Multitenancy is core principle or characteristics of cloud computing. And it refers to an allocation of cloud resources to multiple tenants (customers/projects) in a given cloud platform. Moreover, it also ensures that data of one tenant is inaccessible by another tenant who share the same resources (compute, storage, network, etc.).
As opposed to the traditional computing paradigm, multitenancy features of cloud computing enables multiple customers (tenants) to share the same physical hardware without intermingling their respective data. Furthermore, cloud platforms employ encryption techniques to safeguard the data of their customers and enforce logical separation.