ToolScoutBuying B2B software means decoding a lot of jargon. Sales pages assume you already know what “seat-based pricing” or “SCIM provisioning” mean. This glossary explains the terms in plain English, with practical context for how each one affects your buying decision.
Pricing & Licensing
Seat-based pricing
You pay a recurring fee for every user (seat) who can log into the tool. Most B2B SaaS works this way. Watch for minimum seat requirements — Monday.com, for example, requires at least 3 seats on paid plans even if only one person uses it.
Per-active-user pricing
You pay only for users who actually log in during a billing period. Slack uses this model. It’s friendlier for organizations with occasional users.
Usage-based pricing
You pay based on consumption — API calls, emails sent, storage used, automation runs. Examples: Stripe (per transaction), Make (per operation), Zapier (per task). Costs scale with success but can spike unpredictably.
Tiered pricing
Plans are bundled into named tiers (e.g., Starter / Pro / Enterprise) with feature gating. The jump between tiers is often abrupt — HubSpot Marketing Hub goes from $0 to $890/mo with no middle option.
Annual contract
A one-year minimum commitment, usually with a 10–20% discount versus monthly billing. Most enterprise B2B tools require annual contracts for paid plans.
Annual prepay
You pay the entire year upfront. Some vendors offer additional discounts for prepayment versus annual-but-monthly-billed contracts.
Freemium
A genuinely free plan exists alongside paid plans, designed to convert users over time. Different from a free trial. Notion, HubSpot CRM, and Trello all offer freemium plans.
Free trial
Time-limited access to paid features (typically 14 or 30 days). Salesforce, Asana, and Monday.com offer free trials on their paid plans.
Contracts & Commercial Terms
MRR (Monthly Recurring Revenue)
The vendor’s predictable monthly income. When a vendor talks about your “MRR contribution,” they mean what you pay them per month. Investors care about MRR more than any single payment.
ARR (Annual Recurring Revenue)
MRR × 12. Often used in enterprise sales conversations. “What’s your ARR?” means “what’s the annualized total of your recurring contracts?”
TCO (Total Cost of Ownership)
The full cost over a period, including subscription fees, implementation, training, integration build-out, and ongoing admin. The list price is rarely the TCO. Salesforce TCO often includes consultants at $150–300/hr.
Implementation fee
A one-time setup fee, often charged for enterprise contracts. Can range from $500 (small SaaS) to $50,000+ (Salesforce, Workday).
True-up
A clause where you owe additional fees if you exceed agreed usage. Common in enterprise contracts. Read it carefully — usage spikes during contract terms can trigger surprise bills.
Cancellation clause
Defines when and how you can cancel. Many B2B contracts auto-renew unless you cancel 30–90 days before the renewal date. Calendar this date.
Architecture & Integration
API (Application Programming Interface)
A way for other software to programmatically interact with the tool — read data, create records, trigger actions. If a tool doesn’t have an API, integrating it with anything custom is impossible.
Webhook
A reverse API: the tool calls your URL when something happens. Used for real-time integrations. “When a new lead is created, send a webhook to my Slack channel.”
REST API
The most common API style. Uses standard HTTP methods (GET, POST, PUT, DELETE). Easy to work with from any programming language.
GraphQL API
A more flexible API style that lets the client request exactly the data it needs in one call. Used by Shopify, GitHub, and Linear.
iPaaS (Integration Platform as a Service)
Services like Zapier, Make, and Workato that connect tools without code. Useful when neither tool has a direct integration with the other.
SDK (Software Development Kit)
A library that wraps a vendor’s API in a programming language (Python, JavaScript, etc.) to make integration easier.
Native integration
A built-in connection between two tools, maintained by the vendor. Better than third-party connectors because it’s typically more reliable and supported.
Identity & Security
SSO (Single Sign-On)
One login that works across multiple tools. Usually implemented via SAML or OIDC. Most vendors gate SSO behind enterprise tiers — sometimes called the “SSO tax” because it can double the price.
SAML
A protocol for SSO, especially common in enterprise environments. Works with identity providers like Okta, Azure AD, and Google Workspace.
SCIM (System for Cross-domain Identity Management)
Automated user provisioning and deprovisioning from your identity provider. When someone joins or leaves your company, SCIM creates or removes their accounts in connected tools automatically. Critical for security at 50+ employees.
