The key to success for SaaS applications is using the latest cloud technology to create an efficient platform. This revolutionary approach seamlessly integrates advanced analytics, allowing businesses to develop a SaaS application and improve operations effectively.
The user-centric design and flexible architecture provide unbeatable flexibility to various industries. It’s a transformative solution that allows organizations to construct, refine, and implement your SaaS platform.
At AddWeb, we specialize in SaaS application development and boast a talented pool of software developers who can create creative solutions. Our team excels at using modern technology to build SaaS applications tailored explicitly to business-specific needs in various sectors.
This blog will cover the essential elements for developing a SaaS application, from the initial design phase to deployment strategies. At the end of this blog, you’ll learn how to harness the power of technology and talent effectively when developing new SaaS options for your company.
Let’s dive!
What is SaaS?
SaaS (Software as a Service) is a cloud-based service that delivers ready-made software to customers via mobile applications and browsers. The user does not have to purchase the software to download it to their computer. Most customers subscribe to software on a pay-as-you-go basis, typically with a monthly or annual subscription cost. The user does not need to maintain the software because it is constantly updated with new features and security updates. With this service, users do not need to download or set up the software since the software company will handle it.
Latest Trends and Analytics of SaaS Application Development
SaaS has been a game changer for many companies. Every business owner, whether traditional accounting companies or tech industry giants, is on the cusp of embracing SaaS. Therefore, the need for SaaS products has grown and shifted over time.
However, running a profitable SaaS business is more challenging than you might think, even though it can reap many SaaS advantages over a typical delivery system.
The following statistics and data illustrate the reasons why many companies use SaaS. SaaS method to reap advantage in competition.
- By 2028, the SaaS market is expected to grow to $2,34,900 million.
- The report by Statista states that companies worldwide utilize an average of around 100 SaaS applications.
- According to Statista, the global cloud applications market was estimated to be worth $133.6 billion as of 2021. This is projected to grow to $168.6 billion in 2025.
- According to Report Linker, the CAGR (Compound Annual Growth Rate) for the cloud computing market will be 16.3 percent between 2021 and 2026.
- The Deloitte study revealed that 70% of CIOs have aspired to cloud-based SaaS due to its agility and scale. 38% of businesses are adopting cloud-based technology to aid in disaster recovery. To increase the flexibility of cloud computing, 37% of enterprises are switching to cloud-based computing.
- The usage of SaaS is growing and widespread, as are the companies. A typical company employing more than 250 employees utilizes over 100 SaaS applications. Around 25-50 SaaS applications are used by businesses with less than or equal to 50 employees.
- The SWZD report states that the organization will spend most of its SaaS budget on operating systems, 10% on security software, and 10% on productivity based on its SaaS pricing structure.
As a highly regarded and leading SaaS software development company, we can say that SaaS will continue to grow in the years ahead—from the above information and figures. Therefore, companies that are implementing SaaS models and methods are expected to expand.
How to Build a SaaS Application?
Making a cloud-based SaaS application is an orderly sequence of steps necessary to build an efficient, reliable, and easily easy-to-use product. Here is a step-by-step guide for this procedure:
Idea Validation and Market Research
Start by verifying the validity of your SaaS idea. Perform market analysis to determine the intended market, understand their needs, and assess your competitors.
Define Your Business Model
Develop your business’s strategy for earning revenue and attracting customers. Choose whether to provide a freemium service, subscription tiers, or a one-time payment.
Plan Your SaaS Application
Then, define your app’s functions and features, evaluating them based on the insights of your market analysis and the primary benefit your product provides.
Pick Your Technology Stack
Select the right technology that can be used for front and backend databases and other vital components. Consider factors such as scalability, reliability, and the accessibility of developers.
Design the User Experience (UX) and User Interface (UI)
Regarding SaaS design, emphasis is placed on providing user-friendliness, simplicity, and accessibility. Create wireframes and prototypes that trace the user’s experience and sketch the user interface. Be aware that mobile-first SaaS is among the most powerful SaaS trends in 2024’s programming.
Develop the SaaS Application
Start developing your application by focusing on the features and layout you plan to add. Use agile methodologies to create, test, and improve your application.
Ensure Security and Compliance
Install strong security measures to safeguard users’ personal data. At the beginning, make sure your application is compliant with applicable laws (e.g., GDPR or HIPAA).
