Sure there are trade offs. If a significant part of the value of the app rely on data sharing or transactions between customers this is clearly unfeasible. But

Sure there are trade offs. If a significant part of the value of the app rely on data sharing or transactions between customers this is clearly unfeasible. But if the app mostly deals with a significant amount of private data of the customers that occasionally needs to be shared, I think using separate databases (not servers) is the safest option.