Not long ago, the software as a service development model was quite new. But today, SaaS programming is among the key software trends worldwide. GlobeNewswire reports that the global cloud computing market, which is the SaaS industry’s umbrella, will reach “$947.3 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 16.3%.”

That makes SaaS application development a perfect option for multiple industries, including retail, fintech, healthcare, marketing, etc. Companies believe building a SaaS product is necessary to ensure business growth. However, it requires them to have a proper understanding of SaaS implementation methodology and SaaS architecture best practices. Then they can avoid potential pitfalls and successfully overcome emerging challenges.

This SaaS application development tutorial will teach you how to build a software platform and leverage SaaS advantages to achieve better results for your company. Keep reading!

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What Is a SaaS Application?

SaaS applications use a subscription model, which offers flexibility and a customization of features based on the user groups’ needs. Being cloud-based, SaaS solutions allow for accessing data from all devices and web browsers via the Internet. That’s why users don’t need to install them locally on their hardware or upgrade the latter to run a program efficiently.

For instance, the most popular SaaS solutions are Jira, Zoom, Slack, Dropbox, Netflix, Spotify, and many others.

saas application development popular saas apps

Standard Features of SaaS Applications

You can find the basic characteristics of SaaS cloud application development products here:

01

Single sign-on (SSO)

How does SSO work? It takes users’ initial logins to a particular system, encrypts them to make them secure, and then utilizes such tokens to provide automatic access to all the other necessary systems. So clients do not need to submit their usernames and passwords repeatedly. This helps to reduce costs and improve productivity since your support desk will deal with fewer issues related to forgotten passwords.
02

Subscription options

The pricing for using SaaS software development products depends on subscription tiers. Thus, you can define an appropriate pricing model for your solution by considering your SaaS customization opportunities. Traditionally, there are some subscription options provided, from free trials and premium versions to enterprise-level pricing.
03

Multi-tenancy

When it comes to SaaS-based application development, implementing a multi-tenancy model means deploying one solution to serve numerous users (tenants). SaaS software developers prefer this model since it brings convenience when maintaining the app, as well as improving the efficiency of the used resources.
04

Scalability

Typically, it is challenging to predict SaaS app usage, and thus, it may vary significantly over the period of several months. That is why most SaaS solutions are built to meet such a continuous fluctuation of users.

Pros and Cons of SaaS Application Development

Below, we briefly describe SaaS development services’ most critical advantages and disadvantages.

Advantages:
01

Cost-efficiency

Since your SaaS platform is cloud-based, it guarantees savings on your costs. That is because your company only pays for the bandwidth it uses. Moreover, you do not need to maintain your own costly server network.
02

Higher speed

Deploying cloud-based products is much easier and faster than other approaches. Thus, you will significantly reduce your solution's time-to-market.
03

Development flexibility

A SaaS business development model offers excellent elasticity to create, edit, and update code. Also, it is advantageous when you need to add new features to your product.
Drawbacks:
01

Security

Providing strong security is vital for SaaS application development solutions. So companies must ensure proper user data protection and constant updates of their products using the latest security protocols and standards.
02

Low entry barriers

Unfortunately, other competitors may try to replicate your SaaS product. And since SaaS solutions are primarily subscription-based, you should always provide your clients with the best possible value. That is because, in the case of their dissatisfaction, they may choose your market rival offering similar pricing options.
03

Converting and retaining clients

Depending on the type and industry of your SaaS product, the conversion of prospects into clients may take from a few minutes up to several months. But with efficient SaaS account management, you can reduce this period and also extend the time users remain loyal to your solution.

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Types of SaaS Application Development Solutions

A SaaS app development model benefits both business-to-business (B2B) and business-to-consumer (B2C) products. Keeping the specific industry in mind, you can classify SaaS solutions into the following types:

 

Customer Relationship Management (CRM) Software

With a proper CRM tool such as Salesforce, companies from the eCommerce industry, for instance, can effectively manage their clients’ operations and data. So, cloud application development services may assist you in building seamless sales processes and in growing sales. That covers managing contacts, creating sales pipelines, tracking leads, reaching your target audience, building relationships with prospects and current clients, etc.

saas application development crm

When building a SaaS CRM system from scratch, you can add custom functions such as marketing automation and reporting. Thus your users will be able to track their progress and increase their business’s performance.

