I am trying to plan out an ideal environment to support 5-10 clients in Sharepoint 2010. I have decided to create a farm for each client but I am not sure how to deploy the SQL server architecture. I have been reading about the pros and cons of instancing and would like to know how some of you have attacked this issue (instanced or not). Currently I support a single client in a non clustered SQL infrastructure with a single server managing all databases. I know this is not ideal to support 5-10 clients and am concerned I might get questioned about separation of databases per farm and if this is even feasible. On top of that most clients want a 3 farm setup (test, stage, production).
What are the SQL database best practices when it comes to supporting multiple clients (multitenancy) in a traditional hosting scenario?