Alok Misra from InformationWeek explains why multi-tenancy is the way to go for cloud based applications:

http://www.informationweek.com/cloud-computing/blog/archives/2010/02/why_multitenanc.html?catid=cloud-computing

With a multi-tenancy application, infrastructure and resources are shared across the customer base which lowers the overall cost for each client. Because it is so much easier to upgrade a multi-tenant system, this also reduces costs.