Freemium is a term used for the sales or business model which describes the practice of SaaS companies or vendor in which they offer their product free of charge with basic features and functionality. Typically, this offering is free of charge to attract sufficient customer base which is expected to turn into Paying customers.
Paying customers typically get better feature set of the product without any restrictions based on their SaaS subscription plan.
There is a lot of discussion in the Industry on whether this is a good model or the best there is as there is cost attached in attracting, maintaining and supporting free customers who may not convert.