The software-as-a-service (SaaS) industry has been a transformative force in the tech world, with popular products like Google Workspace, Microsoft Teams, Slack, Zoom, HubSpot, and others revolutionizing how businesses operate, communicate, and manage tasks. According to Gartner, the projected end-user spending of $208 billion by 2023 reflects the SaaS product development market’s significant growth and revenue potential. This has attracted not only startups and small businesses but also larger enterprises looking to incorporate SaaS and split their monolithic applications. 

Given the promising outlook of SaaS product development, businesses of all sizes are eager to tap into the market and capitalize on its opportunities. This comprehensive guide aims to provide businesses, startups, SMEs, and enterprises with valuable insights into SaaS application development and market entry. It covers various aspects, including market advantages, challenges, development processes, best practices for developing SaaS products, and more, to equip you with the knowledge needed to succeed in the SaaS industry.

What is SaaS Product Development? 

It is the process of creating and launching software-as-a-service applications designed for users who can access it over the Internet without the need to host or maintain the software on their own servers. In other words, it’s about building software delivered as a service, with all the technical complexities taken care of by the development team, so businesses and end-users can simply access and use the software through a web browser. 

SaaS products can be best understood through an example. Consider Outlook, which is a widely used email service. However, individual users do not host the email server; Microsoft hosts it. Users simply access it over the internet via their web browsers. This illustrates the basic concept of SaaS, where the application’s host or owner maintains the product while users pay to access it based on usage. 

SaaS product development involves various stages, including conceptualization, design, coding, testing, and deployment, focusing on creating a user-friendly interface, robust functionality, and seamless performance. Moreover, this journey will make you explore multiple advanced web technologies if you hire professional SaaS development services. When you take this essential step, you will also achieve software solutions that meet your target audience’s unique needs and offer value-added features. 

Moving on from the basics, the dynamic nature of the SaaS market makes developing SaaS products particularly interesting. There is a constant evolution of customer demands, competition, and technological advancements. Successful SaaS application development involves everything from understanding customer pain points, conducting market research, and developing a minimum viable product (MVP) to continuously improving the software to meet changing customer needs. Therefore, you must brace yourself with a forward-thinking approach, adaptability, and agility to stay ahead in the competitive landscape.

Whether you’re new or experienced in the SaaS ecosystem, partnering with a professional SaaS product development company to create innovative and scalable solutions that offer your target audience convenience, cost-effectiveness, and flexibility is recommended. Selecting an adept team like us will open new business opportunities for you to cater to global markets, drive customer engagement, and generate recurring revenue through subscription-based pricing models. What’s even more valuable when you hire SaaS or any other product development services is that you will be able to pay attention to your primary business goals, leaving your development responsibilities to us. Having said that, let’s examine why you need SaaS product development in detail.

Is the Web and SaaS Product Development Process Different?

While web development and SaaS product development share some similarities, such as using web technologies and delivering applications through web browsers, they are distinct in their purposes, delivery models, and additional considerations involved in developing software as a service. 

Web development refers to the process of creating websites or web applications that users access through web browsers over the internet. It involves designing, coding, and testing web-based technologies such as HTML, CSS, JavaScript, and other web programming languages to create web pages or web applications.

On the other hand, SaaS product development refers to creating software applications hosted on cloud servers and delivered to users over the internet as a service. Users access SaaS products through web browsers, but they are more comprehensive than traditional web applications as they offer multi-tenancy, scalability, and subscription-based pricing features. 

While web development may involve creating websites or web applications for various purposes, including e-commerce, information dissemination, or social networking, SaaS product development focuses on creating software applications hosted on the cloud and delivered as a service to users.

Moreover, SaaS application development also involves additional data security, scalability, and subscription management considerations. Multiple customers (or tenants) who use SaaS products share the same application instance. In contrast, web development may not necessarily have these considerations, as web applications can be standalone or targeted to a single user or organization. 

