Last reviewed August 27, 2026 by the B2B SaaS Stack Editorial Team
B2B software buying comes with its own vocabulary. Pricing pages, security reviews, procurement documents and implementation plans often assume buyers already understand terms such as ARR, seat-based pricing, SOC 2, SSO and data residency. This glossary explains common B2B SaaS terms in plain English.
Pricing and Commercial Terms
Annual Recurring Revenue (ARR)
The annualized value of recurring subscription revenue. ARR is commonly used by SaaS companies to describe the scale of recurring business, but it is not the same as profit or cash flow.
Monthly Recurring Revenue (MRR)
The monthly equivalent of recurring subscription revenue.
Seat-Based Pricing
Pricing based on the number of users or licensed seats. Buyers should verify whether inactive, guest, viewer or admin users count toward billable seats.
Usage-Based Pricing
Pricing tied to consumption such as API calls, data volume, transactions, compute time, messages or credits.
Platform Fee
A fixed base charge for access to the software, sometimes combined with seat or usage fees.
Minimum Commitment
A contractual minimum spend, usage level or term required by the vendor regardless of actual adoption.
Overage
Charges incurred when usage exceeds the amount included in a plan or contract.
Renewal
The continuation of a subscription for another term. Buyers should check auto-renewal language, notice periods and price-change provisions.
Procurement and Contracts
Order Form
A commercial document specifying products, quantities, pricing, term and customer details, usually governed by a master agreement.
Master Subscription Agreement (MSA)
The main legal agreement governing use of the software and the relationship between vendor and customer.
Service Level Agreement (SLA)
A documented commitment covering measurable service standards such as uptime, response times or support targets.
Data Processing Agreement (DPA)
An agreement governing how personal data is processed, protected, transferred and handled between the parties.
Business Associate Agreement (BAA)
An agreement used in applicable U.S. healthcare contexts to establish responsibilities for handling protected health information under HIPAA.
Termination for Convenience
A contract right allowing a party to exit without proving breach, subject to the notice and payment terms in the agreement.
Implementation and Adoption
Implementation
The process of configuring, integrating, migrating data to and rolling out a software product.
Onboarding
The activities that help users or administrators start using a product, including setup, training and early guidance.
Time to Value
The time between purchase and when the customer begins receiving meaningful business value.
Change Management
The process of helping people and teams adopt a new system, workflow or operating model.
Professional Services
Paid implementation, configuration, migration, consulting or custom work delivered in addition to the software subscription.
Security and Identity
Single Sign-On (SSO)
An authentication approach allowing users to access multiple applications through one identity provider.
Multi-Factor Authentication (MFA)
An authentication method requiring more than one factor, such as a password plus an authenticator app or hardware key.
Role-Based Access Control (RBAC)
A permission model where access is assigned according to user roles.
SOC 2
An attestation framework used to evaluate controls relevant to security and other trust-service criteria. The report’s scope and period matter.
ISO 27001
An international standard for information-security management systems.
Data Residency
The geographic location where customer data is stored or processed.
Encryption at Rest and in Transit
Protection of stored data and data moving across networks through encryption.
Integrations and Technical Terms
API
An application programming interface that allows systems to exchange data or trigger actions programmatically.
Webhook
An automated event notification sent from one system to another when a specified event occurs.
Native Integration
An integration built and maintained directly by a vendor rather than through custom code or a third-party automation platform.
iPaaS
Integration Platform as a Service: software used to connect applications and automate data movement across systems.
Sandbox
A separate testing environment used to configure or test changes without affecting production data or workflows.
Product and Usage Metrics
Activation
The point at which a user completes a meaningful first action associated with product value.
Adoption
The extent to which intended users actively use the product or key features.
Retention
The share of customers or users that continue using the product over time.
Churn
The loss of customers or recurring revenue during a period.
Net Revenue Retention (NRR)
A measure of recurring revenue retained from an existing customer cohort after expansion, contraction and churn.
How to Use This Glossary
Ask vendors to define ambiguous terms directly in the proposal or contract. Two products may both advertise “enterprise SSO,” “unlimited usage” or “24/7 support” while attaching very different conditions. Use this glossary alongside How We Review and Editorial Policy when evaluating software.