 

Enterprise Resource Planning (ERP) Software

As cloud-based applications, ERP systems contain different modules that aim to optimize and automate internal business processes. Such complex software may include inventory management features, billing and accounting, human resources (HR), and CRM. For example, one of the most famous names in this business is Oracle Cloud ERP.

saas application development erp

With an ERP tool, enterprises can pay as they go and tailor the required system’s features to their critical business needs, which makes it a desired solution for any business.

 

Accounting Software

Most billing and accounting SaaS tools do not refer to the specific business industry. These solutions often provide flexible subscription packages, which allow companies of various types and sizes to choose the most suitable one for them. But any business can adjust the selected software to its specific requirements.

Also, SaaS billing systems bring enough security to protect your information with encryption, while you can configure different levels of data access for particular users.

 

Project and Task Management Software

Nowadays, the most widely used project and task management tools are delivered as SaaS app solutions. You may have already heard about brands such as Jira, Trello, Asana, or ClickUp. Since project managers must supervise numerous projects simultaneously in the modern workplace, utilizing this software is essential.

With the aforementioned programs, you can focus on business strategy planning. In addition, project management software allows for setting deadlines, allocating resources, generating reports, and improving team cooperation.

 

Communication Platforms

The global coronavirus pandemic has provoked the increased use of software collaboration tools. IDC reports that 99% of remote workers use an average of 4.8 various conferencing apps. For example, many companies prefer Google Meet, Zoom, or Slack as sources for efficient communication and coordination within their teams.

All of these solutions are built with the SaaS application development model. You may choose a subscription plan based on your team size and upgrade to a more advanced one when scaling up.

 

eCommerce Platforms

You may know about industry leaders such as Shopify, BigCommerce, and Magento, famous for their reliability and large numbers of users. But at the same time, new companies, including Big Cartel and Venda, have appeared on the market. All of these platforms differentiate from each other by providing services related to particular customers or industries.

saas application development ecommerce

In addition, you can connect your SaaS eCommerce platform with other critical business systems like ERP, logistics software, or accounting tools. Many solutions also have powerful APIs, making the integration process more straightforward.

 

Human Resource Management (HRM) Solutions

Organizations use HRM software on a subscription basis to manage relevant operations like staff tracking, payroll, recruitment and onboarding activities, training, corporate benefits, etc. Some well-known tools include Dynamics 365 Human Resources and SuccessFactors HCM.

With robust SaaS HR solutions, you can achieve a high level of automation. That allows for simplifying personnel life cycle management and saving time on repetitive tasks. Also, these tools offer advanced reporting and analytics capabilities to ensure data-driven decisions.

 

Payment Gateways and Billing Solutions

Payment SaaS and billing software systems are cloud-based solutions connecting clients and merchants. They allow for generating invoices for products and services provided to customers, tracking payment receipts, creating invoices, etc. Therefore, implementing these systems brings many advantages, such as security, accessibility, scalability, and user-friendliness. Most of the payment and billing tools, such as FreshBooks or Xero, work on a subscription model. So users must pay for the platform each month or year.

 

Data Providers Solutions

These solutions facilitate the aggregation, processing, and delivery of data from various sources to the end-users or other business applications in a structured and usable format. They act as a bridge connecting data generators with data consumers, ensuring seamless data flow and accessibility. Such solutions can provide financial market data, business data, weather data, geographical data, or social media analytics.

SaaS data provider solutions like Reverse Contact offer a range of advantages, including scalability, real-time data updates, and centralized data management. They can significantly reduce the time and resources required to manage data infrastructures and ensure compliance with data governance and security standards.

Businesses can subscribe to data services based on their specific needs and can scale up or down as their data requirements change over time. The cloud-based nature of these solutions ensures high availability and reliability, making them a valuable asset for any data-driven organization.

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Things to Consider Before Getting Into the SaaS Application Development Process

After analyzing what SaaS application is, there are also some critical technical and non-technical aspects for thorough consideration. Please take a quick look at them below before checking out the checklist on how to build a cloud-based SaaS application.

 

Technical Aspects

Technology stack.

