Performance difference between single large Application instance vs multiple small Application Instance in Netweaver
Let's consider a situation when you need to build a server with SQL Server used by multiple client applications. Here are two options to consider.


Single instance that host ALL the databases  
Multiple instances with each having subset of the databases.


We`ve created a table with comparison of these two options.

Comparison of single instance to multiple instances SQL Server installation

Single instance is Better for 


Memory usage
TempDB disk usage
CPU usage
IO
Ease of administration
Overall performance
Cost of licensing
Monitoring


Multiple instances is Better for


Separate Security between 
databases and applications
SLA differences
Multiple test and dev environments


Conclusion
From the table above we can see that having multiple instances of SQL Server on a single server could be beneficial only in a specific cases when you need a great degree of isolation for the environment, otherwise consider using single instance installation.