SaaS Multi-tenant Architecture: Development, Benefits, Examples

Multi-tenant architecture is an approach to designing and developing software for SaaS solutions. It allows a single, generic application platform to be utilized across multiple different business organizations. This application can then be monetized and shared to other startups, giving them the opportunity to use the same SaaS architecture and infrastructure.

Particularly, SaaS multi-tenant architecture provides startups with lower investment cost as well as better resource maximization. To understand how to enjoy these results in your business, continue reading this article.

What is Multi-tenant SaaS Architecture?

Multi-tenant architecture in SaaS is useful in situations that require several organizations, entities, or businesses to access a single application service through a single instance of the software as well as the database servers.

In order to avoid overloading the server, each customer is given a dedicated environment (sometimes called “instance”) and shares the software application and database with other tenants. The term multi-tenancy refers to the “multi” or many tenants sharing the same system and single database.

SaaS Single-tenant vs. Multi-tenant

Single-tenant and multi-tenant architectures are two alternatives to designing software applications. A single-tenant SaaS is designed for a single customer, with all their data stored on the provider’s servers. This is in contrast to multi-tenant software. Customers jointly use infrastructure with the others and have their data stored in a common database.

Single-tenant software is ideal for companies that need an extensive amount of storage or processing power. In such cases, the provider can work with the client to scale the system appropriately.

Multi-tenant SaaS application providers are often used by startups and SMBs that don’t require a lot of customization but do need more storage or processing power than they have available internally. Some multi-tenant SaaS examples include HubSpot, Salesforce, Netflix, and so on.

How Does Multi-tenancy Work?

Multi-tenancy is also known as multi-instance, multi-site and shared hosting. The term multi-tenant comes from real estate (e.g., multi-family dwelling) and means that more than one person occupies the same space (e.g., flat or apartment). SaaS supports multi-tenancy from the basic idea is that many customers can use one instance of the same software, just like a multi-unit apartment building.

In an apartment building, each unit has its own entrance and kitchen but shares walls with other units. Tenants can make relatively minor changes to decorate their unit, but they don’t have any control over their neighbors’ space.

Similarly, using multi-tenant architecture, a SaaS application can deliver one instance of the application to multiple customers, while isolating customer data from the other. So, each tenant’s data is protected from the other tenants. Pre-configured multi-tenant software is a recently popular way to build and deliver software that solves the problems of development speed, deployment flexibility, and support.

Multi-tenancy allows companies to scale up or down easily by increasing or decreasing the number of active customers they host without having to upgrade hardware or hire more people. It’s attractive because there are no upfront costs and hosting costs are fixed on a per-customer basis.

Types of Multi-tenant SaaS Architectures

The SaaS support model multi-tenancy is designed for performance and multiple tenants, there are two types of implementations. The first has one database for each app instance, while the second allows multiple databases for each app instance. Let’s dive into their differences.

One App Instance, One Database

In this type of multi-tenant architecture, a single instance of the software is used to connect with a single database. In other words, all the tenants of the software use a single database. This architecture is scalable and has increased capacity as and when the tenants increase. It also helps in reducing the maintenance cost and provides easy upgrades when required.

However, this model comes with its share of drawbacks. First, since all tenants are sharing a single application instance, changes made by one tenant are likely to impact other tenants’ performance. This is known as the noisy neighbor problem, a phenomenon where a transaction in one application can affect the performance of other applications using the same database. However, a simple project that requires scalability would benefit greatly from using this approach.

One App Instance, Multiple Databases

In this type of architecture, multiple instances of an application are deployed, but each instance has its own database. An advantage of this approach is it allows each tenant to have their own schema while using the same application.

For each application, there is a dedicated database that is maintained independently of others by the application server. This can be a problem, when you need to scale up or down your infrastructure depending on your load and demand. You may have to request additional nodes for your application if you need to scale up. It could be expensive as well. If you plan to monetize your application, then this approach is the best fit.

Benefits of Multi-tenancy in SaaS Application Architecture

Multi-tenancy is more than just a buzzword, it’s multi-valuable. When you consider that the business model of Software as a Service (SaaS) is based on many customers sharing the same infrastructure and resources, it makes sense that there are benefits to this design pattern beyond just cost savings or scale.

Resource Efficiency

One of the biggest benefits of a multi-tenant SaaS solution is that your business can start small and stay small, while still having access to enterprise-level services. Multi-tenancy increases the flexibility and efficiency of network resources because all tenants share them, allowing for better resource distribution. With a multi-tenant SaaS model, you don’t have to worry about building additional hardware or network capacity as your business grows.

Fewer Maintenance Costs

One of the most important advantages of multi-tenant SaaS is that it allows companies to outsource all software maintenance to the provider. It means that you don’t have to devote your own IT resources to keeping software up and running, which frees up those resources for other tasks or investment in other improvements. This is especially useful for small businesses with limited IT resources.

