SaaS Application Development: Everything You Need To Know

Everything you need to know (From Planning To Design, Building, Testing, Deploying and Managing) about Software-as-a-Service (SaaS) development.
SaaS Application Development

Software-as-a-Service (SaaS) is a software licensing and delivery model which replaces the traditional software model of selling the software product or service only once.

The SaaS business model is popular as it offers recurring revenue in the form of a monthly or annual subscription payment.

Major companies are investing large amounts of capital into their SaaS platform development teams to enjoy the lucrative benefits offered by SaaS-based platforms.

SaaS development raises many unique challenges, such as requiring an understanding of cloud technologies, and how to deliver an excellent service at scale to users, without the need for substantial downtime to deliver fixes and updates.

We will address all of these topics related to the SaaS application development process throughout this guide.

Let’s start by looking at some of the reasons why you should consider SaaS software development.

Why SaaS?

The popularity of SaaS-based software is expanding rapidly due to the number of benefits it offers.

If your organization is thinking of creating software, developing a SaaS solution may be the best option.

On some occasions, an existing software business can be converted to a SaaS model without disrupting your existing customer base.

As you know, SaaS applications are hosted in the cloud and do not require installation, with updates and maintenance being executed by the software company.

The SaaS product is not sold with a lifetime license; instead, it is distributed to users using a subscription model.

There is usually confusion when comparing SaaS vs. web applications. SaaS is a more specific concept and model for software licensing and delivery.

Web application is a general term for any application which you can access through a web interface.

Anyone can develop SaaS applications with a small budget by using cloud-based technologies and storage.

Now that we’ve covered why you might choose SaaS, let’s discuss the current state of the SaaS industry.

The State of SaaS

Thanks to their ease-of-use and affordability, SaaS solutions are here to stay. The entire industry of cloud computing has exploded in popularity, and Gartner forecasts worldwide public cloud end-user spending to grow by 18% in 2021.

SaaS makes up the largest segment of this market and is forecasted to grow to $117.7 billion in 2021.

Trends:

There are some emerging SaaS trends to look out for as the industry develops and continues to evolve.

Let’s look at these trends in greater detail:

  • Product-led growth: Product-led SaaS companies typically offer a free trial, or freemium revenue model, that allows users to experience their product with the aim of retaining these customers when their trial ends. If they feel the service is valuable enough, customers will be happy to upgrade to the paid version.
  • Micro SaaS: Micro SaaS is increasing in popularity. Companies identify a single problem in a niche market, and solve that problem using minimal resources. An example of a micro SaaS company is Carrd, which allows its users to create free, fully responsive one-page websites.
  • Low-code tools: Low code platforms provide users with a development environment where they can create software and new components through a graphical user interface (such as drag-and-drop functionality). This is directly opposite of the traditional model of writing complex code.
  • SaaS collaboration tools: With remote work becoming the standard, the use of collaboration tools has skyrocketed. Tools like Slack, Zoom, and Confluence have become essential to businesses that run their operations online. This trend is likely to continue as remote work gets adopted by more companies.

Latest IPOs:


SaaS Advantages and Disadvantages

Let’s look at some of the advantages and disadvantages of the SaaS model:

Advantages:

  • Lower costs: SaaS can provide beneficial cost savings as it is entirely cloud-based. This means you only pay for the amount of data and bandwidth used, and there’s no need to own your own expensive server network.
  • Speed and accessibility: The deployment of applications has never been easier. Cloud applications can be deployed faster, thereby reducing your product or service’s time-to-market. And your customers can access your service from any internet-connected device.
  • Flexibility: A SaaS business model provides you with flexibility in creating, editing, and updating code, whether you’re adding new features or increasing security.