Choosing the right technology is essential since this allows you to find the required SaaS software developers and guarantee scalability. The most popular tech stack covers such programming languages and development frameworks as Angular, React, or Vue.js for front-end and Node.js, PHP, Python, or Ruby for back-end.

 

Databases.

Your database must be flexible, secure, and offer enough capacity. In addition, you should select a particular type that will fit your business requirements perfectly. Ultimately, database types depend on multiple factors, such as the information you process, scalability options, expected load, programming languages, and costs.

You must understand the key differences between the available storage options. That is especially crucial as each service provides its service level agreement (SLA).

 

Architecture.

SaaS architecture may utilize single-tenant or multi-tenant models. In the first case, numerous tenants can share the same database, computing resources, and infrastructure. Meanwhile, with the second model, each tenant has its own access. But what is the most appropriate architecture for your business? It depends on your requirements, so a software architect and a business analyst can help you select the best tenancy model to power up your SaaS solution with the right scalability and security.

saas application development multi-tenancy models

Frequent updates.

Each SaaS development company should update its software product regularly depending on collected user feedback. For instance, utilizing specific tools like Kubernetes may become vital since they assist in the automatization, scaling, and management of your cloud infrastructure.

 

Performance.

The appropriate performance is a basic need. If your SaaS platform struggles with simple issues such as obtaining information from databases and showing it in your application, your users will likely abandon it. In such a case, it is critical to know how to effectively utilize technologies like Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform, etc.

 

Third-party integrations.

Your software product must integrate with other different SaaS solutions that your clients may use. Whether it will be Jira, Salesforce, or Zoom, the ability to integrate with other popular tools is among the SaaS application development best practices.

 

Non-Technical Aspects

At the same time, there are several non-technical points to think about before starting your SaaS application development.

 

Market fit.

If you want your software platform to succeed, it is vital to find your market fit. Thus, during the initial stages of the SaaS development process, you should analyze your audience, their needs, pain points, and motivations. After running an MVP, collect feedback from your users and implement the necessary changes depending on the customer’s assessments.

 

Pricing models.

What should you pay attention to when looking for a pricing model for your SaaS app? You may take on one of the pricing approaches, such as the cost-plus, competitor-based or value-based strategies. After calculating your expenses, analyzing similar businesses’ costs, and defining the unique value you may bring to your users, you should think over the potential pricing models for your SaaS.

The key models are flat rate, usage-based, tiered, per user, per active user, per feature, and freemium. But which pricing model should you choose? That depends on multiple factors, including app features, lifetime value, customer acquisition cost (CAC), etc.

 

Focus on service.

The SaaS implementation process requires focusing on delivering high-quality products or services. That is why experienced SaaS development companies maintain close cooperation with the customer and react to their changing requirements.

 

Client acquisition.

Instead of relying only on word-of-mouth marketing, keep unit economic metrics, such as CAC, LTV, Churn and Retention rate, Total Revenue, and ROI in mind. However, its analysis is even more critical for SaaS companies since it gives you an opportunity for early pivoting when necessary.

saas application development build an MVP

How to Build a SaaS application?

Although there can be critical challenges in SaaS application development, like selecting the tech stack, meeting users’ needs, complying with regulations, integrating with third-party tools, etc., the proper development process will address them effectively. So, how to create a robust SaaS application?

 

7 Steps to Develop a SaaS App

Let’s start by analyzing each stage of the SaaS software development life cycle.

 

1. Idea Validation

Verifying your idea’s viability before starting the app development process is the first thing to start with. A software development vendor is responsible for more technical aspects, such as concept feasibility, while the business owner or marketing department should follow the checklist below to guarantee the proper validation:

  • Creating a SaaS idea;
  • Conducting extensive market research;
  • Designing a business plan, choosing a pricing strategy, etc.;
  • Revising compliance with rules.

 

2. Discovery Phase

During this stage, your tech partner structures all the plans regarding SaaS app development and prepares documents that will allow for building the desired product. Thus, a business analyst conducts relevant meetings to learn more project details and create documents like software requirements specification (SRS), risk assessment and mitigation plans, a feature breakdown list, and cost estimates. Besides, a BA assists in defining the appropriate team structure to develop an app depending on the allocated budget and timelines.

saas application development discovery phase

3. UX/UI Design

Design practices for SaaS app development are similar to the ones used to design traditional products. The particular process includes the following steps:

  • Creating a Mind Map with users’ flow and all the required functions;
  • Building a clickable prototype;
  • UI design.

