Although highly sought after and popular, building SaaS applications is, in fact, a highly challenging business undertaking. For more than 15 years in the software development industry, at Trustify Technology, we have handled various kinds of SaaS development projects, for both mobile and web platforms. And from experience, we gained a deep understanding of all the ins and outs of this process.
Due to the rise of SaaS-based application development, companies successfully deliver their services through cloud computing and subscription-based models. According to Statista, the Software as a Service (SaaS) market worldwide is projected to grow by 19.30% (2024-2029) resulting in a market volume of US$793.10bn in 2029.
As a matter of fact, many of the applications you are currently using at work or in daily life are the result of SaaS development.
In this article, we will examine the features of SaaS development and reveal the detailed stages of this process. And above all, we will try to answer the question: what is SaaS application development?
What is a SaaS Platform?
SaaS is the abbreviation of “Software as a Service”. And this shows the meaning of the concept. Specifically, this refers to a business model where a business provides their services to you on a subscription basis. Here, as an end-user, you do not need to purchase the software license in order to use it. You also do not have to pay for the required server or infrastructure and additional software to run the software.
Typically, the whole operation takes place on servers in digital clouds that users can access via a web browser, mobile devices (mobile app), or API. This allows the user to work with a complete and ready-to-use software solution directly online.
To illustrate this further, let’s compare this to the buy and rent scenario. For example, when buying or renting a house, each has its own pros and cons. However, in some cases, rent wins the battle in many ways. One of these is that maintenance is the responsibility of the owner and not the renter. And yes, affordability also plays an important role.
The same can be applied for SaaS applications: they are seamless and a lot less burdensome for users than buying licensed software and then installing and running it on your own. With SaaS, there is no need for the IT team to spend time manually configuring the software program on each end-user’s computer. Instead, SaaS providers handle all technical aspects of development as well as support and maintenance, together with security in most cases.
Therefore, the benefits for users include:
- Reliability: the servers of Cloud-based applications are usually located all over the world. Even if one or more servers fail, the application remains online;
- Always-On Availability: SaaS applications can be accessed online anytime, anywhere, and on any device.
- Try before you buy: Using a SaaS application, users have the opportunity to “test drive” the software solution first and decide if they want to continue using it later;
- Enterprise ready: SaaS applications often offer an enterprise package for companies. They include enhanced features and tools for team collaboration.
- Cost-effectiveness: Monthly subscriptions are very affordable compared to purchased the software and other extra tools;
- Scalability: If the total number of SaaS users in your team or company increases (or decreases), a SaaS application is easy to scale allowing businesses to add (or remove) users as needed;
Examples of SaaS Applications
The simplest examples of SaaS applications are Google Sheet or Dropbox. Both programs offer a free version for individual users and subscription-based plans under Google Workspace (formerly G Suite) for businesses, which include additional features like enhanced storage, and collaboration tools. With Google Sheet, users can work on their spreadsheet online from anywhere in the world.
Complex examples of SaaS include Salesforce, or Microsoft Dynamics 365, and other enterprise solutions.
Benefits of SaaS Applications Developments
It’s no surprise that from a user perspective, the benefits of developing SaaS applications are numerous. What’s less clear, however, is that building SaaS applications can also be beneficial for companies and other business organizations.
When it comes to Saas products, even if users are already onboard using your product, it doesn’t mean you can stop improving and stick with the same product year after year. Developing a SaaS application is an ongoing process that continues even after the product is already launched. Instead, it would be better to monitor app performance and gather feedback to make improvements and better meet user needs. Moreover, you can also add custom features to make your apps relevant to specific business needs.
Here are the advantages of building and running a SaaS app business:
Steady Revenue
By operating on a subscription basis, you can enjoy regular and long-term income from your loyal customers as well as new customers. It also allows your business to use this revenue to continuously reinvest and improve your product.
Value Added Services
In a SaaS business, you have the flexibility to research the market as well as your users needs and modify your application to meet the market demand. This gives you a real chance to create a valuable service that will be a complete all in one solution for your customers and turn them into loyal ones. Even if the first version of your product is not well received, you can always iterate and continuously improve it.
SaaS development outsourcing
Issues to Consider Before Developing a SaaS Applications
SaaS app development differs from building more conventional apps with a one-time payment. In particular, there are some things to take into account before starting the development.
Outsourcing SaaS Development
Things to Consider Before Developing a SaaS Application
Building SaaS applications (subscription-based model or pay-as-you-go) is different from building more traditional one time purchase applications. There are several things to consider before you embark on development.
Cloud Computing Services Provider
SaaS applications are not possible without cloud services. That’s why choosing the right cloud service provider for your SaaS application should be the most critical part for the success of your Saas product. Fortunately, you have plenty of choices. This could be an established, market leading cloud provider like Microsoft Azure, AWS or Google Cloud, or other services. Here are some factors that can determine your selection:
- Price (Pay-as-you-go): How much can you afford to pay for a cloud provider?
