A multi-tenant software as a service (SaaS) system has to meet the needs of several tenant organizations, which connect to the system to utilize its services. To leverage economies of scale through re-use, a SaaS vendor would, in general, like to drive commonality amongst the requirements across tenants. However, many tenants will also come with some custom requirements that may be a pre-requisite for them to adopt the SaaS system. These requirements then need to be addressed by evolving the SaaS system in a controlled manner, while still supporting the requirements of existing tenants. In this paper, we focus on functional variability amongst tenants in a multi-tenant SaaS and develop a framework to help evolve such systems systematically. We adopt an intuitive formal model of services that is easily amenable to tenant requirement analysis and provides a robust way to support multiple tenant on boarding, which is modeled as a bi-objective optimization problem that attempts to maximize vendor profit and tenant functional commonality. We perform a substantial case study of a multi-tenant blog server to demonstrate the benefits of our proposed approach.