Key Features of SaaS Product Development 

Several benefits of SaaS product development become compelling reasons why your business needs it. Some of them are: 

Multi-tenancy Architecture

It is an approach SaaS product development companies swear by. The architecture enables businesses to serve multiple customers or tenants from a single codebase and infrastructure. The multi-tenancy infrastructure allows for cost-effective scalability and maintenance in SaaS apps. When you implement a SaaS product according to your specific business needs, you will enable all tenants to apply global updates and improvements seamlessly. 

Cost-effective Scalability

The fact that there is a single codebase and infrastructure allows for cost-effective scalability. As the number of users or tenants increases, SaaS applications can easily handle the increased demand without significant investment in additional hardware or software resources. 

Faster time-to-market

SaaS product development typically follows an agile development approach, allowing for more rapid iterations and releases. Implementing it will enable your business to quickly bring your products to market, gain a competitive edge, and generate revenue without waiting too much.

Accessible and Convenient Usage

SaaS products are accessed through web browsers, eliminating customers needing to install and maintain software locally. Therefore, they are easily accessible from any device with an internet connection, providing convenience and flexibility for users to access and use the software from anywhere, at any time.

Automatic Updates and Maintenance

SaaS product development services involve continuous updating and maintenance, ensuring customers always use the latest product version with the most up-to-date features and security patches. So, you will not have to wrap your head around the burden of manual updates and maintenance. This will leave you with more time to focus on your core competencies.

Customizable Configurations

SaaS products often provide customizable configurations allowing customers to tailor the software to their needs and requirements. The flexibility with on-demand software will allow you to adapt it to your unique workflows and processes. Ultimately, it will also enhance your operational efficiency and productivity.

Lower Upfront Costs

SaaS products follow a subscription-based pricing model, where customers pay a recurring fee to access and use the software. With this type of cost estimation, you do not have to invest heavily in upfront costs for software licenses, infrastructure, and hardware. Moreover, regardless of your business size, adopting SaaS development might prove to be affordable and accessible. 

Integrated Analytics and Reporting

Web-hosted software typically includes built-in analytics and reporting features that provide insights into product usage, performance, and customer behavior. They will allow your business to track and measure the success of your product, make data-driven decisions, and continuously improve the software to meet user needs. 

Enhanced Security and Compliance

Most SaaS products have integral security measures to protect customer data, including encryption, authentication, and authorization. Additionally, a reliable SaaS development company complies with industry standards and regulations, such as GDPR, HIPAA, and PCI-DSS, ensuring data privacy and compliance for your business and targetted user base. 

Customer Support and Service

SaaS products can be leveraged to offer customers all support to assist users with technical issues and questions. This makes them highly efficient and reliable, minimizing downtime and ensuring a positive customer experience.

If you analyze the above given SaaS product development features properly, you will understand that you do not need any special equipment for the process. All you need is a reliable development partner like us that provides your business with a cost-effective, accessible, and convenient way to execute software solutions.

Types of SaaS Products/Applications

SaaS product development has the potential to cater to various purposes and industries. To understand this better, read these common types of SaaS applications:

SaaS Customer Relationship Management (CRM)

Customer Relationship Management (CRM) systems like Salesforce and HubSpot handle customer data and operations effectively. These systems are well-suited for eCommerce enterprises operating in both the business-to-business (B2B) and business-to-consumer (B2C) sectors.

SaaS Human Resources Management (HRM)

This type of SaaS product development manages human resources processes, such as employee onboarding, payroll, benefits administration, and performance management. Examples include Workday, BambooHR, and Zenefits. 

SaaS Enterprise Resource Planning (ERP)

Want cutting-edge enterprise solutions? Go for SaaS. ERP software can provide your business with integrated tools for managing various operations, including finance, accounting, supply chain, and inventory management. Some popular ERP applications are NetSuite, SAP, and Oracle Cloud ERP.

Project Management

Applications for project management help businesses plan, organize, and manage projects, including task management, collaboration, and project tracking. Asana, Trello, and Microsoft Project are a few famous names you can consider for inspiration.

