Multi-tenancy is a prevalent but often misunderstood architectural model in modern software, where a single application serves multiple discrete groups of users, known as tenants, by sharing infrastructure while maintaining logical separation of data and configurations. This model can significantly impact costs, security, performance, and compliance, with varying degrees of resource sharing and isolation. The text explains different tenancy models, including single-tenant, multi-tenant, and hybrid models, each offering unique trade-offs in terms of cost, performance, and compliance. Multi-tenancy's cost efficiency allows providers to serve more customers at lower costs, while security measures such as strong authorization and data isolation are crucial to prevent cross-tenant data leakage. Performance can be affected by the "noisy neighbor" effect, but modern architectures often employ load-balancing techniques to mitigate this. Compliance requirements, particularly in regulated industries, may dictate tenancy choices, with some regulations necessitating physical data separation. The guide also discusses database design approaches in multi-tenant systems, ranging from shared databases with shared schemas to completely separate databases for each tenant, each with its own trade-offs. Choosing the right tenancy model involves evaluating factors like regulatory compliance, performance expectations, operational overhead, and growth potential. Organizations are encouraged to select a model that aligns with their current needs while remaining adaptable to future changes, avoiding vendor lock-in and preparing for potential migration between models as business requirements evolve.