I’ve got a site with half a million monthly monthly views with several hundred categories (I think it’s only about 300? EDIT: it’s 814). It’s on a reasonably fast system with 2 cores {4 threads} and 16 gb ram. Performance is ok. I think that it was on a digital ocean 8gb cpu optimized instance.
I think that all you can do is to try. If those groups have little interaction across each other, you could make it a multisite instance which would split them across multiple databases. They could share a single site as the SSO server.
Median performance is pretty good, but 99th percentile is pretty bad:
