SaaS, Azure application or virtual machine: which Microsoft Marketplace offer type fits your software?

Updated 12 Nov 2026

The short answer. At WeTransact, we tell every team to choose its offer type carefully, because Microsoft says you cannot change it later. The question that sorts most software is where it runs. If you run it and the customer pays you one price, it is SaaS. If it is installed in the customer's own Azure subscription, it is an Azure application, a virtual machine or a container.

In plain words. SaaS is software you run and rent out. The other types are software you package so the customer runs it inside their own Azure account.

Transactable means Microsoft bills the customer, collects the money and pays you. A MACC (Microsoft Azure Consumption Commitment) is a promise a large customer makes to spend a set amount on Azure.

Does this apply to you?

Probably yes, if you are about to publish and need to pick an offer type. Microsoft Learn, Microsoft's official documentation site, says you cannot change the type once you select it. You would have to create a new offer. If you are new to the store, start with our guide to what Microsoft Marketplace is and how it works.

Not yet, if you have not decided where your software will run for customers. Settle that with your engineering lead first. We recommend your sales lead joins too, because the offer type sets how you bill and who pays for the cloud.

Be careful, if you run a separate copy of your product for each customer, or part of your product sits in the customer's cloud. Those cases are the gray area. We cover them below.

Which offer types exist on Microsoft Marketplace?

Microsoft's publishing guide lists these offer types:

• Software as a service (SaaS): cloud-based subscription software.
• Azure application: a solution that deploys several Azure resources. It comes as a solution template or a managed application.
• Azure virtual machine: a virtual appliance or software image.
• Azure container: a Kubernetes application for a managed Azure Kubernetes Service cluster.
• Dynamics 365: solutions that build on or extend Dynamics 365.
• Professional service: consulting and implementation services.
• Power BI app, Microsoft 365, managed service and Dragon Copilot: the rest of the list.

Microsoft's transact page (updated 18 August 2026) shows which of these Microsoft can bill for: SaaS, managed applications, containers, virtual machines, Dragon Copilot Physician Apps and Agents, Dynamics 365 apps and Business Central, Power BI visuals and professional services. Solution templates are not transactable.

Not sure which fits? Use the test in the next section.

The test we use: who pays for the cloud?

One simple test sorts most software. It is our shortcut, not a Microsoft rule.

• The software runs in your environment and the customer pays you one price. That is SaaS.
• The customer's Azure subscription pays for the infrastructure the software runs on. That is an Azure application, virtual machine or container.

Microsoft Learn supports both halves. For SaaS, the publisher treats Azure usage and license fees as one cost, and the customer does not see the infrastructure bill. For virtual machines, containers and Azure applications, the customer's Azure subscription is billed for infrastructure, shown apart from your license fee.

SaaS: what Microsoft requires

Microsoft Learn's transact page says a SaaS application "must be a multitenant solution". We read that as one running product shared by many customers. Microsoft Learn does not define the word on the pages we read.

The transact page and the SaaS planning page add three more requirements for a transactable SaaS offer:

1. Sign-in with Microsoft Entra ID, Microsoft's sign-in system for business accounts. Buyers with an Entra account must be able to use single sign-on, and Microsoft accounts must work too.
2. The SaaS Fulfillment APIs, the connection that tells your product when a customer buys, changes or cancels. Microsoft Learn says critical API changes must be supported within 24 hours.
3. A landing page and a webhook that run 24/7. New buyers arrive on the landing page. The webhook receives Microsoft's notices, such as a cancellation.

Microsoft Learn also says SaaS publishers manage and pay for the infrastructure that supports their customers' use. For the full steps, see our step-by-step guide to selling on Microsoft Marketplace.

Azure application: two kinds

Microsoft Learn describes Azure Application as the offer type to sell and deploy solutions hosted in your customer's Azure tenant (the customer's own Azure environment). It sets up virtual machines, containers, networking and storage in the customer's Azure account, from a template.

• Managed application. Transactable. The resources go into a resource group in the customer's subscription. The publisher can manage that group, and the customer's access can be full or restricted. Microsoft Learn says its monthly or metered price must cover only the management fee, not software, Azure infrastructure or add-ons. Software license costs go through an underlying virtual machine or container offer. Another Microsoft Learn page describes a setup where the customer pays one flat fee that includes infrastructure. The pages disagree, so ask Partner Center support which applies to your design.
• Solution template. Not transactable. Microsoft Learn says to use it when the customer manages the solution and any payment is billed through another plan, such as a paid virtual machine offer.

Virtual machine and container

A virtual machine offer is a ready-made server image. Customers can be billed per hour, or bring a license they already own. Microsoft Learn lists free trials of one, three or six months, and says customers pay the Azure cost during the trial.

A container offer is for a Kubernetes application meant for a managed Azure Kubernetes Service cluster. Pricing can be free, bring-your-own-license, or charged per core, node, pod, cluster or a custom unit.

How each type is billed

• SaaS: flat rate or per user. All plans in an offer must use the same model, and you cannot change it after publishing. On flat-rate plans you can add metered charges, such as emails sent. Terms run from one month to five years.
• Managed application: a monthly fee, with optional metered charges.
• Virtual machine and container: hourly usage billed monthly, or bring your own license.
• Dynamics 365 apps: per user, monthly or annually. Professional services: flat rate, sold only through a private offer.
• All transactable types: Microsoft's 3% store service fee applies to your license fee. Our fees guide has worked examples. For pricing models see Azure Marketplace pricing models explained.

What changes for your customer's MACC and for Microsoft's incentives

MACC. Microsoft says Azure IP co-sell eligibility is a prerequisite for an offer's MACC eligibility. Co-sell means Microsoft's own sellers work with you on a customer. The status applies to Azure applications, containers, virtual machines and SaaS, and it requires a transactable offer listed as "Sell through Microsoft". For SaaS, Microsoft says the product must be primarily platformed on Azure. For the other types, it must be deployed in Azure. We cover the Azure question in our post on whether you have to host on Azure.

Bring-your-own-license and free offers are not transactable, so they do not count toward MACC. Microsoft also says Azure services billed through a Marketplace deployment count toward a customer's commitment. Azure prepayment can pay a virtual machine's Azure usage but not your software license fee.

Frontier Accelerate for Marketplace. This is Microsoft's FY27 incentives program. Its FY27 guide says:

• AI Build & Publish pays for an AI SaaS offer that runs mainly on Azure.
• Azure credit. Microsoft sizes Azure sponsorship, its credit for your deals and free trials, by Marketplace billed sales: what customers have been invoiced through the store. Free-trial sponsorship can cover a free trial or $0 plan on a SaaS or Azure app offer.
• Open question. The guide does not say whether virtual machine, container and Azure application offers are treated differently from SaaS, or whether the separate Azure usage line counts as billed sales. Ask Microsoft before you plan around it.

See our FY27 incentives guide.

Single-tenant, multi-tenant or hybrid: which one matters?

Here is exactly what Microsoft Learn says.

• Multitenant. The transact page says a SaaS application "must be a multitenant solution". The SaaS planning page and the SaaS certification policy do not use the word.
• Single-tenant SaaS. The pages we read do not say whether a separate copy of your product per customer, run by you, is allowed as SaaS or must use another type. On this point Microsoft Learn is silent. Confirm with Microsoft or your platform partner before you commit.
• Where per-customer software goes. Microsoft Learn places software deployed into the customer's own Azure subscription under Azure application, virtual machine or container.
• Hybrid. The offer types we read include none called hybrid. Microsoft's SaaS certification policy says if your product needs components in the customer's Azure tenant, they must be deployed through a Marketplace offer and provisioned securely. It also allows smaller agents outside Azure, if they send data to an Azure-hosted environment. For MACC, Microsoft's pages say a license deployed in a hybrid environment or on-premises is not eligible.

A decision guide: if X, choose Y

• If customers just want to subscribe and use your service online, choose SaaS. Microsoft Learn calls SaaS a good fit for that, with you hosting the software.
• If you want customers to deploy and run your packaged app in their own Azure, choose a virtual machine or an Azure application. Microsoft Learn names that as the fit for both.
• If you ship a single appliance or image, choose a virtual machine. Microsoft Learn says to use it for a virtual appliance deployed to the customer's subscription.
• If your product is a Kubernetes application, choose a container offer. Microsoft Learn limits it to managed Azure Kubernetes Service clusters.
• If you or your customer need a partner to manage the solution in the customer's subscription, choose a managed application. Microsoft Learn says that is what the plan type is for.
• If you sell consulting, choose professional service and a private offer. Microsoft Learn says it can only be transacted that way.
• If you run one copy per customer in your own cloud, ask Microsoft first. The pages we read do not say.
• If you host outside Azure, read our post on whether you must host on Azure to sell on Microsoft Marketplace before you choose.

Frequently asked questions

Which offer types exist on Microsoft Marketplace?

Microsoft lists SaaS, Azure application, container, virtual machine, Dynamics 365, professional service, Power BI app, Microsoft 365, managed service and Dragon Copilot. Not all are transactable.

What is the difference between SaaS and a managed application on Microsoft Marketplace?

SaaS runs in your environment, and Microsoft bills the customer one price for the subscription. A managed application deploys into the customer's Azure subscription, where the customer's Azure account pays the infrastructure. Microsoft Learn says its monthly or metered price covers only the management fee.

Is this a SaaS, a managed application, or a hybrid deployment?

If you run it and bill one price, it is SaaS. If it deploys into the customer's subscription, it is an Azure application, virtual machine or container. Microsoft's list has no hybrid offer type.

Single-tenant, multi-tenant or hybrid: which one matters on Microsoft Marketplace?

For SaaS, Microsoft Learn's transact page says multitenant. The pages we read are silent on single-tenant SaaS. For hybrid, components in the customer's Azure tenant must go through a Marketplace offer.

Can I change my offer type after I publish?

No. Microsoft Learn says that once you select an offer type you cannot change it, and you need a new offer to use a different one.

Sources: Microsoft Learn: Publishing guide by offer type; Plan a SaaS offer for Microsoft Marketplace; Microsoft Marketplace transact capabilities; Plan an Azure Application offer; Plan an Azure managed application; Plan a virtual machine offer; Plan a Microsoft Marketplace container offer; Introduction to listing options; Microsoft Entra ID and transactable SaaS offers; Microsoft Marketplace certification policies (section 1000); Co-sell requirements; Azure consumption commitment benefit and enrollment (all read 8 November 2026). Microsoft's FY27 incentive guide, updated 20 October 2026. The who-pays-for-the-cloud test is our own shortcut. Microsoft may change its rules at any time.

Want the full picture?

Everything here is also in our complete guide to Microsoft FY27 Marketplace incentives, with plain-words notes for newcomers. Get the complete FY27 guide

Not sure which incentive fits your company?

Ask for your free Microsoft Incentives Assessment: a personalized report of every incentive your company can claim, what each is worth, and the order to claim them. Free, no obligation. No Partner Center login needed to start. Ask for your free Assessment