Communication and Collaboration

Software for communication and collaboration with the integration of features email, messaging, file sharing, and video conferencing fosters team cooperation. In the current digitally active scenario, almost every office relies on collaborative applications like Microsoft Teams, Slack, or Google Workspace for team collaboration.

SaaS E-commerce

Want to launch a customizable online store quickly? Partner with a SaaS development company for an integrated deployment approach. E-commerce apps enable businesses to sell products or services online, including online stores, payment processing, and order management. Moreover, Shopify, WooCommerce, and BigCommerce’s success speak on behalf of the benefits of developing SaaS products for ecommerce.

Marketing Automation

Marketing demands the best of digital transformation services. SaaS products are a perfect choice to automate marketing processes, such as email marketing, social media management, and analytics, to help businesses streamline their marketing efforts. Examples include Marketo, Mailchimp, and HubSpot Marketing Hub.

SaaS Customer Support and Helpdesk

SaaS product development for customer support provides tools to manage requests, inquiries, and tickets, including ticketing systems, knowledge bases, and live chat. You can see examples like Zendesk, Freshdesk, and Intercom to understand how SaaS can refine customer support.

These are just some examples of the types of SaaS product development options available in the market. But whether it is ecommerce or custom enterprise software development, start your journey with us in this SaaS landscape that continues to evolve with new applications and functionalities.

Important Aspects to Consider Before You Create a SaaS Application

Developing a SaaS product can be a complex process that requires careful consideration of various aspects to ensure its success in the competitive market. Before embarking on SaaS product development, it is essential to thoroughly plan and strategize to ensure that you are building a product that meets the needs of your target audience and is viable in the long run. So, consider the following aspects before initiating the actual product development:

Achieving Market Fit

Before diving into SaaS application development, it’s crucial to ensure that your product aligns with the expectations of your target customers. Conducting a thorough market analysis, such as assessing user personas, conducting surveys, and more beforehand, allows you to set realistic expectations and tailor your development approach accordingly.

Database Management

A robust, flexible, and secure database is crucial for your SaaS product, but ensure you choose the one tailored to your business needs. Consider and plan accordingly for factors such as data type, scalability, expected load, read-to-write ratio, programming language, and budget should be considered when choosing the appropriate database type.

Scalability Planning

Scalability should be a consideration from the outset of your SaaS product development process. Your software should be able to scale vertically (i.e., have room to integrate your business-specific needs) and horizontally (i.e., cater to multiple businesses irrespective of their industry) to accommodate your users’ growing expectations and needs. Building your SaaS application with scalability projections in mind will ensure smooth expansion in the future.

Regular Updates

Frequent updates based on user feedback are essential to keep your SaaS solution relevant and competitive in the market. Therefore, never get out of touch with regular updates based on user reviews.

Third-Party Integrations

Integrating your SaaS application with third-party apps can add value and enhance the user experience, improving your product’s overall functionality and appeal. So, whenever you can secure third-party integrations, try to grab that opportunity and gain an edge against your competitors.

Focus on Service Excellence

Successful SaaS projects not only focus on developing a great product but also prioritize delivering excellent service. Therefore, try listening and comprehending the changing needs of your customers and ensuring their satisfaction throughout their user journey.

Offering Flexible Pricing Packages

Different subscription options make your SaaS pricing model more flexible and appealing to a wider range of clients. It also allows users to adjust their subscription based on their budget, allowing them to continue using your SaaS by shifting to a bigger or smaller package as needed.

The Process of Developing a SaaS Product

When we talk about the core process, it is a systematic approach followed by a SaaS product development company or a team to create and launch the app. It typically involves several stages or phases encompassing the entire product development lifecycle. You can either develop SaaS products from scratch or integrate the model into your existing product. Here is an overview of how to develop a SaaS product either way: 

Steps to develop a SaaS product from scratch:

This process involves multi-steps that require careful planning, strategic execution, and continuous iteration. Here’s a how to develop a SaaS product from scratch in three phases:

Planning

The initial stage of product development involves careful planning, envisioning the product, generating ideas, and conducting research. Here are the steps involved in this process:

Ideate and Conceptualize: The first step is to identify a market problem or need in the market that your SaaS app can address. Conduct thorough market research, gather feedback from potential users, and refine your idea into a viable concept. 