Disadvantages:

  • Security: SaaS authentication requires  strong endpoint security. Businesses are obligated to protect customer data and, therefore, must constantly update their SaaS offering with up-to-the-minute security protocols.
  • Low barrier to entry for competitors: Your SaaS service can potentially be replicated by a competitor. Most purchases in SaaS are subscription based, so once customers are onboard, you still need to provide better value than your competitors while still up-selling to the next subscription level. Should a customer become dissatisfied with services or support, they can simply move on to a competitor offering a similar pricing structure without having to make a larger upfront investment like one would with other software sales. An example of this scenario would be the large number of SaaS companies offering VPN services. A similar case would be the rise of streaming companies competing with Netflix.
  • Converting and keeping customers: Depending on your SaaS service offering, it can take anywhere from a few minutes to convert a prospect into a customer, up to several months.  Effective SaaS account management means shortening the conversion period as well as lengthening the time the customer remains a paying customer.
SaaS Advantages Disadvantages

Basic Features of a SaaS App

Here are some key characteristics of SaaS based solutions:

Features:

  • Single sign-on (SSO): SSO works by taking your initial login to a system, encrypting it so it is secure, and then using that token to access all other systems automatically without further need for username and password submission. Users are prevented from using the same password for multiple services, reducing the risk of a single site hack enabling access to other sites. This results in a reduction in cost and improvement in productivity because there will be less forgotten password requests to your service desk.
  • Subscription model: The pricing for a SaaS application is subscription based. Through tweaking and SaaS customization, you can eventually find an optimal pricing model for your service. There are typically several pricing options offered, from completely free to premium, as well as enterprise SaaS pricing for large organizations.
  • Multi-tenancy model: A multi-tenancy model is where one software application is deployed to serve multiple users, or tenants. A SaaS architect designs it this way as it is much more convenient to maintain the same application.
  • Flexibility: SaaS application usage is generally not predictable because consumption can dramatically vary in some months. Most SaaS applications are designed in a way to cater for this constant fluctuation in usage.

Technical and Non-Technical Aspects of a SaaS Application

When considering adopting the principles of SaaS application architecture, there are both technical and non-technical aspects to consider.

Let’s take a look at some factors to consider before building SaaS applications:

Technical:

  • Technology stack: It’s critical that you pick the right technology so you can easily find developers and scale. Your technology stack will differ greatly if you are building a SaaS API as opposed to a web application with a responsive UI. These are the tools and libraries that will make up your SaaS development framework.
  • Performance: Your service has to perform well. If simple things like fetching data from databases and displaying it in your app takes too long, it will almost certainly lead to user abandonment. Knowing how to use technologies like AWS or other cloud computing offerings is essential.
  • SaaS application integration: Your SaaS product should be able to coexist with other SaaS products that your customers are going to use. Whether that's Jira, Selenium, or Salesforce, you need to be able to integrate with these existing tools and other SaaS based technology.
  • Cloud computing and storage: How will you handle the massive amount of data related to your SaaS database? Understanding the differences between the storage options you use, such as Amazon S3 or other services like Google Cloud Storage and Dropbox, is critical, and each of these services have different SLAs.

Non-Technical:

  • SaaS market fit: You already know that finding market fit is essential to the success of your SaaS product. In the initial phases, it is likely that the feedback obtained will indicate changes needed, from minor iterations to full pivots, if the early product does not adequately meet the needs of the target market. Based on this feedback the product can be tweaked (or overhauled) to better meet the needs of the initial market segment being targeted.
  • Models and packages: The strategies for setting subscription prices are very different from pricing traditional products. Ongoing customer payments and complex product packages mean SaaS companies need to put more thought into their pricing.
  • Client acquisition: An average SaaS business spends 92% of their first-year revenue on customer acquisition. In other words, it takes 11 months to pay back their customer acquisition costs. Customer acquisition costs are crucial for every business, but analyzing it is even more vital for SaaS companies as a high acquisition cost can slow or prevent you from scaling.
Technical Non Technical Aspects SaaS

Software Development Life Cycle: 7 Stages

In this section we are going to discuss the 7 stages of the software development life cycle. These are equally relevant for the SaaS product development process.

The SaaS development process covers the analysis of user requirements, an outline, SaaS features roadmapping, UI/UX design, architecture design and coding, QA and testing activities, the SaaS deployment process, and further refinement based on feedback.