You should provide users with an intuitive design and ensure it helps them to solve their tasks efficiently. Besides, you must remember that mobile-first SaaS is among the key software development trends, so paying attention to mobile mockup designs is vital.

 

4. Tech Stack Selection and Engineering

Selecting the correct technical stack is fundamental for your SaaS application development. The most popular technologies are:

  • Angular.js, Python, Java, and Flutter.
  • Microservice architecture tools like Docker and Kubernetes.
  • Databases like MongoDB.

After that, the engineering process starts.

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5. Testing

Testing your SaaS solution aims to ensure it satisfies all your user’s requirements. To eliminate bugs and other issues, a QA engineer performs tests every sprint, as well as before and after releasing the product. Some companies prefer implementing manual and automated testing together. Also, you can assess cloud security as part of a QA process.

 

6. Deployment

Deployment requires making your SaaS application development solution available to end users. A DevOps engineer prepares each part of the code for deployment and merges the whole codebase into production. When in place, your app users can utilize your software correctly. Luckily, you can implement a faster and more flexible automated deployment approach instead of routine updates.

 

7. Maintenance and Optimization

After carefully testing and launching your SaaS app, a software development vendor is responsible for maintaining, monitoring, and optimizing its performance. That allows you to satisfy your customers’ expectations and develop new functionality if needed. During this phase, there is a need to thoroughly track potential security gaps, fix UX issues, and keep the product ready to scale quickly.

 

Team Composition

Developing a SaaS product from scratch may take months and requires a dedicated team of professionals. Each of its members is focused on a particular field of expertise. Although the number of specialists on your SaaS application development team may vary, here are some specific roles to have:

01

Project Manager

The project manager (PM) plans the entire app development process, assigns tasks, tracks their fulfillment, ensures the progress meets the settled on deadlines and covers all the requirements, and maintains communication with the customer and team members.
02

Business analyst

Business analyst (BA) is responsible for gathering requirements and transforming them into relevant documentation. Also, BA helps to analyze your product’s market potential, providing your company with a viable business model.
03

UX/UI designer

UX/UI designer is responsible for designing and implementing your app’s user interface. Besides making your solution easy to use and aesthetically pleasing, they always keep your brand identity in mind.
04

Back-end developers

Back-end developers perform tasks on your SaaS app’s server side and utilize specific programming languages, such as Python, Ruby, etc., to ensure it functions appropriately.
05

Front-end developers

Front-end developers transform the design into code, mainly utilizing JavaScript and the various frameworks it offers.
06

QA engineers

QA engineers test your SaaS application to find defects, bugs, and issues, and provide reports for further bug fixing.

Also, your project needs other specialists, such as mobile app developers, a System Architect, DevOps engineers, as well as non-technical ones, such as content writers and digital marketers.

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Costs to Develop a SaaS App

Now you know how to design a SaaS product, but what budget should you allocate for its implementation? The major part of software development costs includes the salaries of your SaaS application development team. Thus, if you want to build an in-house team, you also must include the costs related to the recruitment, onboarding, administrative, and HR processes in your budget. But the most cost-effective approach to creating a solution is to outsource your SaaS application development.

In this case, your company will pay only for the time spent on your project, based on the Time and Material model, or cover the tech team’s monthly salaries, if you’re using Staff Augmentation services. Check out the rates for software engineers in different countries worldwide below.

Cost per hour, USD

North America

80-150

UK

70-100

Australia

70-150

Eastern Europe

40-65

South America

50-70

India

30-45

But how to Estimate SaaS Application Development Costs? Calculating expenses for building a SaaS product may be challenging, as it involves various factors. Below, we have analyzed some of the most popular categories to understand their specific details better.

 

Servers.

Traditionally, you will pay from $100 to $300 per 1TB of cloud storage per month. That depends on the number of users and data volumes you deal with. But remember that the increase in clients also means growth in your server capacity.

 

UX/UI Design and Development costs.

