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.
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.