Test Your Application
Perform thorough testing, including evaluations of the cloud’s performance, functionality, and security, as well as testing of user acceptability (UAT), to find and fix any issues.
Deploy Your Application
Select a reliable cloud service provider to host the SaaS application. Set up your application and observe its performance.
Launch and Market Your SaaS Product
Preparations for the launch include a marketing plan that includes SEO and content marketing, social media, and email campaigns to attract customers.
Gather Feedback and Iterate
Following the launch, be proactive in gathering user feedback through surveys, usability testing, and other data. Utilize this information to make an informed update and enhancements to your service.
Continuous Improvement and Scaling
Keep your application updated with the latest features and enhancements based on user feedback and market developments. As the number of users increases, plan to expand your infrastructure.
The steps listed below will help you navigate the complicated process of creating a SaaS application, from concept to launch, to ensure that the product meets your customers’ requirements and stands out in the marketplace.
Benefits of Developing SaaS Applications
The development of SaaS applications has many benefits which directly affect your business’s expansion and growth.
Here are a few of the main advantages of creating SaaS applications:
Accelerated Time-to-Market
The modern consumer has high expectations, and the majority aren’t afraid to explore choices if their expectations aren’t met. In fact, 58% of customers said they changed brands in the last year because the brand they chose offered higher-quality products.
SaaS development allows your company to introduce new features continuously through shorter deployment and development times. It also allows your company to respond quickly to market trends and stay ahead of competitors.
Simplified Maintenance and Updates
SaaS development platforms manage updates to software and security updates along with infrastructure and maintenance, easing the burdens for in-house IT staff. Your IT professionals can concentrate on strategic initiatives and the core skills driving your business’s growth.
With frequent updates and improvements this SaaS supplier provides, your apps stay secure and up-to-date, and you’ll provide better and more reliable services for your customers.
Scalability for Business Growth
The ability to scale SaaS applications is essential as your company grows.
SaaS software solutions are usually installed on elastic cloud infrastructures, which allows for more efficient handling of increasing user demand. You can increase the capacity of your resources, deal with changes in traffic patterns, and ensure maximum performance in peak hours.
Predictable Revenue Stream
SaaS is a highly attractive business model because it generates an annual and reliable revenue stream. Customers sign in for monthly or annual plans to access your service, which allows you to create accurate forecasts and make educated choices. This is in contrast to traditional business models, which are often characterized by unpredictable cash flows.
Cost Efficiency and Resource Optimization
SaaS applications are an affordable method of software management. The absence of expensive infrastructure and hardware investments allows you to use resources strategically and redirect them toward core business tasks. The predictable expenditure model can be used to budget efficiently and improve financial outcomes.
SaaS Development Challenges you need to Know
Companies are increasingly seeking SaaS initiatives. CRM software, ERP applications, software for project management, marketing via email vertical applications, collaboration software, and more. Based on the knowledge we have gained during my work in SaaS projects, we’ve developed the most challenging SaaS development challenges to be tackled in the course of development, no matter what SaaS solution you choose to pursue:
Secure and well-defined Database Access In Compliance with GDPR
With GDPR sweeping the globe and tenant protection standard security, secured database designs are essential to an effective SaaS product. Additionally, when it comes to projects for American customers, There are specific methods (like the medical industry) that require us to be able to follow extra steps to implement and then apply the HIPAA limitations to the system, which ensures that patient data does not get out of the system’s boundaries. It is recommended that the GDPR and HIPAA requirements must be defined and implemented at the beginning phase of the system.
During the system creation process, test suites for integration and unit have been in place to enforce the data access restriction. To ensure that data is stored persistently, we employ PostgreSQL, MySQL, and Elastic Search for analysis, visualization, and reliable search results, Neo4j and MongoDB for managing databases, and Redis, which is used as a messaging broker, database broker, and cache.
Customizable System
Most importantly, the system should be completely customizable at the user interface and continue to the system layer. Our customer or the product’s owner will always determine the design and customization. We have encountered situations when modifying a subdomain’s layout, color templates, and much more for each tenant individually was necessary. This can be daunting; however, if planned and handled in a streamlined and efficient way, it can benefit the system over time.