- Services: Does the cloud provider offer the services your Saas product needs? E.g. hosting, file storage, content delivery network (CDN), etc.
- Security: Which security services are best for your product?
Established cloud providers always offer a ton of services and tools to help your business grow. So if you opt to go with providers like Google Cloud Platform or AWS, you always have room to scale and grow.
Security in SaaS application
When operating SaaS businesses, you are almost always working with databases. In addition, when data is stored in the digital cloud, security issues are inevitable. Fortunately, cloud service providers usually take care of security problems for you.
Amazon Web Services (AWS) provides a diverse range of security-focused tools (e.g. AWS WAF or Web Application Firewall, AWS Config, etc.) designed to safeguard applications, data, and infrastructure. These tools can help your businesses monitor threats, enforce access controls, and secure sensitive information.
Integration with third-party services
When developing a SaaS app, you need to include many features that meet users’ needs. Manually coding everything from scratch takes a lot of work, time, and is costly. The good news is that you don’t have to do so. Instead, you can integrate with existing services from third-party providers. So you see integrations with Authentication Services, AI & Machine Learning, Analytics and insights, and payment processing, etc. in many applications.
Building a SaaS Application
We have outlined the main factors to consider before developing SaaS applications. Next, let’s move on to the actual development process. Here are 7 steps to turn your SaaS idea into a real product:
Step 1. Research
So you have an idea about building a SaaS application. To get started, the first step is to research users, competitors, and market conditions. The main objectives of this phase are to:
- Identify the targeted users;
- Understand the your users’ problems;
- Understand how users are currently solving the problem;
- See how you can provide a solution or improve the existing one.
At this stage, you might find that there are very few, or even no, competitors in the market. Yet, this is not always a good thing. This could probably mean that this market lacks demand and there is no need for a new solution.
Step 2. Validate your ideas
After the first step, you will have ideas to improve the existing solution for users. But still, these are just guesses. You have to actually interview users to validate your hypotheses. This includes:
- Interviews your targeted users;
- Gain an understanding of what your users want and need;
- Find out what is preventing them from achieving their goals;
- Prototype your solutions and test them with your audience.
Step 3. Evaluate users’ willingness and ability to pay
The next important step in building a SaaS application is ensuring that users are willing and able to pay for your solution. To achieve this, we recommend conducting interviews and tests using well-thought-out, targeted questions designed to gauge their interest.
Step 4. Monetization
Choosing the appropriate monetization model for your SaaS applications is another important step to ensure your project success. A common choice is to opt for the subscription-based model which has proven to be successful in many saas start-ups and enterprises. However, as shown before, the subscription-based model also raises some concerns.
With a subscription model, your initial focus is on acquiring a large user base, often requiring significant upfront investment, then generating the monthly or yearly revenue later.
Additionally, you must ensure that customers use your services regularly long-term, so that you can make a profit and cover all costs including product development, office rent and other administrative costs. So the majority of your investment goes into customer acquisition and retention.
If you’re a SaaS startup, it can be even more complicated. In this case, you must have a sufficient budget before launching your product. This is to avoid a situation where all the money has been invested in user acquisition and product development, and the monthly user payments have not yet started.
Step 5. Choose the right tech stack
By technology stack we mean the technologies used to build the software which includes front-end (framework and libraries), back-end, database, server and infrastructure configuration.
Before choosing a specific mobile technology stack or web technology stack, it is important to consider the scalability, potential benefits and costs of launching a SaaS platform.
Step 6. MVP development
We are finally ready to build the first version of the SaaS product, a Minimum Viable Product (MVP). An MVP covers only the important features of your app and conveys the main idea of the product. It is a simplified model of your application, developed in a minimal amount of time. An MVP could aim to:
- Test the product hypotheses with early adopters;
- Present the first version to investors as part of your pitch.
You may be surprised to learn that we are building a simplified version of the product rather than going for a full-scale development. Here, it is important for many startups to first validate the basic functionalities and if they are well received by users, and move on to full product development after.
Read more about: What is the difference between an MVP and a Prototype?
Step 7. Software QA and iterating
Once built, your MVP must be tested with early users. During the testing process, you test two things:
- Your idea is viable for users;
- If the implementation of your idea is good enough for users to understand.
At this stage, it is important to spend some time communicating with users. The more user feedback you receive, the more information you have to improve your SaaS application. All this knowledge will be used in the next iteration of the application.
Step 8. Maintenance & Continuous Development
Once the product is launched, a new story begins. The point is that you never stop working on your product, especially when it comes to SaaS applications. Product maintenance includes:
- Seeking growth opportunities;
- Search for and acquire new customers and expand your Target Audience;
- Find and fix errors.
- Continuous Development of SaaS applications
Final Words
From experience, we know that SaaS development is different from other forms of software development or application development. It is a complex process that requires many factors to work as a whole:
- An experienced team of developers with specialized knowledge;
- Continuous user research and product improvement;
- Proactive customer service and communication;
- Strong sales activities;
- Marketing promotion and public relations.