Market Validation: Validate your idea of Saas product development by conducting market validation tests to determine market demands. Discuss creating a minimum viable product (MVP) with a reliable vendor like us to gather user feedback, analyze competitors, and assess market trends.

Define Product Requirements: Once you have validated your idea, define the product requirements. Create a detailed specification outlining your SaaS application’s features, functionalities, and user experience. Doing this will set a blueprint for the entire development process.

Selection

The Selection Stage in your product development involves crucial choices that determine the future of your SaaS product, including selecting the technology stack, development team, development methodologies, cloud provider, and pricing & delivery model.

Technology Stack: Choose the technologies and frameworks for back-end, front-end, and full-stack development.  

You must know some of these popular SaaS product development frameworks that your vendor might select-  

• ReactJS- It’s an open-source front-end library for building intuitive user interfaces and experiences in SaaS applications, known for reusable components and enhanced performance. 
• Angular- This is a widely used frontend framework developed by Google. It offers advanced development tools like TypeScript, HTML, CSS, and more, with features such as reusable components, two-way data binding, and MVC architecture. 
• Vue.js- A lightweight JavaScript framework for single-view applications featuring dynamic HTML extensions, real-time DOM changes, code reusability, and direct integration, often used for building diverse types of SaaS applications. 
• Express.js- This is a popular backend framework based on Node.js, used for building REST-API-based backend applications, trusted by major companies like IBM and Uber. 
• Laravel- It’s a PHP framework with object-relational mapping for easy data access and manipulation, including a vast library of pre-programmed functionalities and an advanced toolkit for faster development, commonly used for building SaaS products. 
• Django- This is a Python framework used for creating SaaS products. It is known for clean designs, ready-made user interfaces, supportive administrative protocols, and end-to-end application testing capabilities.

Moving on to the tech stack, these are a combination of technology frameworks that work well together to enable the development of a robust SaaS application. Your chosen SaaS development service provider may incorporate one or more technologies from the following options:

• Frontend Development- The primary components for frontend development encompass HTML, CSS, and JavaScript. 
• Frontend Frameworks- These encompass various frameworks such as ReactJS, Angular, Vue, Bootstrap, and more. 

• Backend Frameworks- These include frameworks like Ruby on Rails, Django, Laravel, Flask, and others. 
• Backend Programming Languages- Multiple programming languages are available, including Python, PHP, C++, and more. 
• Servers- You can choose from Apache, Nginx, DigitalOcean, and others. 
• Databases- Popular databases to consider are MongoDB, MySQL, PostgreSQL, and others.

Development Team: Consult a development team responsible for your product’s groundwork, coding, and testing. You can hire remote developers for this step. If you have to build an entire team for SaaS app development, refer to the later section of the blog. 

Development Methodologies: Assess different methodologies before selecting the right one for your SaaS product. You can consider these top SaaS app development methodologies for your project:

• Agile Development- It’s an iterative and collaborative approach that focuses on flexibility and adaptability, involving regular communication, frequent iterations, and continuous feedback from customers or stakeholders. 
• DevOps- This is a set of practices that combines software development and operations to achieve faster and more efficient software delivery, involving automation, collaboration, and continuous integration, deployment, and monitoring. 
• Lean Development- It’s a methodology that focuses on eliminating waste and maximizing value, emphasizing a customer-centric approach, continuous improvement, and delivering the minimum viable product (MVP) early on. 
• Design Thinking. This problem-solving approach emphasizes understanding user needs and preferences, empathizing with users, defining the problem, ideating solutions, prototyping, and testing with users to iteratively refine the product. 
• Waterfall- It’s a traditional and linear approach to software development where each phase is completed sequentially, with a structured and formal process that requires detailed upfront planning and documentation. 
• Scrum- This popular Agile framework emphasizes teamwork, accountability, and iterative progress, with defined roles, ceremonies, and artifacts for managing complex software development projects.

