What describes the scenario where multiple customers share the same physical infrastructure while keeping their data and applications completely separate?

The scenario where multiple customers share the same physical infrastructure while ensuring that their data and applications remain completely separate is best described by multitenancy. In a multitenant architecture, a single instance of a software application serves multiple customers, known as tenants. Each tenant's data is isolated and remains confidential, despite the sharing of computing resources such as servers and storage.

This model is especially prevalent in cloud computing environments, where it maximizes resource efficiency and reduces costs for both service providers and customers. By using a multitenant approach, service providers can deliver updates and new features more quickly, as there is only one application version to manage for multiple clients. This significantly simplifies maintenance and scalability.

In contrast, multi-instance refers to scenarios where each customer has their own separate instance of the application running, which can lead to increased resource usage and complexity in management. Shared services indicate the use of common resources for various initiatives or functions but do not imply the strict separation of customer data. Lastly, virtualization involves creating virtual versions of resources, such as servers, but does not inherently ensure data separation between customers in the way that a multitenant system does.