What is Multitenancy? A Five Minute Guide to Enterprise Apps


If you are in the enterprise application space, sooner or later you’ll be asked: what is multitenancy?

It’s a big word, however thankfully it’s a quite straightforward concept.

What is Multitenancy?

A dead simple explanation of multitenancy is that it is:

A software architecture where a single application instance is utilized by multiple customers at the same time.

If you’ve never used enterprise software before this concept may seem like a no brainer. However it is common for businesses to utilize a single tenant approach. As you may guess, single tenancy is where an application has a single customer.


what is multitenancy

The easiest way to understand the difference between multitenancy and single tenancy is by looking at a diagram of both options.

Applications that leverage multitenancy allow multiple customers to access the same application server and database. This is in contrast to applications that utilize single tenancy. Single tenancy applications are structured so each customer gets their own server and database. Most of the time these servers and databases are hosted by the customers, this gives the customer complete control over the system.

Which is Better?

Developers and system architects have varied opinions on multitenancy. However I don’t believe one option is better than another. As with most development concepts, I like to let the circumstance determine the implementation.

Let’s take a look at the enterprise accounting sector as a case study study. One of the largest ERP providers in the world is Netsuite. Netsuite has a great cloud based application that leverages multitenancy. Customers large and small from around the world utilize their system and it works quite well. Every customer on the system connects to the same server and database setup. This type of solution works well for organizations with small IT teams.

However, there are circumstances where selecting single tenancy is preferred. The enterprise software giant SAP has made billions of dollars by selling their software to companies that typically prefer single tenancy. These companies like knowing that they can install the software on their own systems and have 100% control of the software.


I hope that this has been a helpful guide and will help you answer the question: what is multitenancy?


  1. Thank you for the insightful article. It gives a nice overview. I agree with you that the choice which solution fits better shouldn’t be generalized but be chosen according to the circumstances.


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