This is something of an old chestnut, and I understand that Moodle HQ themselves put considerable work in to this before giving up, but there are no community efforts in this area (although some Moodle partners have either suites of plugins or forks of moodle to provide this kind of service). As someone who was a Moodle partner from way back in 2004, I have encountered the request to have some or other aspects of multi-tenancy from customers or potential customers, many times.
What I propose is to have a discussion on what exactly is needed in this area. And maybe come up with some diagrams/plans/lists of requirements (Thanks Stuart).
Some of the things I have been asked for were:
The ability to have sub-administrators, who only have access to, and control over, a sub-set of the moodle site's userbase and course structure, with the ability to assign roles to users in that sub-set, who also are restricted to that course area (one or more categories, for example) and userbase (for example, the ability to assign manager and course creator roles, but only within a sub-set of users). The sub-admins and any roles created by them, should not be able to even SEE the users and courses outside of their defined area. This area would be in effect a moodle sub-site for a department of the organisation, or a company within a group of companies, a school within a school district, or a hospital within a health service...that kind of thing. Also, the usage might not just be one sub-admin or sub-manager (or whatever roles) to one sub-site. You might have multiple levels where a sub-role has jurisdiction over multiple sub-sites, then further sub-roles for each sub-site.
This leads to other considerations. For example, the organisation inevitably wants to have separate login pages, suitably themed, for the different sub-sites. Perhaps these could be accessed in a similar way to the url-based theme choice that Moodle currently has as an option.
Reporting (including looking at logs and statistics) would probably need to have the ability to be filtered, based on the sub-site(s) that the admin or teacher requesting the report belongs to.
It may even be that some organisations would want different activity modules and blocks available for the different sub-sites.
Authentication and enrolment via external sources would need to be considered.
SSO to external sites like Mahara would also need to be considered. In the case of Mahara, for example, would each sub-site in Moodle represent an Institution in Mahara?
No doubt there are many other possible use cases, and I would invite everyone that is interested, to have a think and add to this thread with possible additional requirements.
I would assume that any such community effort would try and make this kind of thing possible with plugins, rather than looking at core code changes.