Let’s get started with this SaaS checklist to see how these 7 stages can help you learn how to create a SaaS application.

1. Planning

The planning stage is the first stage of the SaaS software development life cycle.

This is where brainstorming occurs and you gather the various requirements of the project, along with defining purpose, outcome, and associated milestones.

You may hire a SaaS consulting group at this stage, as they ensure that you adhere to best practices, and can point you towards the best framework for SaaS applications.

This includes how to best manage your SaaS compliance requirements. SaaS providers must be dependable–keeping the system online, functional, and secure for your customers who depend on it.

Controls for these services usually are designed based on a combination of security, confidentiality, availability, processing integrity, and privacy principles.

Whether you develop software solutions for health care, finance, government or other industries, it is common to see a SOC 1 or SOC 2 as a prerequisite in RFPs (request for proposals).

You should decide who the target demographic is for your service. How will they interact with your SaaS product? You must design a service that best fits the unique needs of this demographic.

You will also decide the size of the development team required to build and expand your SaaS offering. This may be the addition of a single developer, or outsourcing the entire build to a SaaS product development company.

When deciding what developers to hire, it can help to list the skills required:

  • Do the developers you are considering have experience with SaaS development tools?
  • Do they have the right mix of programming languages and technologies?
  • Will they be able to handle the SaaS data integration from your existing software to the new SaaS product?

Your developers should know how to handle any integrations or SaaS connectors you require.

Using connectors, a business can easily connect between SaaS platforms, marketing solutions, eCommerce platforms, CRMs, and social applications, which are critical to business processes. Connectors follow all the API rules, authorizations, and data transformation parameters, and when they are successfully configured, you can enjoy many SaaS application integration benefits.

Finally, you must decide on the best SaaS pricing models for your platform. This is one of the most important aspects to consider. You will need to define each pricing tier and decide whether you will offer a trial or freemium version of the app.

If you choose an incorrect SaaS cost structure, it could mean the end of the business, even if the technology and idea are sound.

These are some of the questions you must consider when building the best SaaS development platform you possibly can.

2. Design/Prototype

This is where your SaaS design takes place. Research how to develop software as a service and best practices regarding SaaS applications architecture.

For example, you may decide between single or multi-tenant architecture here.

A single instance of the software and supporting infrastructure serve a single customer. With single tenancy, each customer has their own independent database and instance of the software.

Essentially, there is no sharing happening with this option.

Multi-tenancy means that a single instance of the software and its supporting infrastructure serves multiple customers.

Each customer shares the software application and also shares a single database. Each tenant’s data is isolated and remains invisible to other tenants.

You should consider creating a SaaS architecture diagram at this stage, which will help others understand your architecture more easily.

Along with worrying about SaaS application security, you must also pay attention to the SaaS cloud security offered by your cloud service provider. Investigate their security policies closely to decide which provider would be best for you.

At the end of this stage, you may start putting together a small prototype to ensure your integrations, database selection, and cloud provider all work together as you would expect, and result in a successful prototype SaaS deployment. This is how to design a SaaS application.

3. Building/Development

Time to create your service and write some SaaS code!

Before writing any code, you should have the following pieces in place:

  • You should know the SaaS database architecture you plan on using.
  • You should know the exact SaaS cloud providers you’ll use and how much they will charge you for your expected usage.
  • You should have your software team in place—ideally they are specialized SaaS developers.
  • You may have a prototype or proof of concept in place at this stage of the SaaS development life cycle.

With this in place, your team can create the product or service to match your exact requirements and specifications.

Use your favorite project management software to ensure the project stays on track and developers adhere to SaaS best practices.

Developing SaaS applications can take a long time, and is an ongoing process.

The time required to complete this stage depends greatly on the expertise of your developers and whether they have previous knowledge in how to develop SaaS applications.

4. Testing

Many of the general principles of software testing are shared in common with SaaS application testing.

We will discuss these, along with the unique challenges that arise when testing your SaaS development platform.