Cloud Provider: Choose a cloud provider based on scalability, discoverability, economic feasibility, reachability, and supportability parameters. Consider contacting our experts to learn more about cloud provider selection.

Pricing & Delivery Model: Make crucial choices on pricing and subscription models to monetize your software and consider how the delivery model impacts the development process. Here are some of the popular SaaS pricing models to consider:

• Subscription-based Model- If you employ this, your customers will pay a recurring fee to access the software. It allows for predictable revenue streams and flexible pricing plans based on features or usage. 
• Usage-based Model- Using this, you charge customers based on actual software usage, making it scalable and suitable for projects with variable or unpredictable usage patterns. 
• Freemium Model- This model offers a free basic version of the software with limited features. It provides a premium model at a cost, encouraging customers to upgrade for enhanced capabilities. 
• Custom Pricing Model- Custom quotes or pricing plans are usually for individual customers based on factors such as customization, integration, or support services. Mostly, large or enterprise-level projects with unique requirements use this pricing model. 
• Agile Delivery Model- This pricing model involves delivering the software in small increments or releases, allowing for frequent customer feedback and continuous improvement, suitable for projects that require flexibility, fast time-to-market, and regular updates or enhancements.

Development

Once you have gathered insights and made critical decisions, the next phase is the SaaS product development to start the groundwork. This step is crucial and involves building your product from scratch, laying the foundation for its development.

Designing User Flow & Wireframing: Define potential user paths and create a user flow diagram, followed by creating a wireframe for the product to determine its hierarchical structure and visual representation.

MVP Development: Build a prototype of the SaaS product, the Minimum Viable Product (MVP), with the help of a team of developers, focusing on core features. This allows for faster launch, market testing, feedback assessment, and market validation.

UI/UX Designing: While the MVP is in development, UI/UX designers and graphic designers work on creating the interface and design, analyzing customer personas, their journey, and touchpoints to ensure a seamless user experience aligned with the brand aesthetics.

SaaS Product Development: After finalizing the wireframe, MVP, and design, the development team creates the product environment, writes backend and frontend codes, and makes architectural decisions.

Product Testing & Launch: Your selected assurance engineers and product testers perform manual and automated testing to ensure the product meets expectations, is bug-free, and seamless. They also analyze feedback from beta testers for improvements before launching the product.

Optimization: After the product launch, optimization involves managing costs, user experience, performance, availability, and functionalities to increase business and reduce production costs during scaling.

Scaling: Planning for the future stages of the SaaS product, such as adding more features, enhancing tenant facilities, and making product enhancements, is crucial for increasing the user base over time.

Steps to Convert an Existing Product to a SaaS Model

To transform your application into a SaaS business, you need to follow these four main steps:

Analyze

Assess the potential of your product in comparison to existing solutions in the market. Review its features and integrations. Consider whether you need to introduce new features or remove some of them. Think of the conversion process as giving your product a new life as a cloud-based SaaS.

Form a Team

You can refer to SaaS team formation in the next section. But, if you already have a team, that simply means that their responsibilities in maintaining and supporting the product will change. Here, you can consider hiring support from our development professionals.

Choose a Cloud Provider

If your product is available online, you need to host it in a cloud environment. Select us as your SaaS providers to get professional and product-specific assistance.

Migrate

The migration process may take time, depending on the complexity of your product, your team’s expertise, and the necessary integrations. Hiring us as your SaaS software development experts can shorten the development time. Additionally, remember that in some cases, migrating to an advanced technology or rewriting the backend/frontend may be necessary, so you should consider this in your estimations.

Now that you understand all the steps of developing a SaaS product consider selecting an expert development partner like Matellio. Our dedicated team will thoroughly guide you and deliver end-to-end development support.

SaaS team formation

Forming the right SaaS application development team is crucial for building cloud-based software. Here is an overview of the key roles that you should incorporate into the team:

Project Manager

This role is responsible for planning the software development process, assigning tasks to team members, and ensuring progress aligns with set timelines and requirements.

