I recently presented an overview of multi-tenancy in one of my MBA classes. I discussed how multi-tenant applications allow cloud vendors to achieve economies of scale. As an example, I showed the effect on total cost of ownership for the infrastructure if a cloud vendor moved from physical to virtual and then to a multi-tenant architecture. The multi-tenant architecture cuts cost by 80%.
Imagine that you work at a midsize company that develops and hosts a SaaS (Software as a Service) solution.