Guaranteeing Zero-Downtime Deployment
Significant emphasis is placed on system accessibility. One issue we experience from time to time is when the system isn’t accessible to all users, even when the latest version of the system is released. A development team could tackle this issue with the zero-downtime strategy for deployment. This means that during the deployment process, the application is completely responsive and continues to be so. In conventional systems, the application informs users of scheduled downtime.
The blue-green deployment approach assures a near-zero downtime deployment, solidifying SaaS solutions.
Custom Third-Party Payment Integration
Payment functionality is a crucial component of the SaaS product. It is usually achieved by integrating a system with an external payment provider. Integration is directed towards the straightforward approach and the more difficult one. The simple is a payment system that has excellent integration support. On the other hand, the more complex it is, the more difficult it is for the development team to look at the technical issues and difficulties that arise from integrating payments and design the right application components like facades and services for integrating the payment service from outside effortlessly.
The standard payment services offer the necessary libraries for integration. These include PayPal, Secure Trading, QuickPay, Skrill, and Braintree, which we have implemented in various projects.
It is important that the development team develops automated and manual tests to verify that the payment integration is working effectively.
Managing SaaS Subscription Lifecycle
One method to manage SaaS subscriptions and plans is to use an existing solution. Sometimes, the solution may already be connected to a payment system like Stripe. Stripe provides a straightforward method to manage these two aspects in conjunction with payments by revealing its API to be utilized in its SaaS system. It is well-documented and comes with many examples, putting developers at ease working with the API. It is still feasible for the SaaS product owner to integrate into the SaaS platform’s subscriptions and plan management.
The benefit of this strategy is that you put it all in one location, not be dependent on an external provider, and pay a single amount for the development of this service instead of having to pay each month or annually to manage this aspect that an external provider provides.
The most efficient way to manage subscriptions is to use already-built, ready-to-use software to plan and manage subscriptions and payments. A SaaS subscription’s lifecycle comprises trailing and subscribing as well as changing, canceling, and renewing. Properly managing each step of the process is crucial in the seamless integration of payment systems with SaaS.
Cost to Build a SaaS Application: How It Is Estimated
The SaaS application development process includes a variety of phases. Each one affects the price to create the SaaS product. Let’s take a look at each crucial stage and how it affects the overall SaaS development estimates:
Discovery Phase
The Discovery phase aims to develop a plan for a successful SaaS system implementation. It involves gathering data regarding your company, analyzing requirements, and determining the project’s scope. This is a crucial step if you intend to establish a SaaS company with success. Product Discovery Phase services usually last up to three weeks. To calculate costs for this stage, multiply the total number of hours (40-120) times the daily wages of an expert. The expected price is $1,600 to $4,800 plus.
An estimate of the rough costs provides clients with the expected cost and development steps. It is revised twice: the first version is created following the Solution Design Workshop and the second following an initial Discovery Phase. The second edition incorporates updated specifications and team composition, which results in a more precise evaluation.
A thorough estimate is a collaboration between developers in direct contact and is built on extensive documentation and specifications from the Discovery Phase. It is a highly precise cost estimate constructed during the development phase, taking into account various aspects and including the specific specifications for each sprint or two. This guarantees meticulous planning and transparency in project management.
UI/UX Design
At this point, UI/UX designers are focused on creating a simple and user-friendly interface for customized SaaS solutions that promotes participation and makes it easier for users to interact with the platform frequently. They carefully create a SaaS application’s design for each component, including navigation menus and interactive elements, to ensure an enjoyable and seamless user experience. In addition, the design team begins with a SaaS design with user research and testing to collect information about users’ patterns and preferences and then refine the design to ensure the user experience.
The price of UX/UI design services for SaaS is contingent upon the project’s complexity, the scope of work, and the amount of customization required. Prices can vary from $5,000 to $50,000 or greater, with more complicated projects costing more due to the extra time and knowledge needed to develop custom and practical designs.
SaaS Development and the QA
SaaS solutions integrate a range of libraries, frameworks, and development tools inside their intricate structure, which encompasses back-end and front-end development. From a practical standpoint, SaaS components can be created by outsourcing to a third-party service. For instance, many SaaS companies depend on third-party providers to host and maintain their services.
Around two SaaS developers can make an MVP in just three months, a minimal price for creating a SaaS platform of more than $30,000. Be aware of the costs of quality assurance services, which are the most important aspect of customized SaaS development services required for a SaaS product. They can vary between $5,000 and $20,000+.
