Why is multi-tenant architecture the optimal option for SaaS

Why is Multi-tenant Architecture the Optimal Option for SaaS Application Development?

Cloud technology is one of the biggest gifts to modern-day businesses. It allows them to reduce their operational costs and offers an unbeatable userexperience at all levels.

According to a study by Gartner of 2019, the cloud computing Services and SaaS industry would grow into a 143.5-billion-dollar industry by the year 2022. And we can tell you it is going to happen. About every industry in the world is adopting this new way of business operations. It is a fast-growing trend that is unstoppable.

But when it comes to choosing the right architecture for building a cloud infrastructure, the tech community questions the efficiency of single-tenant and multi-tenant SaaS database design.

If you ask us, there is no simple way to answer it other than to look at the multiple factors that constitute the process. It all depends on the need of the business and application to achieve the right results. As a business owner, you might be interested in knowing everything there is to steer clear of making any wrong decisions for your business. And today's blog, we would be discussing multi-tenant architecture.

Single-tenant Vs. Multi-tenant Design

SaaS or Software as a Service is a cloud service that allows you to access your business data remotely through various devices. It gives you more flexibility in the operations and improves your productivity to a great measure.

This is where the decision of single-tenancy and multi-tenancy arises. Here is a detailed introduction to it.

  1. What is tenancy? And single-tenant and multi-tenant architecture?

Tenancy is used to define the exchange of computing resources in a software environment.

Single-tenant architecture refers to the use of an isolated database, storage, and web server. Single-tenant is basically the owner of an application. The approach is usually more appropriate for the larger enterprises with a hierarchy in need of maximum customization and high-end data security solutions.

The multi-tenant approach is more cost-effective and modern. It allows clients to run sophisticated applications and large databases immediately. It eliminates the need to maintain infrastructure and allows them to save storage, hardware, and CPU costs. This reduces the cost of operation.

You can use services such as Gmail, Google Drive, Dropbox, Shopify, and more. It is a perfect solution for startups, medium-sized businesses, and small IT teams.

Single Tenant Architecture

A single tenancy is an architecture that allows the development of software applications and supporting infrastructure for one customer. In a single-tenancy architecture, the SaaS infrastructure would be dedicated to a single customer and will have a single instance dedicated to them.

The hosting provider will manage the software instance and dedicated infrastructure.It gives full control over the data and operations to a single person, such as for customization of the software or infrastructure.

  1. Characteristics

Single tenancy gives complete control to a single user. It provides higher user engagement, and it allows you to perform various tasks. It is reliable and secure, and you can make a backup of the data too.

The architecture of the infrastructure is totally different as the tenants are placed in different environments. They are not bound in the same way and do not share the infrastructure.

It is perfect for gaining control over data and business operations. It provides the flexibility of changing the environment and meet the business needs.

  1. How does it work?

Single tenancy architecture gives you complete control over the database and software. The data is isolated from one another, and the architecture is designed to only allow one instance per SaaS server.

It is designed to meet your unique needs; you can customize the user interface after the installation. After the software is installed locally, the tenant can customize the product to meet your unique needs as per the specific environment and does not have access to any underlying code.

Single tenancy allows you to isolate the data in the backup. It saves you from any data loss, and it is easy to restore data. It also makes installing updates fairly easy, as you don't have to wait for the service provider to do so.

  1. Benefits of Single Tenancy

Single tenancy is not very common, and the reason is it is costly. Also, it is not well-suited for small and mid-sized businesses or startups. But it has many benefits for large enterprises. Here are some:

  • Data is independent of other potential tenants, which gives you more control.
  • It is a reliable solution; data security sits at the core of this approach, and even if there is a breach in one's environment, other tenants would be safe from the breach as the data is not stored in the same environment.
  • Since all the customer data is separate, you can make customization to your environment without impacting other environments.
  • It is performance-driven and is based on only one instance instead of many from different tenants.
  • Quick recovery is another benefit.
  1. Drawbacks of single tenancy

There are many reasons why single tenancy is less common than other architectures. Looking at some of the drawbacks will help you understand why.

  • It is pricey as the setup time, resources, customization, maintenance, hosting of SaaS instance per customer is labor-intensive.
  • Since the tenant is given so much power to manage the single-tenant environment, it takes more time to update, upgrade and manage.
  • The learning curve is much larger than in any other architecture. Learning implementation and customization in a single tenancy, SaaS would require some training.
  • It is a less optimized system, and not all the resources are well-utilized. This makes it less efficient.

Multi-Tenant Architecture

Multi-tenant is the opposite of single-tenant architecture. Wherein, Single Tenancy gives full control to one single person, multi-tenant is an architecture where a single instance of software would run on a server and serve many customers at a time. In a multi-tenant environment, the existing customers can use the same hardware and data storage. It creates a dedicated instance for each customer. The data is isolated and remains invisible to others. Meanwhile, it is running on the same server.

  1. Characteristics

Multitenancy is an affordable solution for serving multiple customers. It is much cheaper than a single tenancy, and the cost for the environment is shared. Typically, the savings from the SaaS vendor can be used for building the cost of software development, and thus, it is more budget-efficient.

