--- title: "SaaS on Azure: what Microsoft's cloud offers SaaS builders and buyers" description: "Azure is mostly infrastructure and platform. How SaaS companies build on it, four tenancy models, the Marketplace 3% fee worked through, and AWS compared." canonical: "https://saascron.com/azure-saas/" language: "en-US" author: "Ricardo Machado" author_url: "https://saascron.com/author/ricardo-machado/" published: "2026-10-26T17:00:00-04:00" updated: "2026-10-26T17:00:00-04:00" category: "Platforms" tags: ["Azure", "Microsoft", "Platforms", "Multi tenant", "Marketplace"] --- # SaaS on Azure: what Microsoft's cloud offers SaaS builders and buyers > Azure is mostly infrastructure and platform. How SaaS companies build on it, four tenancy models, the Marketplace 3% fee worked through, and AWS compared. You searched for "Azure SaaS" and found three different things: Microsoft's own apps, guides to building software on Azure, and a marketplace full of other companies' products. You want to know which one applies to you. Azure, Microsoft's cloud, mostly sells infrastructure and platform services that other companies build on. "Azure SaaS" usually means a software company running its product on Azure, selling it through Microsoft Marketplace, or both. The difference decides who secures what and who takes a cut of your revenue. This guide covers where SaaS sits in Azure's service models, Microsoft's four tenancy models for SaaS builders, the Marketplace fee with the arithmetic, and a short comparison with AWS. For what SaaS is, see [What is SaaS?](https://saascron.com/what-is-saas/). For the line between SaaS and the platforms it runs on, see [SaaS vs PaaS](https://saascron.com/saas-vs-paas/). ## Azure and SaaS in plain terms Think of a shared commercial kitchen. The owner rents cooking stations to independent chefs, supplies the ovens and the power, and keeps the building safe. The owner also cooks a few dishes of its own under its own brand. At the front, a counter sells the tenants' dishes to walk-in customers and keeps a small fee per sale. Azure is the kitchen. Microsoft's own dishes are Microsoft 365 and Dynamics 365, which are SaaS. The independent chefs are SaaS companies that rent compute and databases and sell their own applications. The front counter is Microsoft Marketplace. Microsoft's [shared responsibility page](https://learn.microsoft.com/en-us/azure/security/fundamentals/shared-responsibility) (updated August 24, 2026) sorts its services the same way. Infrastructure as a service (IaaS) means you manage virtual machines, operating systems and applications. Platform as a service (PaaS) means you "deploy applications without managing VMs or operating systems", with examples such as Azure App Service, Azure Functions and Azure SQL Database. SaaS means "You use ready-made applications", with Microsoft 365 and Dynamics 365 as examples. ## Who secures what When you build a SaaS product on Azure PaaS, Microsoft's responsibility matrix puts the operating system, physical hosts and datacenter on Microsoft's side. Applications and network controls are shared. Customer data, configurations and identities stay with the customer in every model. The page adds: "For all cloud deployment types, you own your data and identities." For a SaaS company, the customer in that matrix is you. Your tenants' data, your access rules and the way you keep tenants apart are your job, whatever Azure runs underneath. ## Four ways to arrange tenants A tenant is one customer of your SaaS product, usually a company and its users. Microsoft's [Azure Architecture Center](https://learn.microsoft.com/en-us/azure/architecture/guide/saas-multitenant-solution-architecture/) separates the ideas: "SaaS is a business model", while multitenancy "is a way of architecting a solution to share components between multiple tenants". Its [tenancy models guide](https://learn.microsoft.com/en-us/azure/architecture/guide/multitenant/considerations/tenancy-models) names four common models. The last column is a rough match to the terms AWS uses, added for readers who know both clouds. | Azure model | What tenants share | Microsoft's stated trade-off | Closest AWS term | |---|---|---|---| | Automated single-tenant deployments | Nothing: each tenant gets its own infrastructure | Strong isolation; low cost efficiency | Silo | | Fully multitenant | Everything | Lowest cost; a change or failure can reach every tenant | Pool | | Vertically partitioned | Most tenants share; some get dedicated deployments | Shared savings plus isolation where it is paid for; code must support both | Mixed tiers (pool and silo) | | Horizontally partitioned | Shared application tier, separate components such as a database per tenant | Limits noisy neighbors on the heavy component | Between bridge and silo | Microsoft puts the cost of the first model bluntly: "If a single tenant requires a specific infrastructure cost, 100 tenants probably require 100 times that cost." For the vertically partitioned model, Microsoft suggests cheaper shared resources for customers on a trial, and a higher rate for customers who want a single-tenant deployment. ## Selling through Microsoft