This solution provides the most scalable, secure, and operationally efficient architecture for a SaaS provider. AWS PrivateLink is purpose-built for this use case, allowing hundreds of AWS customers to connect to the SaaS application privately and securely from their own VPCs. It creates a private endpoint in the customer's VPC, eliminating the need for VPC peering, internet gateways, or complex routing tables. This directly solves the stated problem of managing complex routing and NAT. For on-premises customers, terminating IPsec VPN connections is the required method, and using a routing appliance or an AWS Transit Gateway/Virtual Private Gateway are all viable ways to achieve this.

A. While Transit Gateway can connect hundreds of VPCs and VPNs, it is less ideal than PrivateLink for this SaaS use case as it still requires the provider to manage routing and segmentation between all connected customers.

C. VPC peering is not a scalable solution for "hundreds of customers" due to hard limits on the number of peering connections per VPC and the operational complexity of managing CIDR conflicts and individual connections.

D. Using Site-to-Site VPN for connectivity between customer VPCs and the SaaS VPC is inefficient, adds unnecessary encryption overhead, and complicates network management compared to native AWS private connectivity options.

1. AWS PrivateLink Developer Guide, "What is AWS PrivateLink?": The documentation states, "You can make your service, hosted in your own Amazon VPC, available to other AWS customers... This is referred to as an endpoint service... Your service consumers can create a connection from their VPC to your endpoint service... using an interface VPC endpoint." This describes the exact pattern for the SaaS provider and its AWS customers.

2. AWS Whitepaper, "SaaS Lens - AWS Well-Architected Framework", Page 21: Under the "Networking and Connectivity" section, the whitepaper recommends, "AWS PrivateLink is a highly secure and scalable technology that enables you to privately expose your SaaS service to customers on the AWS network... This approach simplifies the network architecture for your customers, and removes the need for an Internet Gateway, NAT devices, or firewall rules to allow traffic from the customer VPC." This directly supports the choice of PrivateLink to solve the scenario's challenges.

3. Amazon VPC User Guide, "VPC peering basics and limitations": The guide notes, "A VPC has a limit on the number of active and pending VPC peering connections that it can have." The default limit is 50, and the maximum is 125, which makes peering unsuitable for "hundreds of customers."

4. AWS Documentation, "Transit Gateway use cases": Transit Gateway is described as a "network transit hub" to interconnect VPCs and on-premises networks. While powerful, it is a general-purpose networking tool. For the specific SaaS provider-to-consumer model, PrivateLink offers superior isolation and operational simplicity by abstracting the network layer entirely.