These costs may vary because of app features, integrations, design and architecture complexity, deadlines, or team location. For instance, an MVP healthcare SaaS application development solution may start from about $70,000 with a team in Eastern Europe.

 

Marketing costs.

SaaS Capital reports that typical SaaS companies spend 10% of their budgets on their marketing efforts. That involves branding activities, content marketing, social media advertising, etc. For instance, you can collaborate with Saaslinko, a SaaS SEO agency, to promote your solution with professional marketing services.

Investing in the right tools is essential for tracking and optimizing your SaaS marketing efforts. Consider integrating an email automation platform, an SEO checker, social media management software, and analytics suites to gain comprehensive insights and drive effective strategies.

SaaS Application Development Trends

Before diving deeper into trends that you should know about when using SaaS application development services, let’s discover possible go-to-market strategies for SaaS businesses. There are 3 of the most popular options here:

01

Sales-led growth

Sales-led growth, which is all about generating leads through outbound channels.
02

Marketing-led growth

Marketing-led growth improves traditional ways of promotion, adding inbound marketing activities to improve organic SEO traffic growth, such as content marketing, etc. Also, companies can fall back on advertising to enhance their go-to-market strategy.
03

Product-led growth

As a go-to-market strategy, product-led growth is focused on the product as a way for successful client acquisition and retention, conversion rate optimization, and further business expansion. This way, your SaaS business supports clients’ daily activities, enables them to make the initial purchase, and encourages them to renew subscriptions and upgrade packages.

When businesses choose the latter as the main strategy, it’s critical to adopt the following trends to transform your SaaS app into a popular solution.

 

Micro SaaS

This trend is becoming increasingly popular. It refers to finding single issues in particular niche markets and addressing them with rapid SaaS development using minimal resources. For instance, one of the trend’s results is the appearance of Carrd, a micro SaaS business that helps customers build free one-page websites. Another great example is Storemapper which allows businesses to list their store locations on the map, and thus clients can find the closest ones to them.

 

Low-code tools

With low-code platforms, clients obtain a development environment that allows for creating software solutions and their new components using a graphical user interface (GUI). Such an approach is significantly different from the traditional way of writing complicated code. Among the most popular examples are Airtable, Figma, Zoho Creator, etc.

 

SaaS collaboration tools

Since remote work has already become usual for many companies, utilizing collaboration tools is vital. Thus, applications like Slack, Zoom and Jira are widely used by businesses running operations online. And this particular trend will continue to grow.

Also, there is a need to mention artificial intelligence (AI), blockchain, and enhanced security, the usage of which will help you to stand out among competitors.

Conclusion

Now, you have the proper knowledge of how to start a complete SaaS application development process and how to build a SaaS product efficiently. And although cloud-based apps may not be a perfect fit for all business cases, the SaaS model will remain highly popular because of its advantages, like cost efficiency and development flexibility.

But if you entrust your SaaS application development to a particular vendor, you must ensure that they have the necessary experience and utilize the latest tech stack. Fortunately, as an IT Staff Augmentation company, DOIT Software offers both. Our team of engineers will be happy to assist you in creating a technically robust, secure, and scalable solution.

Contact us to set up a dedicated development team for your SaaS application development.

Frequently Asked Questions

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What is SaaS application development?

SaaS application development is the process of creating cloud-based solutions. It covers such steps as idea validation, discovery, design, engineering, testing, deployment, and post-launch maintenance.

How long does it take to develop SaaS software?

Typically, it takes four to ten months (from validating your business idea to launching the MVP product). But it also depends on various factors, including app complexity and scalability, tech stack, and how many developers are going to be involved.

How much does it cost to develop a SaaS product?

Your SaaS software development costs can vary because of multiple aspects, including your team’s location, app features, operating system, security approaches, and many more. While building a medium app with an in-house team in the United States may cost you over $100,000, outsourcing SaaS application development to countries in Eastern Europe is much cheaper – from about $45,000.

How to build a SaaS business app successfully?

You must keep up with the emerging SaaS application development trends to build an up-to-date solution. Your concept validation and the discovery phase will help you to define the main functionality for your MVP. But it is crucial to optimize your product constantly if you aim to remain successful and stay ahead of your competitors.

ANNA IVASHYNA,
PROJECT MANAGER @ DOIT SOFTWARE
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