Business Analyst

The BA is responsible for analyzing the software’s market position, documenting progress, and building a viable business model for the client or company.

UI/UX Designer

They focus on designing and implementing the user interface and experience of the SaaS application.

Back-end Developer

This role manages tasks on the server side of the SaaS app and ensures that the application functions as planned using scripting languages.

Front-end Developer

These developers work closely with you and are responsible for transforming the design into code using languages like JavaScript to create frameworks.

Quality Assurance Manager

QA engineers are responsible for testing the SaaS software for defects, bugs, and issues and reporting them to the team for fixes.

The number of team members may vary depending on the project size and budget. Remember you may also require additional specialists or technical staff for product development services that you can always hire from us. We offer a highly specialized and experienced professional team for SaaS development projects.

Factors Influencing SaaS Product Development Cost

Several factors come into play when you determine SaaS application development cost.  

Some of the most key factors to consider when calculating these costs are:

Product Size

The size of your SaaS application is the most significant factor that affects its development cost. A larger product will generally cost more to build, with prices increasing as you add more users, screens, tenants, pricing models, and other features to your product.

Team Size

The team size required to build a minimum viable product (MVP) is another principal factor to consider when calculating SaaS product development cost. As mentioned in the above section, the team typically includes backend and frontend developers, UI/UX designers, QA engineers, and project managers. As your SaaS product scales, the development fees may also increase. You can manage costs based on experience, skills, delivery deadlines, and expertise.

Product Complexity

The complexity of SaaS products can vary greatly, with some requiring advanced technologies such as AI (Artificial Intelligence), ML (Machine Learning), data science, and RPA and integrations with various systems or third-party apps. Therefore, you might need skilled developers who charge higher fees for such complex products. 

SaaS Application Features

While it’s common to prioritize building the core business feature first using the minimum viable product (MVP) approach, some SaaS products may come with multiple features. The more complex features you add, the higher the costs may be.

Technological Architecture

The technological architecture, including the arrangement of components and their interactions with each other and external platforms, is another factor to consider while assessing SaaS product development cost. The number of API integrations, multi-tenancy architecture, and scalability, all can impact your budget.

Integration Requirements

SaaS products now often include third-party and API integrations, which can save costs compared to building the integration as backend functionality. However, these integrations also add to the overall costs.

Choice of Development/Team Model

The method of development chosen can significantly impact SaaS product development costs. You can build an in-house development team or partner with a reliable SaaS service provider. Staff augmentation or hiring remote developers from a company like ours can substantially help you save money and get cost-effective SaaS solutions.  

Potential Challenges of SaaS Product Development

Ensuring fair implementation of the above-given information will offer you immense help during the development process. However, as to err is to be human, consider these challenges that might hinder your SaaS application development journey.

Third-party Integration

One of the significant hurdles you may encounter while building SaaS products is the seamless integration with third-party applications. These could include payment gateways, CX platforms, contact databases, CRM, feedback tools, email services, etc. You will need SaaS providers to develop custom integrations or create services/facades to enable these integrations.

Data Security and Protection

Protecting user data is crucial while building SaaS products. Security risks associated with SaaS product development include data leaks, identity theft, unauthorized data access, phishing attacks, and account takeovers. Therefore, ensure your SaaS product’s database is well-defined and compliant with GDPR, HIPAA, SOX, PCI-DSS, and other relevant regulations based on your business model.

Scalability and Future Updates

One of the advantages of using SaaS is that you don’t have to worry about technical updates or security patches, as your SaaS provider might already provide this. However, you and your provider are also responsible for keeping the product updated and scalable as needed. Hence, work closely with your vendor to ensure regular updates for technologies, versions, and new features based on user feedback.

Managing Subscribers’ Lifecycle

You might also run into the challenge of effectively managing the lifecycle of your subscribers based on their plans and subscriptions. Proper lifecycle management is crucial for your business to handle the billing cycle effectively. You can use either third-party applications or integrate the functiona