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I am contemplating hosting all my client sites on one wordpress network. So far I've been installing a new wordpress installation for every site. Is it a good idea (compared to standalone installation) to have all sites hosted in one network in terms of scalability?

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No real difference either way, really. Network installs make the most sense when you want all the sites to share a single set of users. But the basic table handling is pretty much the same either way.

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In terms of scalability, separate wordpress instances would be more flexible and scalable.

The main advantage in having a WP network installation is that you only have one installation of WP and one database to manage. For instance I manage a WP multisite network of over 200 sites. When I upgrade WP I only have to upgrade once. If they were separate WP instances, I would have to upgrade 200 times!

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The other fact you have to consider however is that if the worst happened and one of your websites was targeted by hackers or if something went wrong in the database. If you were running them as part of a network it has the potential to take down your entire network rather than just that individual website. This happened to me a while back.

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