Marketplace Microsoft Marketplace lets Azure customers buy your SaaS product with Microsoft billing them. Microsoft's [transact capabilities page](https://learn.microsoft.com/en-us/partner-center/marketplace-offers/marketplace-commercial-transaction-capabilities-and-considerations) (updated August 18, 2026) sets the rules: - **Fee:** "Microsoft charges a 3% standard store service fee when customers purchase your transact offer." A 50% discount on that fee can apply to private offer renewals for qualifying customers. - **Requirements for SaaS:** the product "Must be a multitenant solution, use Microsoft Entra ID for authentication, and integrate with the SaaS Fulfillment APIs". - **Pricing models:** flat rate, per user and usage-based, with metered billing on up to 30 custom dimensions per offer. - **Infrastructure:** your Azure costs are billed to you, not to the buyer, so they belong inside your price. - **Terms:** free trials of 1 to 180 days, and contract durations of up to five years. **Example:** you sell a three-year SaaS contract worth $240,000 as a private offer. - Standard fee: $240,000 x 3% = $7,200, so you receive $240,000 - $7,200 = $232,800 before your own costs. - At renewal, with the 50% fee discount: 3% x 50% = 1.5%, so $240,000 x 1.5% = $3,600. - Microsoft's own illustration: a $100.00 monthly license pays out $97.00, with $3.00 kept by Microsoft. ## Azure and AWS, briefly The two marketplaces start at the same rate for this deal and differ at the edges. AWS figures are from its [listing fees page](https://docs.aws.amazon.com/marketplace/latest/userguide/listing-fees.html), checked October 17, 2026, and are covered in [AWS SaaS](https://saascron.com/aws-saas/). | Item | Microsoft Marketplace | AWS Marketplace | |---|---|---| | Standard SaaS fee | 3% | 3% public offer; private offers 3% under $1M | | Large private offers | 3% standard, unless otherwise specified | 2% from $1M; 1.5% from $10M | | Renewals | 50% discount on the fee for qualifying private offer renewals | 1.5% | | Identity requirement for SaaS | Microsoft Entra ID | Not part of the fee page | | Tenancy guidance names | Single-tenant, fully multitenant, vertical, horizontal | Silo, bridge, pool | On a $1,200,000 private offer, the standard rates give $1,200,000 x 3% = $36,000 at Microsoft and $1,200,000 x 2% = $24,000 at AWS. Large deals can carry negotiated terms, so model your own case with the current pages. If your buyers already run Microsoft 365, Entra ID sign-in is one less integration for them; see [Microsoft 365 as SaaS](https://saascron.com/microsoft-365-saas/). ## Common mistakes 1. **Calling a product SaaS because it runs on Azure.** Software installed on the buyer's own Azure virtual machines is still software the buyer runs. Why it happens: "cloud" covers both. Instead: ask who operates the application and whether the buyer only signs in. 2. **Assuming Microsoft secures your tenants.** Data, identities and configuration stay with you in every model. Why it happens: a large provider feels like a guarantee. Instead: write down which controls are yours and who owns each one. 3. **Leaving Azure costs out of the Marketplace price.** For SaaS offers, infrastructure is billed to you, not to the buyer. Why it happens: on other offer types the buyer pays the Azure bill. Instead: price the license to cover hosting, the 3% fee and margin. 4. **Choosing single-tenant deployments for everyone.** Cost grows with each tenant, and every deployment needs updates. Why it happens: full isolation is the easiest answer to a security questionnaire. Instead: share by default and sell dedicated deployments as a paid tier. ## Sources - Microsoft Learn, [Shared responsibility in the cloud](https://learn.microsoft.com/en-us/azure/security/fundamentals/shared-responsibility), updated August 24, 2026, checked October 17, 2026. - Microsoft Learn, [SaaS and multitenant solution architecture](https://learn.microsoft.com/en-us/azure/architecture/guide/saas-multitenant-solution-architecture/) and [Tenancy models for a multitenant solution](https://learn.microsoft.com/en-us/azure/architecture/guide/multitenant/considerations/tenancy-models), checked October 17, 2026. - Microsoft Learn, [Microsoft Marketplace transact capabilities](https://learn.microsoft.com/en-us/partner-center/marketplace-offers/marketplace-commercial-transaction-capabilities-and-considerations), checked October 17, 2026. - AWS, [Listing fees for AWS Marketplace sellers](https://docs.aws.amazon.com/marketplace/latest/userguide/listing-fees.html), effective January 5, 2024, checked October 17, 2026. ## In three sentences Azure mostly sells infrastructure and platform services, and "Azure SaaS" usually means a SaaS company that runs its product on Azure, sells it through Microsoft Marketplace, or both. Microsoft describes four tenancy models, from a dedicated deployment per tenant to fully shared, and you keep responsibility for data, identities and tenant isolation in all of them. Marketplace SaaS offers pay a 3% standard fee, so a $240,000 private offer pays $7,200, and the product must be multitenant, use Entra ID and integrate the SaaS Fulfillment APIs. --- Canonical: