Srinath Perera discusses multi-tenancy and why it is crucial for implementing a Platform as a Service (PaaS). He outlines four levels of multi-tenancy maturity and how WSO2's Carbon platform achieves tenant isolation through separate security domains, databases, and execution contexts while maintaining performance and scalability. Implementing multi-tenancy requires balancing tenant isolation with efficient resource sharing and introduces challenges around data security, tenant migration, and scaling to large numbers of tenants.