Would it be better to use subdomains or folders when each client needs a section of the site?

In our experience here (which is mostly UK-only) users will type in a sub-domain, however they will leave off anything after the domain (like folders). The forward-slash is cumbersome in use as general site visitors get confused with back slashes and just visit the main site to try and find what they want - completely ignoring the rest of the URL.

Having said that though - we also have a glut of users who, despite instruction to the contrary, will always type in www. before any domain that is given.

Our simple advice would be to use sub-domains but also create www. sub-domains hanging off each entry.

Just using folders gives off the false impression that there is little isolation between customers. Also sub-domains will allow you to vary by IP address so that if certain customers demand more resources they can be given isolated servers, etc.

Do both...

Sub domains are great in that they are easier to type and easier to remember but the extra level of complexity and maintenance required to use them may be more work than you're willing to do.

Instead of setting up 'proper' subdomains just use URLRewrite to fake it.

See this answer on stackoverflow.com to see what I mean.

As an example, look at Google analytics. If you type in analytics.google.com it pushes you to http://www.google.com/analytics/.

The only time I would suggest using subdomains would be if:

• you're running separate servers under the same domain name (Ex. mail.yourwebsite.com, ftp.yourwebsite.com, etc).
• your site is a network portal for a bunch of other websites (Ex. blogger where each users blog resides in a sub-domain of blogger).

What @MetalShark said. I would go with subdomains 100%.

Subdomains is a more scalable solutions because you can load balance and segregate customers more easily.

Also, I think many non-tech savvy people don't understand that www.theircompanyname.yourcompanyname.com is actually hosted by you and not them. That means they are more willing to trust a subdomain that looks like their sites URL with yours tacked on to the end. It also disassociates your site which is about selling your product from their subdomain which is about them using your product.

I think beyond scalability using subdomains will make your customers feel more comfortable with using your software and that is a huge plus.