How to license our SAAS product

  • We have a SAAS product and we offer it on a monthly/yearly subscription. One of our products is an API which is also offered on a subscription basis.(Price range, $75-$300 per month). One of our clients recently requested that we license our APIs to them, to be run on their servers for security reasons. I have few questions related to how do I go about it.

    1. Should I offer it for lifetime/yearly license?
    2. Assuming, I go for lifetime license, how do I price it. Our costliest API plan currently comes as $300/month. ?
    3. If I offer it on a yearly license, how do I make sure that they renew it. Since, ours is a nodejs app, they'll have all the code and technically they don't need to renew anything to make it work.
    4. If I go for yearly license, do I just offer it for Monthly pricing x 12?

  • @mukeshgupta

    1. Lifetime license is a liability in terms of support and practically, it's not feasible. Yearly or bi-yearly plan sounds good.

    2. For pricing structure, you should now consider following point(magnitude on scale of 0-10, positive adds cost, negative reduces cost):

    • Access in in-house server for your customer (9)
    • One-time setup support (3)
    • Updates/maintenance (5) [You are probably going to provide them updates for better experience]
    • Bandwidth/storage(if applicable) you will save (-2)
    • Customer for a whole year and upfront revenue (-4) [Can go up/down depending on your current traction)
    • Possibility of new pricing model for your venture (-5) [Your first customer in this oricing segment)
    1. In few ways,
    • Build more, build fast - make code on their server old faster :)
    • Encrypt your code
    • Every time code on their server runs, it handshakes with your serve to check license validation
    1. Refer point 2.

    Additionally, make sure your license agreement does not allow code modification. The best case would be if you can convince them to use API hosted on servers and make them confide in your services.

    My personal views. Would love to discuss.

    Co-founder, Magnet(


  • @mukeshgupta , @tanmaydesai89 Any one knows out of box way to build licensing service?

Log in to reply