Software as a Service (SaaS) cloud-based applications are growing fast worldwide, with companies like Salesforce, Slack, Dropbox, and Google leading the market. Now, what do these companies have in common? It’s easy — they use a multi-tenant architecture for their applications. And today, we’ll discuss why you should build a multi-tenant SaaS application.
Acropolium is a software development and cloud computing consultancy company with decades of successful project experience. In this article, we’ll share some of our knowledge about multi-tenancy for SaaS applications.
We’ll give you the reasons for implementing a multi-tenant architecture and go through the process step-by-step. Additionally, you’ll learn how to overcome common challenges to create a truly scalable SaaS app. So, let’s dive in!
What is multi-tenant data architecture?
Multi-tenant architecture in SaaS applications is a cloud infrastructure where software instances and supporting infrastructure serve multiple customers (tenants). Users share databases and compute resources, but their data is isolated from one another.
Most subscription-based cloud SaaS solutions are built on a multi-tenant architecture. Some examples of these services include:
- Corporate and single-user email apps (Yahoo, Gmail, Outlook)
- Cloud storage services (Google Drive, OneDrive, Dropbox)
- Website platforms (Shopify, Wix)
- Communication apps (Slack, Skype, Trello)
Now, let’s compare multi-tenancy to single-tenant architecture.
Single-tenancy in SaaS refers to a cloud environment where every customer has a separate software instance, database, and a set of computing resources. The tenant’s data is fully isolated and inaccessible to other users, but customers have to manually maintain and upgrade their environment.
Single-tenant architecture is mainly used in private cloud environments. However, platforms like Amazon Web Services (AWS) and Oracle Cloud offer dedicated infrastructure for single-tenant SaaS apps as a premium option.
In other words, a single-tenant SaaS architecture resembles a private house in the suburbs. It’s secure and self-sufficient, but the price of the infrastructure and maintenance quickly goes through the roof.
Multi-tenancy, on the other hand, is like an apartment in a residential building. The security depends on the vendor’s isolation strategy, but the infrastructure is cheaper, scalable, and easier to manage.
Key benefits of multi-tenant architecture
Why should you favor a multi-tenancy for your app? Let’s look at the main business advantages of this architecture to explain:
Efficient use of computing resources
The multi-tenant architecture ensures that every customer gets enough storage and compute power to handle their workloads.
Take the single-tenancy model. It means that every tenant uses separate nodes and databases, meaning underutilized resources or degraded performance. In contrast, multi-tenancy allows sharing of storage, CPUs, and memory between thousands of customers.
In addition, you can use load balancers, sharding, and tier-based isolation strategies to allocate available resources, ensuring optimal performance for every client.
Easy maintenance and upgrade management
Companies can update software for multiple customers at once in multi-tenant environments. Instead of managing every tenant separately, you can roll out new features and updates to the central application or codebase, applying the changes to all users.
Convenient setup and migration
Developing a multi-tenant SaaS app requires less time and capital expenditure compared to building an isolated single-tenant infrastructure. For instance, on-demand cloud computing platforms (AWS and Oracle) make building and hosting applications much cheaper, thanks to their scalable infrastructures.
Additionally, it’s easier to transfer apps between infrastructures if they were designed on a multi-tenant SaaS architecture. Companies like Amazon provide tools to help companies migrate their existing apps to the new environment.
Customization and third-party integration support
Companies can make their SaaS app highly customizable through the support of APIs (application programming interfaces). As a result, all your customers will enjoy third-party app integration without waiting for you to deploy on their infrastructure, as in the case of a single-tenant architecture.
Fast scaling of resources
Implementing a multi-tenant SaaS framework gives you an opportunity to build multiple scaling strategies without infrastructure implications because tenants share software instances and databases. Your app can instantly redistribute resources as users change their subscription model, add services, or adjust their storage size.
As we mentioned, a multi-tenant SaaS platform requires fewer upfront expenses and maintenance costs. You can also make the most of available resources and quickly scale them for customer tiers or individual clients. Consequently, you’ll spend less money on your cloud infrastructure.
These benefits make multi-tenancy the optimal choice for startups, small and medium businesses, and enterprises with tiered userbases. Plus, this model works for any business that wants a manageable and scalable application.
Challenges of the multi-tenancy database design
Multi-tenant architecture isn’t perfect, so you’re bound to face limitations during development. Here’s what you should consider as you’re planning to create a multi-tenant SaaS application.
