Term
Multi-tenancy
An architecture in which one instance of software, usually SaaS, serves many customers at once with their data logically separated. It cuts the provider's costs, but reliable data isolation between clients is essential.
Updated
What it means
Multi-tenancy is an architecture in which one instance of software, usually SaaS, serves many customers, called tenants, at the same time. They all use the same application and often the same database, but their data are logically separated so that each sees only its own.
The model cuts the provider's costs because there is no need to run a separate server for each client. Updates are deployed once for everyone, so all customers are on the same version. Most online accounting programs and cloud services work this way.
The opposite is single-tenancy, where each customer has its own instance of the application and database. It offers greater isolation and customisation but costs more. Some providers combine both approaches and offer larger clients a dedicated environment for an extra fee.
How it works in practice
When choosing a SaaS service for accounting or payroll, ask how the provider separates client data, where it is stored and who has access. Certifications such as ISO 27001 or a SOC 2 report show that the provider has implemented and tested security controls.
When processing personal data the provider acts as a processor, so a data processing agreement is required. It should cover data location, sub-processors, incident notification and the return or deletion of data when the contract ends.
Because everyone shares the same infrastructure, an outage or update affects all customers at once. It helps to know about planned maintenance and the availability guaranteed in the contract, and to keep your own export of important data, for example before a tax filing deadline.
What to watch out for
The main risk is a flaw in data separation that lets one customer see another's data. Such an incident is a personal data breach under GDPR and affects all of the provider's clients. It is therefore important to find out how the provider tests isolation.
Customisation is limited because everyone uses the same application. A company with very specific processes may find that the provider will not make the change it needs. Before switching, check whether the service covers the necessary processes without workarounds.
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