SaaS Licensing Models & License Types Explained
The complete guide to how SaaS is licensed and white-labeled — from source-code purchases and monthly white-label deals to revenue share, MSP, VAR, and reseller arrangements. Compare every license type side-by-side and find the model that fits your business.
Need a quick definition instead? Read the licensing glossary
Usage-based licensing and licence-as-a-service
Usage-based licensing charges by what is consumed — API calls, seats, transactions or active accounts — so cost grows with the buyer’s own revenue. Licence-as-a-service (licensing as a service) delivers the licence itself as a hosted, recurring subscription, with updates and support included.
Compare them in depth in perpetual vs subscription vs usage-based licensing and white-label vs SaaS licensing revenue-share models.
What is SaaS licensing?
SaaS licensing is the legal and commercial agreement that lets one company use, resell, rebrand, or extend another company's software-as-a-service product. Instead of building software from scratch, buyers acquire the right to deploy a proven SaaS under their own brand, in their own market, or as part of their own stack — often called Licensing as a Service (LaaS) or a licensed website deal.
SaaS licensing models fall into three broad families: ownership licenses (source-code purchase, exclusive rights), usage licenses (monthly white-label, per-user, floating, volume), and partnership licenses (revenue share, MSP, VAR, reseller, territory). The right model depends on your budget, technical capacity, and how much control you want over the product roadmap.
Subscription-Based
Recurring monthly or annual fees
Monthly Subscription
Pay monthly, cancel anytime – maximum flexibility
Annual Subscription
Commit yearly, save 15-25% vs monthly pricing
Multi-Year License
Lock in pricing for 2-5 years with maximum discounts
Term License
Fixed term (1-3 years) paid upfront, not monthly
Trial / Evaluation License
Full features for 30-90 days to properly evaluate
Project-Based License
License scoped to a specific project or engagement
One-Time Purchase
Single payment for permanent access
Perpetual License
Pay once, own forever – no recurring fees
Source Code Purchase
Get the actual code – full ownership and modification rights
Usage-Based
Pay based on consumption
Usage-Based / Pay-Per-Use
Only pay for what you actually use – scales with your business
Metered License
Tracked billing based on API calls, storage, or transactions
Token / Credit-Based
Buy credits upfront, spend them as needed
Elastic License
Base subscription + extra capacity when you need it
Transaction-Based
Pay per transaction processed – common for payments/APIs
Data Volume License
Pricing based on data stored or processed (GB/TB)
Capacity-Based (CPU/Core)
Licensed by server capacity – cores, RAM, or vCPUs
User-Based
Pricing per user or seat
Per-User / Per-Seat
Simple per-person pricing – add or remove users anytime
Concurrent User License
Pay for max simultaneous users, not total headcount
Tiered Pricing
Choose your tier: Starter, Pro, or Enterprise
Named User License
Tied to specific named individual, not transferable
Feature-Based
Pay for specific features
Per-Feature / Modular
Pick and pay for only the features you need
Freemium
Start free, upgrade when you need more
Flat-Rate Unlimited
One price, unlimited everything – simple and predictable
Enterprise
Custom large-scale agreements
Enterprise License
Custom terms, dedicated support, volume pricing
Site License
Unlimited users at one location – no per-seat counting
Maintenance & Support Agreement
Annual fee for updates, patches, and technical support
BYOL (Bring Your Own License)
Use your existing licenses in cloud environments
Partnership
Revenue sharing and outcome-based
Revenue Share
Pay a percentage of revenue you generate – aligned incentives
Outcome-Based / Success Fee
Pay based on results achieved – true performance pricing
Ownership/Legal Type
Proprietary vs open-source licensing
Proprietary License
Closed-source – use as-is, no code access
Open-Source License
Source code available – modify and redistribute freely
Freeware
Free to use forever, but source code not available
Shareware / Trial License
Try before you buy with time or feature limits
Device & Hardware-Based
Licenses tied to specific devices or machines
Per-Device / Per-Machine
License tied to specific hardware or device
Node-Locked License
Cryptographically bound to a specific server
Floating License
Pool of licenses that float between active users
Volume & Bulk
Bulk purchasing with volume discounts
Volume License
Buy in bulk, get significant volume discounts
Bundle / Suite License
Multiple products packaged together at a discount
Reseller & Partner
MSP, OEM, and partner licensing
MSP / Reseller License
Special terms for agencies to resell to multiple clients
OEM License
Embed software into your own product or hardware
Environment-Based
Dev, test, production, and offline licenses
Developer / Test License
Free or discounted for development environments only
Runtime / Production License
Required for live production deployments
Offline / Air-Gapped License
Works without internet – perfect for secure environments
Other
Custom arrangements
Other / Custom
Custom licensing arrangement
Understanding License Ownership Types
Beyond pricing models, software licenses differ in their ownership structure. This is especially important for white-labeling decisions.
Proprietary
Closed-SourceYou use the software as-is without access to the underlying code. The vendor retains all IP rights. White-labeling requires explicit permission.
Open-Source
Source Code AvailableSource code is publicly available. You can modify, extend, and often white-label freely. Check specific license terms (MIT, GPL, Apache).
💡For White-Labelers: Open-source licenses (especially MIT and Apache 2.0) are ideal for white-labeling as they allow rebranding with minimal restrictions. GPL licenses require derivative works to also be open-source, which may affect your business model.
Quick Comparison
Compare popular licensing and white-label options at a glance
License Types
| Feature | Monthly | Source | MSP | Volume |
|---|---|---|---|---|
| Upfront Cost | Low | High | Medium | Medium |
| Multi-Client | Varies | |||
| Volume Discount | ||||
| Best For | Startups | Custom Dev | Agencies | Enterprise |
White-Label Types
| Feature | Full | Co-Brand | Reseller | API |
|---|---|---|---|---|
| Remove Branding | Partial | |||
| Custom Domain | Varies | |||
| Tech Required | Low | Low | None | High |
| Control Level | Full | Partial | Sales | Full |
Frequently Asked Questions
Not sure which type is right for you?
Browse our marketplace and filter by license or white-label type to see what's available, or contact sellers directly to discuss custom arrangements.