SaaS testing is a software testing process in which the software application built in a Software-as-a-Service model is tested for the functional, as well as non-functional, requirements.

The goal of SaaS testing is to ensure the quality of the SaaS based application by testing data security, integrity, performance, compatibility, and scalability.

This involves testing your cloud-based infrastructure, and making sure you have tools that allow SaaS application performance monitoring.

The purpose of cloud testing is to test the software for functional, as well as non-functional, requirements using cloud computing, which ensures faster availability with scalability and flexibility to save time and cost for software testing.

Now that we’ve discussed how to test SaaS applications, time to move onto the next stage, deploying!

5. Deploying

At this stage of the SaaS product development roadmap, you have developed and thoroughly tested your product. It is time to deploy!

There are some key pieces of information to know before deciding on a SaaS deployment model. Let’s discuss these now.

There are SaaS offerings by major cloud service providers such as Azure, AWS, Alibaba Cloud, Google Cloud, IBM Cloud, and Oracle. If you have a brand new infrastructure and system you can simply sign up for your preferred provider.

A major challenge to building a SaaS platform is when you have to migrate existing IT/application infrastructure from on-premise to cloud—or cloud to cloud.

You will have to migrate to these cloud services and there are multiple types of migrations you must be aware of because any of these could apply to your current scenario:

  • Physical-to-virtual (P2V): This involves the process of decoupling and migrating a physical server's operating system, applications, and data from a physical server to a virtual machine guest hosted on a virtualized platform.
  • Physical-to-cloud (P2C): This refers to moving tools and data from old, legacy infrastructure or on-premises data centers to the cloud.
  • Virtual-to-virtual (V2V): In a V2V migration, an existing virtual machine running on one virtualization platform is copied to a virtual machine running on another virtualization platform.
  • Virtual-to-cloud (V2C): This is when you migrate from a virtual machine to a club-based solution.

The migration most applicable to you will depend on your current infrastructure. After your migration is complete, you are now ready to deploy.

6. Managing/Maintaining

What are the best practices of SaaS application management? Your SaaS product has been deployed and is currently live.

In the operations and maintenance phase, developers watch software for bugs or defects. If they find one, they create a bug report.

During maintenance, it is important to consider opportunities for when the development cycle starts over again.

A sign that this phase is working well is when developers are able to quickly identify and resolve problems.

Your focus should also turn to collecting user feedback and identifying improvements for your current service. This is a mandatory requirement of SaaS, as competitors can replicate your offering and capture market share.


Make gradual improvements to your SaaS application development platform to reduce the time to ship, and improve the flow of releases. You must constantly strive to enhance your offering.

For example, look at the amount of money both Netflix, Disney, and Amazon invest in creating their own original premium content for their streaming services.

These massively successful companies know you must continually provide the best possible service to maintain their customer base.

This stage of the software life cycle is about SaaS application performance management. Time to move onto the final stage: improvements and optimization.

7. Improving/Optimizing

This is the final stage of the SaaS development cycle and involves improving and optimizing your service and SaaS application design to ensure you stay ahead of the competition. Analyze your current processes and compare them against SaaS development best practices.

There are countless reports on how customer success and customer experience are key to growth in the subscription economy.

You will find that optimization can happen on different levels including code, technology, SaaS architecture, people, knowledge, and more.

Optimizing these elements can improve the results of your SaaS based application development process, and, ultimately, your business.

You have to continue to innovate in your particular niche or industry to maintain an advantage over competitors.

SaaS Dev Life Cycle Stage

SaaS Development Team: Who Do You Need and What Skills Do They Each Require?

So you’ve decided to build a SaaS application and have your SaaS application development framework in place, but perhaps you are still unsure of the different types of talent you need to recruit.

We will explain each type of team member you will need, and what stage to hire them at.

SaaS Development Team:

Teams can vary in terms of the types of personnel they include, but there are typical roles you will find at a SaaS software development company or, of course, your own company if you plan to build your own in-house dev team:

Project Manager

The project manager is responsible for day-to-day management of the project and must be competent in managing different aspects of a project, such as scope, schedule, finance, risk, quality, and resources.

