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Multi-tenancy in data center networks refers to the design where multiple customers, also known as tenants, share the same physical resources while maintaining a level of isolation from one another. The key feature of this approach is the use of shared physical networking equipment, which allows for effective resource utilization and cost efficiency without compromising security or performance for the individual tenants.

The isolation aspect is crucial because it ensures that the data and applications of one tenant are kept separate and protected from those of others. This means that while physical resources such as servers and network infrastructure are shared among multiple tenants, their virtual environments are isolated. This isolation is implemented through various technologies like VLANs (Virtual Local Area Networks), virtual firewalls, or hypervisors, which enforce boundaries and enable secure coexistence within the same infrastructure.

The other options do not accurately capture this essential aspect of multi-tenancy. For instance, all tenants having access to each other's data contradicts the principle of isolation. Monitored and secured single-tenant services do not represent multi-tenancy but rather dedicated environments for individual customers. Increased latency due to data sharing would not typically be a feature associated with well-designed multi-tenant systems, as efficient data routing and handling aim to minimize latency. Thus, the shared physical networking