Many characteristics of multi-tenancy architecture are similar to that of virtualization. The difference is in virtualization separate virtual machine is involved with its own OS. Multi-tenancy eliminates the need for it, as it uses one code base and one database for all the clients.

2. How does it work?

Multi-tenant architecture is very different from single-tenant architecture as it does not isolate the environment for different users. It allows developers to streamline and simplify the access points.

It all started with the trend of creating an organizational layer to keep everything together. This was the birth of multi-tenancy. The architecture allows developers to create a multi-user environment that shares a database and the related applications. Fundamentally, some organizations use both a single tenancy and multi-tenancy approach for developing the SaaS infrastructure, for example,LogicBay.

Multi-tenant architecture is a good approach for businesses with less budget. It provides you cloud integration services through which more data can be migrated off the premise and over to the cloud. It improves flexibility in operations, improves decision-making in users, and diversifies your data sources.

Since data becomes more accessible, it streamlines the data and makes data mining more simplified. It allows data accessibility by customers within a single database schema. Releasing data to code individual client desktops and servers becomes much more simplified as the package is only required to be installed on a single server.

  1. Benefits of Multi-tenancy

Here are a few benefits of multi-tenant SaaS architecture that you might be interested in:

  • Resource Distribution:

Resource distribution is very efficient as it does not waste a budget on development, delivery, and support. They don't need any hardware upgrades or network capacity to provide you scalability; it is a powerful architecture.

  • Maintenance Free:

Maintenance of single-tenant architecture is costly, but with multi-tenant architecture, you don't have to worry about anything; it is maintained by the service vendor. This saves a lot of money,and you get to focus on business goals rather than having to worry about infrastructure regularly.

  • 3rdParty Integrations:

It doesn't match the kind of customization a single-tenant architecture design offers, but it is not like you cannot make any customizations. Multi-tenant SaaS apps with advanced APIs can easily be integrated to make your software more scalable and boost up your business operations.

  • Fast Scaling:

SaaS applications are subscription-based, but every vendor offers you a different pricing model. Small companies tend to use the standard packages with monthly payment options mostly. Meanwhile, large enterprises are in a position to pay-per-user model prices. Nevertheless, you can choose to upgrade your package anytime as per your need and adjust the expenses.

  1. Drawbacks of Multi-tenant architecture

Multi-tenancy is very efficient, but it comes with some potential risks that can reduce your infrastructural capabilities. Most common ones of which are:

  • Security Risks:

Security being one of the biggest concerns of online business, shared hosting might put you at potential risk. You have to have stricter authentication for accessing control to ensurethe safety of the data.

  • Downtime:

A nationwide outage is not something new when using shared resources. It affects your operations and your customers greatly, and you might want to choose a more reliable service provider to reduce the frequency of these events and faster response for such problems.

Designing a multi-tenant SaaS

There are pros and cons of both single-tenant and multi-tenant approaches but, it all comes down to what your unique business needs are and what kind of budget you have. It is always good to consult an expert SaaS services provider.

The single tenancy offers more customization and security but also requires more resources. It is clearly a more advanced option and is found to be more useful for corporations. Comparatively, multi-latency is cost-effective and requires no maintenance. It is a scalable solution for businesses.

Now that we have covered the pros and cons of single and multi-tenant SaaS architecture, we can move on to the development part, which will give you more perspective about the opportunities, complexities, and challenges found in multi-tenant SaaS.

  1. How to design a multi-tenant SaaS?

For designing an SAP application, it is very important to pay attention to the unique business needs. It helps an SAP development services provider to choose the right approach for SaaS infrastructure. Here are the multi-tenant models you can use for your business.

Other than that, you must consider the number of tenants and their isolation, onboarding, and policy management mechanisms to achieve the goal.

  • Different types of a multi-tenant database
  1. Database-per-tenant:

It offers a new database to each tenant and is scalable vertically, which means you can add resources per node or horizontally by adding more nodes. The database is used in the same resource group and is divisible into the same elastic pools. You can choose to move the tenant database between these pools to optimize resource management.

  1. Single multi-tenant database:

The database has several tenant identifier columns, meanwhile the storage and computes resources can be shared by all the users. It helps you reduce the expense. The only drawback that comes with this model is that the workload of one tenant can impact the service performance for other tenants.

  1. Sharded multi-tenant database:

Using this model, you can store the tenant data across several databases. This is a very scalable solution for growing businesses as it allows you to split the densely populated shards into multiple less populated nodes and also merge them back easily. On top of that, the sharded database can be put into an elastic pool to further enhance operational management and scalability.

  1. Hybrid sharded multi-tenant database:

Moving a tenant or the whole group between the shared databases becomes very easy with this model. If you have several identifiable tenant groups with contrasting resource needs, you might want to use this approach.

Read the blog- Why Choose On-premise SAP ERP?

  • Tenant Isolation

Tenant isolation means the tools that prevent other tenants from accessing the other users' content. For a multi-tenant architecture, tenant isolation is the basic.

