09/02/2022

What is multi-tenant architecture?

By Mariana Almeida Marques

Multi-tenancy makes it a lot more practical for companies and individuals to access software without having to build it from scratch or maintain it. It is a great benefit of cloud-computing, particularly useful for large enterprises that either serve different clients bases or have multiple lines of business to manage. In this article, we explain the meaning of multi-tenant architecture, its usages and benefits for companies.

What is multi-tenant architecture?

Multi-tenant architecture enables multiple partners to access the same computing resources. This means that a single server and applications can be shared by various tenants. The term “tenant” is broadly used to categorise clients, business areas, teams or business partners that has access to the architecture in question. Even though these tenants share the same software resources, their data is kept private, so they aren’t able to access other tenants’ information.

A practical example of multi-tenancy can be found in the banking industry. Each bank has a number of customers with their own accounts. Even though their details are stored in the same database, customers are only able to access their own accounts. They can’t interact with each other or even see who else has an account with their bank.

The same happens in multi-tenancy, where separate entities have access to the same software resources, but they operate independently and are isolated from each other. Multi-tenancy architecture is a component of cloud-based software. You can have a look at our previous article if you are interested in learning more about cloud computing and its benefits for enterprises. When operating a multi-tenancy architecture and dealing with various partners and providers, a vendor management tool may be beneficial.

multi-tenant architecture

Single-tenant vs multi-tenant architecture

Single-tenancy means that a server can only be used by one entity. The whole architecture is controlled by a single tenant, giving them more freedom to manage and change its environment. Consider a small company that only has one line of business and operates exclusively in the UK. They may not need a multi-tenant architecture in order to optimise operations.

However, large enterprises have multiple lines of business in different sectors and different countries. Each line of business is unique and has different requirements. This calls for a multi-tenancy architecture where companies can better manage all their affiliates whilst providing them with the software resources they need.

Advantages of multi-tenant architecture

Multi-tenant cloud-based architecture can be less expensive because companies only use and pay for the technology that they need, when they need it. Alongside that, assuming that you partner with a SaaS provider and use third-party technology (and not your own), you don’t have to maintain or update the actual hardware. This reduces your costs and frees up your human resources.

Perhaps more obvious is the fact that multi-tenant architecture enables large enterprises to use the same technology for various business areas or partners. This means that companies don’t have to use one machine for each tenant and potentially waste resources. By sharing the same architecture with all tenants or business areas, companies are making better use of its resources.

Aside from the cost-effectiveness factor, multi-tenancies allow enterprises to provide a uniform yet personalised experience to its affiliates or partners. With Imburse, the onboarding and management of multi-tenancies is a seamless process. Enterprises also gain access to invaluable payment expertise, and the flexibility to accommodate the individual needs of all partners and affiliates, all whilst optimising their operations.

In some cases, there may also be some disadvantages to using multi-tenancy architecture. For instance, if one tenant is using a lot of computing power, that may slow down other tenants. This shouldn’t happen if the software was properly set up. For regulatory compliance purposes, some companies may not be able to store data and work within a shared environment. However, cloud-based software is rigorously protected and completely safe, so security shouldn’t be a concern.

multi-tenant architecture

Multi-tenancy usages and examples

Large companies that operate in different parts of the world and have multiple lines of businesses (departments or teams focused on a particular business area) need a multi-tenancy architecture to work on. This includes banks, insurers and software providers, amongst others. Think of companies such as Salesforce and HubSpot, for instance. These companies have a single database that is shared amongst all users. However, users don’t know about each other and can’t access each other’s information. They are also able to customise parts of their data, such as visual themes, but they can’t change the core infrastructure.

By connecting to Imburse, you can fully support all your lines of business without having to worry about system integrations or reporting structures. This enables you to streamline operations and to ensure that each business area has the tools that it needs to deliver a great payment experience to its customers. You also get a white-label component that enables each line of business to customise its own platform and adapt to specific customer needs. For instance, a line of business operating in the US benefits from integrating to Venmo, and a line of business operating in the UK benefits from connecting to BACS. It’s crucial that these specific needs are covered in order to exceed customer expectations.

How Imburse can help

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.

In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

 

Author

Mariana Marques

Mariana is a content writer at Imburse, specialising in Finance and Technology topics.

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