Project managers work on specific projects that have definite outcomes, time limits, and requirements to stay within a budget.

You will want to make sure the project manager is one of your first hires, as they will need the background and context of what you are trying to build.

Ideally they will have previous experience in how to build SaaS platforms and may have experience with specialized tools, such as projement management software for SaaS projects.

Business Analyst

Business analysts help guide businesses in improving processes, products, services and software through data analysis.

Business analysts straddle the line between IT and the business to help bridge the gap and improve efficiency. Ideally they’ll have experience with SaaS collaboration tools.

For SaaS products, business analysts can help at the initial planning stage by creating the requirements. They can also be extremely useful in the optimization stage.

Business analysts are excellent at turning user feedback into improvements for your development team to work on, resulting in a better experience for your customers.

UI/UX Designer

UX and UI design are two different elements of a single consumer experience.

A UX designer ensures a product makes sense to the user by creating a path that logically flows from one step to the next. A UI designer ensures each page visually communicates that path.

You would typically hire a UI/UX designer at the design stage of the software development life cycle (SDLC).

A UX expert will be involved with any new features and improvements you would like to introduce to your SaaS platform to ensure your user has the best experience possible.

Backend Developer

Backend development refers to the server-side development. It focuses on databases, scripting, website architecture, and, ideally, SaaS based application architecture.

It contains behind-the-scenes activities that occur when performing any action on a website. It can be an account login or making a purchase from an online store.

Code written by backend developers helps browsers to communicate with your data warehouse and cloud provider.

You backend developers should be hired at the design stage as they will need to be consulted around the design of your backend.

For example, you will need to choose a cloud provider, with the most popular offerings coming from Google, Microsoft, and AWS.

These are questions an experienced backend developer can help you answer, and they can provide a SaaS architecture overview that will highlight the pros and cons of each backend system.

Frontend Developer

A frontend developer links together the world of design with the world of technology, packaging up the utility of the backend in an inviting way for users to interact with.

They take the design files created by your UI/UX designer and convert them into HTML, CSS, and Javascript code, the core languages of frontend development.

They may also use React, Angular, or other frontend libraries, so you may need to hire React developers at some point depending on what you're wanting to achieve long term. Make sure you hire a developer with the right skill set, for example; you wouldn't hire a Javascript developer for a PHP SaaS application.

Hopefully your hire will have previous knowledge of how to develop a SaaS application, considering all aspects of the build.

There are some intricacies that specialized developers might know about SaaS web application architecture that is an obvious advantage.

You won't need to hire a frontend developer until the development stage of the SDLC as that is when the SaaS website development begins.

QA Engineer

A quality assurance engineer focuses on improving software development processes and preventing defects in production.

They create test plans, document bugs, and identify areas for improvement within your application.

You should hire a QA engineer at the testing stage of the SDLC. Even if you are engaging in rapid SaaS development, you should set aside time and money to hire a professional QA engineer to identify the most vulnerable parts of your application.

That concludes our look at the different roles of a SaaS development team structure and how you can set up a team to deliver the best SaaS platform you can.

SaaS Development Team

How Will You Get Your SaaS App Developed?

You may be wondering how to build a SaaS application. Thankfully there are many different options.

Options include hiring a SaaS development company, using SaaS consulting services, or developing the product in-house.

We will look at all of these options so you are well-equipped to start your SaaS product development journey.

In-House:

You can recruit or build a team of developers within your own office, state, or country (either as full-time employees or as contractors).

Having an in-house development team can require more time and money due to time-consuming interviews, onboarding processes, and training. However, it also offers some interesting advantages over outsourcing and remote options.

Let’s examine the pros and cons of in-house development.

Pros of Having In-House App Developers:

  • Developers who are full-time employees will be more motivated to deliver successful products and services for your organization.
  • In-house developers understand the nuances of how your organization runs, along with adhering to your company values.
  • You retain a greater level of control when managing employees compared to hiring overseas.
  • Communicating with employees in the same area is simpler than communication with your overseas resources. In-house developers can respond swiftly and without wasting time or resources.

