Single Tenant vs Multiple Tenants in Office 365 – Let’s Choose a Suitable Cloud Architecture

Businesses are constantly looking for efficient and scalable cloud productivity solutions. As it is one of the core requirements for running organizations. Microsoft 365 is quite a popular productivity suite offered by Microsoft. It includes Microsoft Excel, Word, PowerPoint, Outlook, Teams, and other software based on a particular subscription plan. We will compare two Microsoft cloud services single tenant vs multiple tenants in Office 365.

It has emerged as a critical component for organizations looking to improve collaboration, productivity, and communication.  Help organizations reduce cost, time, and complexity. Office 365 comes with various benefits but while businesses migrate to such cloud infrastructure various factors need to be considered. As it comes with several offerings in terms of cloud service. The problem arises of choosing the right infrastructure according to the organization’s requirements, so it’s necessary to know the services before selecting them.

Moreover, it becomes necessary to understand and identify the difference between single-tenant and multiple-tenant in Office 365. Making the right decision is vital to align with your business goals and needs which helps organizations to use the full potential of Office 365.

Both models have pros and cons based on several factors like cost, complexity, scalability, and so on. This article will cover all the points required to consider while choosing a tenant model for business migration along with their advantages and disadvantages. Let’s discuss single tenants vs multiple tenants in Office 365.

Table of Content

1. Single Tenant: Centralized Management
2. Steps to Create Single-Tenant in Office 365
3. Advantages of Single-Tenant
4. Disadvantages of Single-Tenant
5. Multiple Tenants: Separate and Flexible
6. Steps to Create Multiple Tenants in Office 365
7. Benefits of Multiple Tenants
8. Disadvantages of Multiple Tenants
9. Quick Comparison
10. Selecting the Suitable Tenant Model
11. Conclusion
12. FAQs

Single Tenant: Centralized Management

In Office 365, A Single Tenant means a single isolated environment for managing your complete organization. In easy words, We can say everything is under one roof. It represents a centralized system where all data, and users belong within Office 365 environment exclusively to that organization.

It is like a single or private workspace for your company where everyone can access the resources they need with enhanced security. Tenants come with various subscription plans and the cost varies depending on the number of licenses.

Steps to Create Single-Tenant in Office 365

Before discussing the Single Tenant vs Multiple Tenants in Office 365. Let’s have a look at the steps on how to create a single tenant in Office 365.

1. To set up a tenant, create an Office 365 account or sign in using the existing one.
2. Using Admin Center create a new tenant where you can also manage your licenses, settings, and so on.
3. Verify your domain name for your organization, and assign licenses to the users.
4. Configure security policies and other requirements like applications and services.
5. Provide guidance and training to users and administrators for efficient use of Office 365 services.

Advantages of Single-Tenant

1. A centralized management system reduces complexity.
2. It becomes easy to manage users, security policies, and subscriptions using a single admin center.
3. Better collaboration and teamwork as employees can share documents, emails, and so on within the same environment.
4. Better implementation of security and access controls.
5. Maintain complete control over data.
6. Customize and prioritize workloads accordingly and assure maximum efficiency for services.

Single-tenant offers several advantages but has some drawbacks that can be considered when opting for a tenant model.

Disadvantages of Single-Tenant

1. Scalability challenges for large organizations with huge user base.
2. Limited collaboration and resource sharing.
3. Higher in cost compared to another tenant model.
4. Compliance concerns due to limited data residency.

Multiple Tenants: Separate and Flexible

As the name suggests, this approach involves creating multiple tenants for departments and geographical locations within the organization. It has a decentralized architecture that allows separate Office 365 instances which gives flexibility in data management and security controls according to specific needs.

Geographical location plays an important role when retrieving information, and it reduces latency and time when the user is near the location.

Also Read: Microsoft 365 Tenant Restrictions

Steps to Create Multiple Tenants in Office 365

1. Create an Office 365 account or Sign In using your existing credentials.
2. In the Admin Center go to the Manage Tenant and Subscriptions section, and configure accounts and permissions.
3. Implement security settings, and configure applications and services.
4. Train administrators to enhance productivity within the organization.

Benefits of Multiple Tenants

1. Can store data in specific regions. No concerns about data residency.
2. Suitable for large organizations with a high user base.
3. Flexibility in data management for separate instances because of decentralized structure.
4. Improved latency by storing data closer to the user location.
5. Easy segregation of data.
6. Better customization and control over data with easy configurations.
7. Can create separate tenants that require additional permissions or security.

This model also has various advantages and some considerations. Consider when selecting a tenant model.

Disadvantages of Multiple Tenants

1. Management complexity as it requires more effort from the administrator to manage multiple admin centers, user accounts, and security policies for every tenant.
2. No easy collaboration. Requires guest access between tenants for sharing and collaboration.
3. Multiple subscriptions are required for each tenant which increases the cost.
4. Performance degradation due to resource contention by other tenants.
5. Updates and Maintenance tasks are done by Microsoft for the entire environment which means there is limited control over updates.

Quick Comparison between Single Tenant Vs Multiple Tenants

Single Tenant in Office 365	Multiple Tenants in Office 365
Data is segregated and managed within the organization’s environment.	Resources and Data are shared with different tenants.
Easy collaboration.	Bit tricky as it requires additional configurations.
More control and customization over the organization’s data.	Less customization and control.
A single-user profile.	Multiple profiles that the Administrator manages.
Challenges in scalability.	Highly scalable.
Lower Cost.	Higher Cost due to multiple tenants
Limited Data Latency due to predefined regions.	Flexible( Data is stored near the user).

Selecting the suitable tenant model

Identify your organization’s needs. These factors should be considered when choosing a model

Size of the organization- Multiple tenants are suitable for large organizations because they provide more scalability.

Security Requirements- Single tenants can be preferred in case of security regulations.

Easy Collaboration – Single tenant allows easy collaboration.

Resource Management- Easy in single tenants while in multiple tenants more efforts are required by the administrators.

Cost- Multiple tenants are higher in cost than a single tenant.

By keeping these factors in mind you can choose the suitable tenant model for your organization.

Conclusion

This article covers Single-Tenant Vs Multiple-Tenants in Office 365. Consider factors such as Security, Cost, restrictions for data residency, and level of control over your data. Choosing between them depends on your business’s specific requirements. A single-tenant setup provides better security and customization with enhanced performance but they are complex to manage and higher in cost. While, a multi-tenant architecture is cost-efficient, easily manageable, and scalable. These features make it ideal for smaller organizations or those with less specific requirements.

FAQs

1. Can you have multiple tenants in Office 365?

Yes, you can have multiple tenants in Office 365. They offer Microsoft 365 admins the ability to manage all the tenants from a single location. You can easily monitor the health of all tenants, products, and billing, and, the number of users in that tenant.

2. Is a single tenant more secure than a multi-tenant?

In a single tenant, the data of each user is isolated from the data of other users, so they are more secure and efficient. They provide better and enhanced performance than multi-tenant architecture because the resources are not shared with anyone.

3. Why do multi-tenant environments are cost-efficient?

It reduces the need to invest in infrastructure single-handedly. Multi-tenant environments are more cost-effective because multiple businesses are utilizing the same infrastructure and the same set of resources which reduces the overall cost per tenant.

4. Why is a single-tenant Office 365 environment more expensive?

Single-tenant environments cost more because they include dedicated resources and infrastructure used by a single organization. They provide a more secure environment but these dedicated resources lead to higher costs.