Read also: Single-tenant and multi-tenant SaaS architecture.
Users can share servers and databases in multi-tenant environments. In theory, this makes the data inside the app less secure. In reality, your tenant’s privacy depends on your authentication mechanisms and SaaS tenant isolation strategies.
So, how can you separate tenant data in your environment? Popular types of isolation include:
- Virtualization model. Virtualization means dividing tenants into clusters with isolated infrastructure sources. Silo-based isolation has the highest maintenance costs and is more typical of single-tenant SaaS apps.
- Pool model. Users share the infrastructure and resources based on the database load and resource consumption.
- Bridge model. A combination of virtualization and pool models. For instance, tenants can share a database or a server but use isolated microservices.
- Tiered model. Isolation is based on the customer’s subscription tier. For instance, free plans offer a single shared infrastructure, but upgrading to a premium tier gives access to isolated environments and additional resources.
Remember that your isolation strategy can affect the scalability of your environment. But we’ll talk about that later, so stay tuned.
Your tenants could be large enterprises with hundreds of employees, each having a separate user profile in the same account. So, you should be prepared to invest in a service capable of processing thousands of backend processes for authorization.
Users in shared cloud environments can monopolize CPU, memory, and storage, leaving other customers with fewer resources. This creates the so-called resource strain or “noisy neighbor” effect.
Companies can prevent this situation by building a SaaS application with scalable architecture and load balancing mechanisms. Additionally, you’ll need reliable performance monitoring and analytics tools.
Gathering performance metrics in multi-tenancy is more complex than in isolated infrastructures. Why? Because a single tenant’s data can be located in several databases.
There’s a way out. You can build a multi-tenant SaaS app using different architecture patterns that capture and analyze resource consumption from multiple sources.
Some of the essential metrics for multi-tenant environments include:
- Memory and storage usage
- Active tenants and user groups per subscription tier
- Periods of increased activity
- Expenses (per tenant and subscription tier)
- Revenue (per tenant and subscription tier)
With the right metrics, you’ll know when and what resources to allocate to improve performance, identify bottlenecks, and fix issues affecting user experience.
You can overcome these challenges with a proven approach to building a multi-tenant SaaS platform. And that’s going to be our next topic.
How to build a multi-tenant SaaS application
Developing a scalable, high-performing, and secure multi-tenant SaaS app requires the right methodology and toolset. To help you out, we broke the process down into the steps below.
1. Plan the SaaS infrastructure
You should develop your infrastructure based on estimated workload, resource usage, security (isolation), and, most importantly, customers’ needs.
How do you estimate these metrics? Try answering the following questions:
- How many tenants and tenant groups (tiers) should your application support?
- How much storage and workload does every tenant (and tier) need?
- Should you isolate databases and resources for premium clients?
- Should you shard data based on user locations?
- How often do you need to apply software updates?
- Do you want to implement advanced data backup and restoration solutions?
- What performance and business metrics are the most important?
- How do you want to react to spikes in tenant activity?
- How much optimization and customizability should you offer for different tenant categories?
- What data privacy and compliance regulations should your app meet?
This is not an exhaustive list of questions, but it’s a good start. Answering these should help you with a sense of scope for your SaaS application.
2. Develop tenant management policies
SaaS applications serve customers with vastly different needs. Smaller clients may opt for shared databases and fewer resources; others will gladly pay for isolated databases and extra computing power. It’s up to you to cluster their requirements and develop personas for every type of tenant.
We recommend using a centralized tenant policies management model. This approach will help you optimize performance, add features, and roll out software updates to different user groups.
Looking ahead, you’ll need a tool to effectively organize customers inside your SaaS. So, you might want to look at database management solutions early on. DynamoDB comes to mind as a flexible and easy-to-use option for most multi-tenant applications on AWS.
3. Choose a cloud computing platform
Cloud computing platforms provide infrastructure and toolsets for creating a multi-tenant architecture-based app. Let’s look at some of the options from AWS:
- Microservices (Amazon ECS). Microservices architecture consists of loosely coupled (inter-dependable) components. This reasonably priced option allows teams to code, scale, and deploy code independently but has limited customization. You also won’t be able to migrate the ECS setup to other SaaS infrastructures without a fundamental rework.
- Elastic Kubernetes Services (Amazon EKS). EKS allows isolating tenants in separate clusters (Kubernetes) for additional security. This option also offers advanced customizability compared to ECS, albeit at a higher infrastructure price.