Launch and Maintenance
Maintenance and support are essential aspects of SaaS application costs. The monthly expense for maintenance and upgrades performed by a small group consisting of designers, developers, and quality assurance experts can vary from $10,000 to $20,000.
Operations must align with project specifications and security standards, service-level agreements, and the common cloud infrastructure. Start sales and marketing campaigns with efficiency when launching your SaaS solution. Update, refresh, and improve services regularly. Developers should implement updates with non-downtime deployments to ensure constant availability and prevent fragmentation. Post-release costs may also comprise SaaS product marketing costs, depending on the marketing strategy you choose to implement.
Estimating the cost average to build a SaaS product
- Discovery phase: $1,600 – $4,800+
- UI/UX design: $5,000-$50,000+
- Development: $30,000-$40,000+
- Services in QA: $5,000-$20,000+
- Maintenance: $10,000-$20,000+
- Hosting: $1,000-$10,000+
- Total cost: $55,600 – $145,800
Factors Impacting the SaaS Development Cost
In developing a SaaS application, realizing that the price is more than a mere number is crucial. We’ll now dive into the primary elements contributing to creating SaaS development costs.
Product Complexity and Work Scope
The size and complexity of the SaaS project play a significant influence on its price. Projects with complex features (involving large user processes or large-scale implementations) generally require more resources, time, and experience, which can result in higher development costs.
The complexity of the features of your SaaS application could range from simple to complicated depending on the features you wish to add to the app (e.g., integration with payment gateways, a custom interface for apps, or automated email notifications) and significantly affecting the price associated with SaaS design and implementation. The SaaS application development process is influenced by the number of customers you plan to reach and the variety of products or services you wish to offer.
According to our SaaS software development experience, we broke the complexity of the Software-as-a-Service applications into four levels, giving a rough cost of building a SaaS product to each of them:
- Micro SaaS development costs could range between $10,000 and $25,000+
- The estimated cost for a SaaS app at the base level could vary between $25,000 and $50,000.
- The average SaaS software price will be between $50,000 and $150,000+
- The more complex SaaS application could cost between $150,000 and $500,000+
Please note that the rates listed are approximate and subject to change. To estimate the price of your SaaS idea, please contact us and speak with our business development manager.
SaaS App Type
The kind of SaaS application you plan to develop significantly impacts the complexity of creating a SaaS application and the SaaS initial cost. It is simple and requires less effort and money because of its basic features and various integrations. However, creating an intricate solution suited to specific business or industry needs that include a complex technology stack, numerous features, and integrations is more expensive, which could be much more costly. Examples:
- Custom CRM development may cost $30,000 – $150,000+
- The development of a website for e-commerce could cost anything between $40,000 and $200,000+
- The ERP software development costs could vary between $50,000 and $ 250,000.
- Human Resources Management software development costs from $25,000 up to $120,000+
Understanding the unique requirements and complexities of the various types of software is essential to accurately estimating the price associated with SaaS software development. Similar to website maintenance, the monthly average of website maintenance charges can vary based on the complexity and size of your site. However, taking into account these ongoing costs in the planning phase will allow you to create an appropriate budget.
Functionality Set
The amount and complexity of the features largely determine the cost of creating the SaaS platform. For example, adding advanced features, customizations, or integrations with other services may make developing the time and resources needed more challenging, increasing the overall cost. It is recommended that the concept of Minimum Viable Products (MVP) be looked into to help keep the costs of SaaS software development lower. This means creating an app with essential features that will test its potential on the market. Here’s an estimate for developing a SaaS MVP product:
- Simple SaaS MVP: $25,000 – $50,000
- Medium-complex SaaS app MVP The range of prices is $50,000 to $150,000.
- Complex SaaS MVP: $150,000 – $300,000+
Creating a SaaS MVP successfully reduces cost and gathers early feedback from users because it focuses on the most important functions and integration. The essential features you must have for a typical SaaS app are listed below to be considered.
UI/UX Design
The UI and UX design of your SaaS solution are crucial to the success of your product. If appropriately designed, it will enhance the user experience by providing an effective user experience and cutting down on customer churn. This is how the design of UI/UX influences the costs of creating a SaaS platform:
- Basic SaaS application design: includes the most basic UI elements and a few customized features. Depending on the application’s dimensions and the number of screens, the cost can vary between $5,000 and $15,000.
