Other's had these problems before. E.g. there's sth. out there called the SaaS Maturity Model. I think that most successful models started out with the functionality first, and the platform as secondary concern. So I would go with an instance per customer strategy first. Anyway how many customers will there be at the beginning? Is it more likely to fail because the customer don't like the functionality or because you are using multiple instances coming of course with a ops overhead?
=> Focus on the product/functionality first. So aim for level 1, focus on other levels later.
With Docker (at least from my perspective as one guy, that has not done a lot with it): The artifact of your development is a runnable container image. When this artifact is published to a repository it should be very easy to update all instances to use this new artifact. So with a little scripting and perhaps sth. like Kubernetes it should be doable to move even a lot of instances to a new version. So I think new developments like Docker do make multi instance setups even more feasible.
I'm doing also a SaaS product for our company. For us it is also multi instance due to business concerns:
- Our customers are very keen of keeping data separate from competitors. That is much easier to show with a multi instance strategy.
- Customers want some control of the release cycle sometimes. For example they have to communicate changes in functionality to employees or a business process is in progress that does not allow an upgrade. So they might want to wait with a new version or even skip it. Again much easier with an instance per customer.
As always with these kinds of questions, I'm giving my opinion and my experience here. It really depends on your use case - SaaS has a lot of variety.