What does multi-tenancy mean in cloud computing?

Multi-tenancy in cloud computing refers to a model where multiple users or tenants share the same computing resources, such as storage, processing power, and applications. This approach allows service providers to optimize resource utilization, reduce costs, and efficiently manage their infrastructure. Each tenant operates in a shared environment while maintaining data isolation and privacy, contributing to economies of scale.

In a multi-tenant architecture, all tenants can use the same application but operate on separate data and configurations. This setup can lead to improved collaboration and cost efficiencies, as users benefit from shared resources rather than requiring dedicated infrastructure. The ability to scale resources as needed is also enhanced in this model, as the underlying infrastructure is more flexible and adaptable.

This shared resource model contrasts with other approaches like single-tenancy, where each customer has exclusive access to dedicated resources. This can lead to higher costs and inefficiencies when resources are underused. Therefore, multi-tenancy offers significant advantages in terms of cost-effectiveness and resource optimization for cloud services.