- Design with moderate complexity: This incorporates a more sophisticated user interface, with added features and capabilities for user experience. The cost can vary between $15,000 and $40,000, depending on the number of screens and the level of design details.
- Complex design: requires the highest amount of detail, unique user elements, and a complex user experience. The cost of developing this kind of design can begin at around $40,000 but go over $100k, particularly if every screen or interface element must be redesigned.
Cooperation Model
The model of cooperation you choose determines the cost. The most frequently used software development models are outsourcing and outstaffing, each with distinct costs and project management advantages.
Outsourcing for SaaS development is employing a software development company not associated with your company. This allows you to lower internal development costs and scale resources flexibly.
Staffing out in SaaS development requires recruiting remote team members via an outsourcing service. They make up your team but are managed and contracted by an outside company. It helps you reduce expenses by cutting down on office space and equipment costs.
Team Location
The location of the development team’s office can influence the price of creating a SaaS platform because of variations in rates of work and overhead costs. In addition, if you’re employing a SaaS outsourcing provider for development, be aware that each IT outsourcing provider offers its pricing for software development services.
Below, we provide the average hourly wage for IT specialists across different regions.
The most popular outsourcing areas and their hourly wage
- Central/North Europe: $50-$70
- Western Europe: $75-$150
- North America: $100-$200
- Asia: $20-$40
- Africa: $20-$45
Team Composition
The size and structure of your team could impact the SaaS cost of software development. When you’re working with a bigger team, it could cost more as there’s likely to be more meetings and interactions among team members. However, smaller teams could be more economical if you don’t require more resources to complete the task.
The team that is responsible for the team responsible for SaaS product development could comprise the following experts:
- Project manager will supervise and coordinate the project
- Business analyst gathers requirements and transforms these into specifications for technical use
- Solutions architect for managing the infrastructure of databases
- UX/UI designer creates UX/UI design and user user experience
- Developers who build component components for the client and manage server-side development
- QA engineer to carry out testing and guarantee the quality
- DevOps engineer manages deployment and infrastructure
Keep in mind that this is only part of the complete staffing structure to be used for the SaaS application development initiative. The amount of specialists and other roles could differ based on the complexity of the project, its scale functionality, and business needs.
Technology Stack and Integrations
The tech stack also influences the price of building SaaS products. Certain frameworks or technologies may require particular expertise, licensing fees, and extra development time.
Furthermore, you must know that integrating the SaaS application with third-party services or developing APIs to integrate with other systems could increase the development cost. The complexity and the number of integrations needed affect the effort and resources required.
Be aware that the entire tech stack and list of integrations will depend on the specific project’s requirements. To help you with your work, you can rely on assistance from an IT vendor. They can assist you in selecting the most appropriate technology stack to support the SaaS product.
Security and Compliance
SaaS applications are a prime target for hackers because of the sensitive data of users they store. Risks, like security breaches, malware attacks, and leaks, could result in devastating reputational and financial damages. Infractions to security and privacy laws could result in significant penalties. In the long run, addressing security issues will be costly and time-consuming, while lacking customer trust reduces your chances of success.
Integrating strong security measures into product development is crucial for protecting sensitive data and ensuring compliance with industry standards. Implementing features like two-factor authentication, access control based on role, and field-level encryption provides an additional layer of security on the platform, protecting against the possibility of unauthorized access to data and breaches.
While security measures can add costs to the initial development, they will ultimately lead to long-term cost savings as they shield against security risks and regulatory fines. Therefore, making security investments early will result in higher overall effectiveness and peace of mind for both the business and its customers.
Conclusion
Knowing how to create a SaaS application is an excellent chance for companies to simplify processes, increase customer satisfaction, and remain ahead of the curve in today’s competitive digital environment. With the benefits of scalability, accessibility, and cost-effectiveness, investing in SaaS product development can bring long-term rewards, promoting growth and innovation while adjusting to the changing SaaS market requirements.
AddWeb is a trusted partner for building a SaaS application that leverages our knowledge and experience in providing innovative, efficient, scalable cloud-based software tailored specifically to the SaaS commercial model.
