Here’s the bottom line: Multi-tenant architecture can lead to dramatic cost reduction and complexity in storing user data and serving applications in cloud-native environments. SaaS businesses can launch scalable products with low engineering overhead.

In the competitive world of Software as a Service (SaaS), businesses need to find ways to optimize their services, reduce costs, and scale effectively. One powerful approach is using a Multi-Tenant Architecture (MTA). Today, we’re diving into the basics of multi-tenant architecture, its benefits, and how SaaS founders and product managers can utilize it for positive business outcomes.

What is MTA? 

Multi-Tenant Architecture is a design that allows multiple customers to use a single version of an application while keeping their data and settings separate and private. This is done by logically dividing the customers' data and settings, even though they all use the same infrastructure. Adopting MTA can bring numerous advantages to SaaS businesses, such as lower operational costs, better resource use, and improved scalability. By understanding and implementing this architecture, SaaS founders and product managers can unlock their applications' full potential and lay the groundwork for growth and success.

What is the Alternative?

On the other hand, single-tenant architecture is a pattern in which each user or customer account has its own isolated deployment of the application and the data. With the single-tenant approach, there is less cost leverage per customer because each customer is bearing the full cost of deploying that application. In a multi-tenant environment, the cost for shared resources is shared among all tenants.

Multi-Tenant Database Patterns

One strategy is to offload the maintenance and scalability to the cloud provider by leveraging database technologies such as Firebase, DynamoDB, Aurora, and others. Depending on your level of scale, these databases can handle a tremendous load when set up properly. For most startups launching their MVP or iterating towards product-market fit, these database technologies can reduce the need to have a dedicated infrastructure engineer for your data needs.

For the “multi-tenant” element of the strategy, the goal is to deploy shared database resources that all tenants will use. The way the data is delineated is through mechanisms such as a tenant ID, a unique identifier for each tenant. Setting a tenant-wide ID on all data types will allow you to do the things necessary to manage the lifecycle of that customer. For example, if a customer wants a dump of their data, your database tooling can query for every data item with that tenant id to get the data easily, despite being in shared resources. The same concept can be applied to user IDs.

Multi-Tenant SaaS Operations

Operating a SaaS business means you need a way to give each tenant a way to access their data and ONLY their data. Sometimes applications use a subdomain per tenant. Even if you use this as a vanity URL for access for the tenant, I still recommend baking in a way to get the tenant ID of any user, if you only have their user ID. That will enable your system to do things such as check if a user has access to a tenant's data, without allowing any data bleed between tenants.

Operators of the application such as admins, developers, product, and customer success need the ability to switch between users and tenants to diagnose problems. Sometimes this can be done with a hidden drop-down or panel that is only shown if you have the correct role. As a secondary guard, ALL of your APIs should have an authorization function in front of them that checks the requesting user ID to see if they have the authorization to access the tenant’s data. Never return data to the front end without checking the user’s authentication and authorization for that particular tenant that is being requested.

What Should You Watch Out For?

Bleeding data between tenants and exposing private data accidentally is one of the biggest pitfalls of multi-tenant architecture and why a lot of teams shy away from it. I believe this fear comes from the fear of the unknown. Once you grasp the core concepts, the pitfalls, and how to avoid them, you can build guards into your product development to ensure tenant data is never leaked between tenants.

I highly recommend creating an automated testing strategy around your multi-tenant data access patterns to ensure you never release a code change that could ruin the trust of your entire user base.

How Can We Know if Our MTA is Successful?

You should receive a dramatic cost reduction in both your data storage needs and the cost of your engineering team to manage those resources. That should allow for more runway to fix application bugs and introduce customer-unlocking features to get to the next stage of growth faster than your competition. Customers should feel confident that their data is secure and they have never witnessed seeing another customer’s data in their instance.

Finally, if you were to receive some huge PR event such as a mention from a prominent influencer, or a PR campaign, your technology would already be set up to handle it and could be stress tested to confirm beforehand.

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