Tiering ensures that the software runs fast and remains available, particularly for those with higher demands.


  • Throttling is akin to setting speed limits on the road. It controls how fast customers can do things in the software.
  • It is crucial to prevent any single tenant from using too many resources and slowing things down for others.
  • Throttling helps ensure that everyone has a fair turn and a good experience.

Tiering and Throttling help SaaS providers make sure that everyone gets the right resources and a fair share, like sorting customers into groups and controlling how fast they can use the software. This keeps things working well for everyone. 


The decision between a single-tenant and multi-tenant architecture for a SaaS solution is a crucial one and should be made with careful consideration. It’s not a one-size-fits-all choice, as both options have their advantages and trade-offs. Single-tenant architecture provides a private, highly customizable environment with dedicated resources and robust security. However, it comes at a higher cost and requires more substantial maintenance efforts.

On the other hand, multi-tenant is like sharing an apartment building with others. It’s cost-effective, easy to expand, and updates quickly. However, it needs extra care to make sure every tenant’s data stays safe and has good performance.

The ultimate choice should align with specific business requirements, customer expectations, and long-term objectives. It may even involve adopting a hybrid approach that combines elements from both architectures to strike an optimal balance.