MFA (Multi-Factor Authentication)
A second authentication step beyond password — typically a code from an authenticator app, SMS, or hardware key. Should be enabled on every business tool that supports it.
RBAC (Role-Based Access Control)
Permission systems that grant access based on a user’s role rather than per-user settings. Lets you say “all sales managers can view all opportunities” without configuring each person.
Audit log
A record of who did what and when. Critical for compliance, security investigations, and undo-ing accidents. Often gated behind higher tiers.
SOC 2
A third-party audit standard that validates a vendor’s security controls. SOC 2 Type II reports cover a 6–12 month period. Most enterprise buyers require SOC 2 from vendors handling sensitive data.
GDPR / CCPA
Data privacy regulations (European Union and California). Vendors handling personal data of EU or California residents must comply. Look for a Data Processing Agreement (DPA) in the vendor’s contract.
Product Concepts
CRM (Customer Relationship Management)
Software that stores customer/prospect data and tracks sales interactions. Examples: HubSpot, Salesforce, Pipedrive.
MAP (Marketing Automation Platform)
Software for nurturing prospects through automated email campaigns, lead scoring, and behavior tracking. Examples: ActiveCampaign, HubSpot Marketing Hub, Marketo.
CMS (Content Management System)
Software for publishing and editing website content. Examples: WordPress, Webflow, Ghost, Contentful.
CDP (Customer Data Platform)
Software that consolidates customer data from many sources into one unified profile, then makes it available to marketing tools. Examples: Segment, mParticle, Hightouch.
Helpdesk / Support desk
Software for managing customer support requests as tickets. Examples: Zendesk, Freshdesk, Help Scout, Intercom.
PM (Project Management)
Software for planning, tracking, and coordinating work. Examples: Asana, Monday.com, ClickUp, Notion.
LMS (Learning Management System)
Software for delivering training courses, quizzes, and certifications. Examples: TalentLMS, Docebo, LearnUpon.
ATS (Applicant Tracking System)
Software for managing job applications, candidates, and interviews. Examples: Greenhouse, Lever, BambooHR ATS.
Product Features
Workflow automation
Rules that automatically trigger actions based on events. “When a deal is marked Won, create an onboarding task and notify the success team.” Sometimes called automation rules, workflows, or recipes.
Custom fields
User-defined data fields beyond what the tool ships with. Lets you track domain-specific information. Often gated behind paid tiers.
Custom objects
User-defined record types beyond what the tool ships with. Salesforce, HubSpot, and Airtable support custom objects on higher tiers.
Pipeline / Funnel
A visual representation of stages a record moves through (e.g., sales pipeline: Lead → Qualified → Proposal → Closed Won).
Kanban
A board view where records appear as cards in columns representing status. Originated in Toyota manufacturing. Used in Trello, Asana, Notion, GitHub Projects.
Gantt chart
A timeline view showing tasks as horizontal bars, with start/end dates and dependencies. Used for project planning. Available in Asana Timeline, Monday.com Timeline, Notion (workaround), and Microsoft Project.
Dashboard
A configurable view that combines charts, KPIs, and recent activity in one screen. Most B2B tools include some dashboard capability.
White-labeling
Removing the vendor’s branding so the tool appears as yours. Common for agencies reselling services. Usually charged extra.
Buying & Negotiation Terms
POC (Proof of Concept)
A trial period — often paid — where you implement the tool with real workflows to validate it works before committing. Common for enterprise contracts above $50K/yr.
RFP (Request for Proposal)
A formal document asking vendors to propose how their solution meets your needs, with pricing. Used by enterprises and government buyers.
Discount stacking
Combining multiple discounts (annual prepay, multi-year contract, volume tier) to lower the effective price. Always ask about every available discount.
List price vs. street price
List price is published. Street price is what you actually pay after negotiation. For tools above $1K/mo, street price is typically 10–30% below list.
Q4 push
Vendors often offer aggressive discounts at quarter-end, especially Q4 (October–December), to hit revenue targets. Time large purchases accordingly.
Procurement review
Your organization’s process for vetting vendors — security review, legal review, financial review. Can take 2–8 weeks. Factor into timelines.
Still Confused?
If a term in your evaluation isn’t on this list, contact us and we’ll add it. We update this glossary as new patterns emerge in B2B software pricing and contracts.
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