Cons of Having In-House App Developers:

  • Keeping developers on staff is expensive. Besides salaries, you have to consider benefits, office rents, software licenses, and hardware.
  • Finding good local talent is hard:good developers with experience in building a SaaS application are in high demand and you may find it hard to attract the right people for your development team.
  • Software developers and other technical employees change their job often  and you may have a difficult time retaining talented employees, which could result in delays for your project.
  • The cost of letting employees go can be high, as employees may be entitled to high redundancy payments that you must pay in order to let them go.

Remote Developers:

You can recruit and build a remote team of app developers (either full-time or part-time) to build your SaaS web application.

Finding remote developers has never been easier, with some companies that are dedicated to helping you build a team of remote developers. Let’s discuss the pros and cons of using remote developers for building SaaS applications.

Pros of Hiring Remote App Developers:

  • It's easier to find the right talent.
  • If you’re looking for a very specific tech stack or someone that knows exactly how to create SaaS applications, you have a greater chance of finding a developer who is a specialized SaaS builder.
  • You can choose whether or not to add benefits such as PTO, retirement, bonuses, overtime, and employment training tax.
  • You can provide 24/7 support for your software, leading to a greater level of SaaS application monitoring.
  • With remote developers, it’s possible to have a round-the-clock team, with overlapping schedules or changeover meetings.
  • Remote developers can maximize their time and focus to deliver more work that is of a higher quality.

Cons of Hiring Remote App Developers:

  • You may have to communicate with developers in other time zones.
  • You need to have the right infrastructure in place to support remote work.
  • There is a risk of compromised security and confidentiality.

Outsource:

Another way to build a SaaS application is through outsourcing. This is where you hire an outsourcing company that will handle the entire SaaS delivery, from idea to development to maintenance.

Let’s look at some of the pros and cons of using an outsourcing company for SaaS development services.

Pros of Hiring an Outsource App Development Company:

  • SaaS development costs are agreed from the beginning so there’s no surprises.
  • With outsourcing, you can potentially hire an existing SaaS application development company that specializes in your industry.
  • Having a proven SaaS development agency tackle your project can be one of the most time and cost efficient ways to get your project over the line.
  • While your developers are working on your application, you can fully focus on customer acquisition, the SaaS delivery model, and the eventual launch of your product.

Cons of Hiring an Outsource App Development Company:

  • Issues with communication are commonplace when outsourcing.
  • Most regions you would typically outsource to don’t have native English speakers, which can potentially affect development timeframes.
  • There can be issues with code quality when outsourcing. Communicate your standards and expectations to the SaaS app development company at an early stage.
  • Poor code can severely impact your SaaS development costs.
  • You may run into contract and legal Issues.

This concludes our look at the advantages and disadvantages of outsourcing the work to specialized SaaS development companies.

3 Ways To Get Your SaaS Developed

SaaS App Development Costs

Estimating the development costs of a SaaS product can be extremely difficult. In this section, we'll explain some of the different ways you can capitalize SaaS implementation costs.

SaaS Capital conducts a survey of private, B2B SaaS company metrics in the first quarter of each year. This survey saw over 1,400 SaaS companies respond.

Here are the top-line results expressed as the median percent of annual recurring revenue (ARR) for all companies in the survey:

  • Cost of Goods Sold (excluding Customer Support/Success) = 15%
  • Customer Support/Success = 10%
  • Selling Costs = 20%
  • Marketing Costs (including Product Management) = 10%
  • Research and Development = 25%
  • General and Administrative = 17%

Let’s look at some of these spending categories in greater detail, to see what drives the cost of each.

UX and UI Design (Based on Marketing Research)

Typical UX/UI designer rates can vary by quite a bit. The popular freelancing platform Upwork delivers an estimate of rates between $110 and $270 per hour.

This could include main screens, additional screens, interactions, and profiles. SaaS businesses need their products to have clear and attractive user interfaces.