- Amazon Serverless Computing. Fully scalable architecture with efficient resource allocation. Serverless is the most complex option, but it allows for nearly unlimited customization and third-party integrations.
Next up, let’s see how your SaaS can handle authorization requests.
Read also: How to reduce cloud costs.
4. Implement authorization mechanisms
As we said, authorization and authentication are resource-heavy processes. Imagine this: your system has to verify credentials, check affiliation, rights, and domain rules. Then, it can either deny access or issue an access token to the backend app to enter the database. Now, picture this process taking place a couple of thousand times a minute.
Organizations can save resources with a third-party service with dedicated servers to handle the authorization control. Most solutions are either overpriced or lack features, which is why Acropolium made AcroSSO for our clients. This backend authorization management tool can help you easily manage user rights in your multi-tenant SaaS environment.
5. Set up domain routing
You need to set up a sign-in URL for your SaaS application based on your security requirements. You can go with:
- Logical URLs that separate tenants by their names (for example, saas.acropolium.com/companyname)
- Cryptic URLs that separate addresses with unique identifier numbers (saas.acropolium.com/company=12345689)
- In-app redirects that send users to login pages for authentication
Now, let’s see how you can make your app even more appealing to a wider range of users.
Best practices for multi-tenant SaaS application development
We talked about the significance of research and planning before. Now, let’s look at some practical features that might help SaaS platforms across industries.
Allow customization and third-party applications
Users want to personalize their experience with their usual business tools. For instance, your clients might want to integrate enterprise management platforms, additional security tools, customer portals, and payment gateways. Therefore, you must design your app to allow third-party integrations through APIs.
Your app should adhere to security standards, local laws, and industry-specific regulations. For example, FinTech software needs to follow PCI DSS and GDPR to operate in the EU but must comply with UK-GDPR if you want to serve users in the UK. Making compliant and secure software requires industry-specific expertise and legal knowledge. That’s why you should consider consulting with a reliable company at the early stages of development.
Localize the tenant experience
Localization is critical for apps targeting a global audience. Your app’s user interface might benefit from the support of multiple languages, time zones, and metrics (for example, temperatures). And don’t forget to convert to the local currency.
Set up customer support
Support is a necessary but often overlooked part of a SaaS application. Don’t be like everyone else — plan your customer support early on.
Consider creating a reliable customer portal with self-service features, a knowledge base, and a support tickets management system. Thankfully, there are plenty of third-party solutions to help you build and automate support processes.
Service Level Agreements (SLAs) in multi-tenancy
An SLA is a legal document that shows how much your tenants can expect from your SaaS application. This includes features, uptime, cybersecurity, isolation mechanisms, software updates, as well as your liability for failing to provide these services.
How do you optimize your SLA for your application?
- Based on subscription tiers. Ideally, you should provide separate agreements for every subscription plan, extra feature, and isolated microservice.
- Based on business metrics. Tenants never use resources equally. With the right analytics mechanisms, you can identify usage patterns to balance CPU and memory usage for specific user groups inside the subscription tiers.
But to effectively adjust resources between individual tenants and customer groups, you need to design your SaaS to be scalable.
Building a multi-tenant SaaS application with a scalable design
Database isolation is the foundation of scalable design. You can separate your customers in a multi-tenant architecture using the following strategies:
- Shared. Users share a database and have their information separated by identifier columns. It’s easier to add resources to the database to optimize the workload, but some tenants can monopolize resources, creating the previously mentioned “noisy neighbor” effect.
- Dedicated. Every tenant has a separate database, and you can move these databases between resource groups to optimize performance.
- Sharded. A single tenant’s data is spread across multiple databases in movable shards. The scaling happens as you move these shards to a more performant infrastructure.
Smaller companies can benefit from shared databases at the initial stages. But as your user base grows, you may want to adopt a hybrid approach and scale resources between user groups.
The multi-tenancy model is the optimal choice for subscription-based SaaS applications. Compared to single-tenancy, multi-tenant architecture is cheaper to maintain and faster to scale. Hopefully, our strategies and tips can help you build a multi-tenant SaaS app even faster.
But if you need more than theory — Acropolium will gladly lend a hand. Our vetted consultants, developers, and designers can build a secure and scalable multi-tenant infrastructure for your SaaS application. Plus, we help you improve performance, simplify maintenance, and reduce the expenses of your cloud environment. Just click here if you want to talk business.