Multitenancy refers to a standard in software architecture where a single instance of the software runs on a server, serving multiple client organizations (tenants). A software application is designed to virtually partition its data and configuration, and each client association works with a customized virtual application instance. Multitenancy is the fundamental technology that clouds use to share IT resources cost-efficiently and securely.
Tenants share IT resources securely among multiple applications and tenants (businesses, organizations, etc.).
Tenants do not share data among other Tenants.
Data to a Tenant is found using the OrgID.
To prevent malicious or unintentional monopolization of shared, multitenant system resources, Force.com has an extensive set of governors and resource limits associated with Force.com code execution. For example, Force.com closely monitors the execution of a code script and limits how much CPU time it can use, how much memory it can consume, how many queries and DML statements it can execute, how many math calculations it can perform, how many outbound Web services calls it can make, and much more. So, a tenant cannot perform an unlimited number of database operations.
For more info, view the below site
http://www.infoq.com/presentations/SalesForce-Multi-Tenant-Architecture-Craig-Weissman
Benefits/Advantages:
- Several Out of the box features.
- Customization using coding.
- Automatic Upgrades.
- Simplified Release Management.
- Scalable.
- Secured.
- Easy to maintain.
- No dependency for In-House storage.
- Standard APIs can be utilized instead of building custom ones.
Check the following article for more information
https://developer.salesforce.com/wiki/multi_tenant_architecture