Some argue that multitenancy is the conditio sine qua non (a mandatory condition) for “true” cloud computing; certainly, it promises the greatest cost savings. Of course, the cost savings can be offset by the difficulty of scaling an application developed to support a single user to securely support many, as well as the problems of scaling from a single instance to many instances (a bigger, faster server can only take you so far) as the demand grows. In addition, the actual development of a multitenancy system is somewhat more complex, and the testing necessary for security needs to be more stringent.
On the other hand, multitenancy simplifies the release management process. In a traditional release management process, packages containing code and database changes have to be distributed to individual client desktop and/or server machines and individually installed. With browser accessed applications using the multitenant model, the package typically only needs to be installed on a single server and is automatically propagated to other server instances. This greatly simplifies the release management process. (In essence, this is the great-grandchild of service bureaus that handle applications such as payroll on behalf of many different customers).
Source of Information : Implementing and Developing Cloud Computing Applications 2011
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