SharePoint 2010 - Multiple sites vs Fine-grained permissions for document library

Question

For 800 customers with each one having 5 document libraries, Is it better to create a one site with 800 x 5 document library or 800 sites with each one having 5 document libraries.

Please respond considering following points

1. Manageability : How to roll out upgrades for 800 sites.

2. Performance.

3. Any limits for Fine - grained permissions.

4. Security.

etc

thank you

Answer 1

Large numbers of item-level permissions in a list can cause serious performance problems as its not only the permission being set but also limited access being granted to navigate to the item.

If you place them in same site, there is a workaround for the performance issues that involves moving creating and moving folders inside a document library. More here.

Another approach would be as you mention to create a site for each customer. You can have 250.000 sites per site collection and still be in supported territory.

You could handle upgrades using site (site collection) scoped features.