To create designs and flows that will best serve your needs, designers have to conduct research and use guidelines created during the planning stage, such as target audience descriptions, requirements, list of features, and monetization strategy.

Define the primary goal of design and use best practices to enrich your project.

Don’t forget that your service should be scalable, so it is a good idea to create a design code and define the visual tone or voice of your business. This should be an integral part of your SaaS product development strategy.

Servers

Typical pricing for cloud services can run from $30 to $8,000, depending on the number of users. As the number of customers increases, you should increase your server potential too.

You will also have to spend some time monitoring and optimizing your use of these cloud services. To ensure the reliability of your product, you need to understand how it is performing under different conditions.

Make use of monitoring software that allows you to quickly discover issues, and react to them before they impact your users.

When an alert appears, there should be a programmer available to resolve the issue. This is a service that can also be outsourced.

Development Costs

Development costs depend on lots of factors. The number of features and integrations, design, architecture complexity, target market, and project timelines are the most critical factors.

Other factors include what country the development is taking place in.

In general, a SaaS application development budget has several parts: business analysis, design, programming, servers, software monitoring and maintenance, client support, and promotion.

Outsourcing your SaaS web development is a popular way to reduce costs if you have a limited budget.

Here, we are talking mainly about how to build SaaS applications and start landing your first customers.

Prototype building, MVP development, QA, deployment, and upgrading the product according to user feedback are hard to calculate without knowing the specific SaaS and your product features. The expected size of your audience also matters.

Make sure the developers you hire can deliver on the application you designed. For example, SaaS mobile app development requires a different skill set than SaaS web application development.

Marketing Costs and Customer Acquisition

Finally, there is the marketing strategy. This could be cheap and well-planned, or expensive and blindly expansive.

A general rule is to set aside around 10% of the budget for marketing. Marketing activities include branding, a content marketing campaign, and feedback analysis strategy.

Ideally these strategies will be in place before any development actually takes place.

A typical SaaS company spends 10% of its annual revenue on both customer support, success, and marketing.

This might be interesting to know, but to better benchmark your specific company, it’s important to look at a subset of companies that more closely resemble your own.

This concludes our look at the costs associated with developing a SaaS application. With this information, you can budget more effectively and try to reduce SaaS implementation costs.

Again, price estimation is tricky so use this as a guide as opposed to a rule when you build SaaS applications.

FAQs

How Do You Develop a SaaS Model?

Analyze best practices, figure out how your idea and offering can be delivered through a SaaS model, and put the cloud-based infrastructure in place to do so.

How Do You Design a SaaS Product?

You can look at your competitors who offer a similar service, or hire a SaaS consulting firm that can help you with ideas and bringing your product to life.

How Do You Build a SaaS System?

You can make use of an in-house development team, hire remote developers that have previous experience in creating a SaaS system, or outsource to a company that specializes in SaaS product development services.

How Do You Build a Successful SaaS Product?

Develop a solution for a problem, validate your SaaS idea, and continue to iterate and optimize your offering to stay ahead of the competition.

How Long Does It Take to Develop a Cloud-Based SaaS Application?

This can vary depending on the expertise and knowledge of SaaS that your hired talent has. Hiring a developer that offers specialized SaaS application development services is likely to reduce the overall development time required.

How Much Does It Cost to Develop a SaaS Application?

Estimating software development costs is always difficult. The main drivers of cost for creating a SaaS application are UI/UX design, server costs, development costs, and, finally, marketing and customer acquisition costs.

What Are the Top 3 Most Important Aspects of SaaS?

The 3 most important aspects of SaaS are scalability, continual innovation, and pricing models. If you get these 3 things right, you will have a successful SaaS application.

Final Thoughts

In this post, we have explored all aspects of SaaS development. We fully explained what a software-as-a-service (SaaS) model looks like.

We broke down the potential benefits and drawbacks to consider before you decide to use a SaaS model, or adapt your current software product or service to a SaaS offering.

We covered how to build a team that can deliver a performant SaaS product, and the costs associated with this.

You should now feel more confident about taking your SaaS idea to the next stage!

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