What does multi-tenancy in cloud computing refer to?

Multi-tenancy in cloud computing is a fundamental architecture design that allows multiple users, or tenants, to share the same application resources and infrastructure. This approach maximizes resource utilization by enabling various customers to run their applications on shared hardware, software, and data storage, leading to enhanced efficiency and cost-effectiveness.

In a multi-tenant environment, a single instance of an application serves multiple clients, allowing them to maintain their own individual data and configurations while using the same platform. This model contrasts with dedicated resources, where each user would have separate instances allocated solely for their use, leading to higher costs and less efficient resource utilization.

This concept also highlights the importance of data isolation and security within the shared environment, as the cloud provider must ensure that the data and operations of one tenant do not impact those of another. The design supports scalability and flexibility, as resources can be dynamically allocated based on demand.

Understanding multi-tenancy is crucial for recognizing how cloud providers manage resources efficiently while serving a large number of customers concurrently.