As multi-tenancy allows you to share the resources in multi-tenant environments, it is important to ensure security, privacy, and confidentiality. The development approach should be focused on these. Here are a few data isolation strategies you can use for a multi-tenant SaaS environment:

  1. Silo Isolation

The partition type consists of a separate isolated cluster, with each tenant owning storage and infrastructure resources. The partition type is synonymous with single-tenant SaaS architecture.

Silo allows SaaS providers to create stronger boundaries for tenants, and it makes it easy to calculate the usage data for every client. The downsides of this model include higher infrastructure costs, complicated development, and costly management.

  1. Pool Isolation

In pool isolation, the users use the same infrastructure. The architecture pattern has weaker boundaries between tenants and poses more risk for cross-tenant access. It enables the vendors to scale their resources in proportion to the user base and resource usage.

  1. Bridge Model

This model allows the tenants to share the same web server and database and still be separated with tables or microservices for different users. The bridge model is a hybrid of silo and pool partition with shared and isolated infrastructures.

  1. Tier-based isolation

The tier-based isolation works similar to the bridge model; only the types of isolations are based on the subscription plan. The free subscribers would share the infrastructure with other tenants, and the premium subscribers can have dedicated environments with less risk of cross-tenant access.

Tier-based partition is the most scalable of all solutions as it makes the work easy and offers more security to the data. It also prompts users to buy premium plans. The maintenance cost will grow as more tenants switch to isolated environments.

  • Onboarding process

Customer retention is one of the biggest concerns of the business, but you would love to know that according to reports, the churn rate of cloud-based services is 16% to 37% across different industries. Subscription-based SaaS helps you reduce customer attrition by making your services more comprehensive for new tenants. The process is called tenant onboarding with documentation, engaging videos, tutorials, customer service, intuitive interface, etc.

In the era of automation, modern tools allow you to automate these processes to a maximum for convenience. You can go with an experienced development team to build a multi-tenant SaaS application and automate the provisioning mechanism. A good It SaaS Development company would also help you improve the onboarding experience on the software to improve the tenant retention rate.

  • Tenant Usage Analytics

It is very important for you to keep an eye on resource consumption metrics. It is fundamental for SaaS business, and a comprehensible view of your entire infrastructure, and you can learn about the microservices and subscription makes it much more valuable for your users. Here are metrics that can help you in improving your SaaS Development services and understand your user's needs better.

  1. Number of active clients
  2. Active users for every subscription tier
  3. Infrastructure cost per tenant and subscription
  4. Memory storage and utilization indicators
  5. User interaction activity
  6. Profits per tenant and tier

Using the data, you can improve your business services, it would help you boost your business operations, customer experience, and understanding of your client's likes and dislikes. It also allows you to require very few resources.

You will also be optimally able to manage the tenant consumption if they are exceeding any limits. It will be of great use when designing a multi-tenant application with a mechanism that can optimally collect the range of resource consumption metrics.

  • Tenant Configuration

With time the system needs to be improved, optimized, and matched to meet the evolving needs of your customers. It would require you to implement a centralized tenant configuration tool for policy management.

Tenant policies allow you to adjust the user experience in terms of available features, performance, limitations, and SLAs. Furthermore, you can quickly make customization to the different categories to provide excellent service as per the tenant personas.

  1. SLAs in a multi-tenant architecture

Service Level Agreement or SLA is a contract between a SaaS provider and a customer. It brings more transparency to your business operations and clarifies what a customer should expect from your application in terms of features, security, and availability time. In other words, the document includes:

  • SLA Strategies

SLA is not a legal document; it is just service guidance. It allows you to measure how you can meet your tenant's expectations. It makes things much better and allows you to achieve.

  1. Service Tiering:

Users don't might pay for advanced functionality; in fact, businesses constantly look for ways to improve their operations and capabilities. SLAs would allow you to determine product value independently from the market. The better the services are, the more you can ask your tenants.

  1. Framework:

SaaS framework allows you to understand your customer needs to evaluate your business. It allows you to create a dashboard to track the tenant performance over time against SLA's objectives. You can analyze this through metrics and know what tiers and features you can adjust to improve your service offerings.

  1. Business impact:

It is important to know what is the consumption of resources. Thus some might want to exceed the limit, and some might just want to reduce it. Looking at the tenant traffic pattern through SLAs, you can balance the cost and operational efficiency for each tenant, tier, and feature.

  1. Reports:

You can use a reporting tool to help you manage the teams to analyze the data and make more informed decisions. It helps improve the productivity of your employees, and moreover, you get a lot of flexibility to work remotely. You can implement the tool for measuring tenants and application consumption regarding SLAs.

It is necessary to stay abreast with the customer expectations. If you want to expand your service and reduce the churn rate, SLAs contribute amazingly to your multi-tenancy model.

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Wrapping Up

Multi-tenancy is one of the best approaches for SaaS application development. It works great for businesses that are just starting out and need scalable solutions at the right prices.

Coming to development, it takes experience to ensure the safety of the data. It also needs the knowledge to ensure that the product is meeting your business needs. Start from determining the partition model, onboarding process, configuration management tools, and SLA. It would help you plan the development well.