Easier Third-Party Integration

The ease of integrating third-party applications is one of the biggest reasons why multi-tenant SaaS architecture is so popular in today’s technology landscape. A multi-tenant SaaS app has a core set of features that can be used by all users, but it also offers advanced APIs for integration with other software. For example, if your business relies on third parties for logistical support, it will be easier for them to integrate with your multi-tenant SaaS platform than it would be for them to integrate with a single-tenant solution, which may require a unique API just for them.

Scalability

Multi-tenancy also helps you scale your application easily. For one, the resources required to support thousands of tenants are much less than the resources needed to support thousands of instances of one application. It’s also easier to implement upgrades because you’re dealing with one codebase instead of several. Multi-tenant Software as a Service helps minimize risk and cost in the corporate SaaS adoption lifecycle.

Seamless Upgrades

Perhaps the greatest benefit of a multi-tenant SaaS platform is the ease with which system upgrades can be applied. While this might not seem like a great deal when a company is first getting started, as the rollout of upgrades becomes more frequent and the applications become more complex, the ability to push updates to all users quickly becomes important. This is ultimately a great time-saving benefit.

How to Develop Multi-tenant Architecture in SaaS

Multi-tenancy is a delicate system to maintain, but with careful planning and policies, it can create a highly profitable business model for your application or service. This section explains different considerations to make as you build your multi-tenant SaaS application.

Planning Stage

Requirement gathering and analysis are an important part of planning your SaaS infrastructure. You have to analyze your business requirements, understand customer needs, and plan for scaling up or down the infrastructure in the future. The main requirement for a SaaS application is to be easily scalable. The software must be able to serve each customer’s workload as the application becomes more popular.

Tenant Management Policy

As a service provider, you’re often working with a large range of clients with vastly different requirements. Your tenant management policy should outline rules for adding new tenants, changing permissions, and managing existing subscriptions. This way, you can ensure that every user has the right environment for their preferred workflows and resources. Think about the typical workflows and resources these users will require, and divide them into clusters based on shared resources (such as databases) and non-shared resources (such as power and memory).

Data Model & ETL

The data model should be designed in such a way that it can scale as per the requirement of your application. It should be flexible enough to accommodate more users, which means it should be easy to add new columns, tables, or fields for storing additional information about each user. This will also reduce development time and cost, as you won’t have to go through multiple iterations when adding new features or making changes to your database structure.

Security

A multi-tenant application must be designed in such a manner that data remains secure at all times. The database should be partitioned into separate database files for each tenant, preventing one client’s data from being accessed by other clients. Similarly, there should be an added layer of security to prevent one client from accessing another client’s data.

Furthermore, the database should have access controls on each data item. This means that if a tenant tries to retrieve a particular record, he or she is only allowed to see his or her own data.

Isolation

There are various types of isolation in a multi-tenant architecture. Compute isolation refers to the ability to isolate tenants from each other from a computed resource perspective. A tenant in a multi-tenant application might require that the application have different CPU, memory, and storage configuration for their instance of the SaaS application.

The gateway should also provide isolation among clients at the network level. In order to host multiple clients who run their own applications on a single server, you need to build a network that is isolated but still provides the required connectivity.

Data isolation: For many SaaS applications, it’s important to store the data for a single tenant (customer) separately from other tenants in the same system. This isolation is critical for the security and privacy of data belonging to customers.

Why Choose ProCoders for SaaS Multi-tenant Application Development

ProCoders has been transforming businesses with our software development solutions for many years. To build a SaaS product, we offer the latest technologies and trends, as well as a team of talented and experienced web developers for hire and consultants who can deliver your project on time, every time.

One of our recently executed SaaS projects involved a collaboration with the Israeli company, Frontegg, a SaaS company that provides development solutions to other SaaS companies. Frontegg had a small local team but needed to augment its staff. The management decided that offshoring was the best option to circumvent Israel’s difficult registration processes.

ProCoders partnered with Frontegg to determine the talents required and we put a team together quickly. This resulted in a 25% faster product release and reduced human development costs by 38%.

Conclusion

The SaaS multi-tenant architecture on cloud has found wide adoption in the software industry. This is largely due to the fact that it offers many major advantages over other models. Multitenancy in SaaS application architecture, in particular, continues to gain momentum with companies of all sizes adopting it due to its scalability, flexibility, cost, and security benefits.

Whether you’re looking to implement multi-tenant architecture into your SaaS application or build a new application from the ground up, using a reliable service like ProCoders’ is the way to go. You get flexible talent assembly and staff augmentation, as well as world-class infrastructure to fulfill your software needs. Send us a message today.