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The reasons why software as a service (SaaS) is becoming so popular software trends are obvious today. The SaaS concept is attracting a lot of attention for its rich technical capabilities and ability to meet the current needs of users. Whether you’re starting your own startup or upgrading an existing platform, SaaS application development fits most business needs.
That’s why we decided to share our professional knowledge based on real cases from our development background.
So, in this blog post, you will:
- Understand what a SaaS application means
- Find out how the SaaS concept differs from the traditional software model
- Explore the benefits of SaaS for business owners and product end-users
- Get a complete checklist and expert advice for creating a SaaS product
- Learn how to solve SaaS application development challenges
- See how we’ve helped our clients’ projects succeed in the market
What is a SaaS application?
A SaaS application is a web-based application hosted in the cloud of a SaaS provider. It is important to note here that not all web applications use the SaaS model. Software as a service means delivering applications via the Internet. This way, users can access your application without the need to install, configure and maintain software. The service provider’s cloud handles all administrative tasks. Plus, service providers are responsible for the privacy, reliability, and performance of the application.
Unlike traditional licensed software, users are free from the need to buy a software license and install it on a particular device. Instead, users choose their preferred subscription model, which gives them access to the software features they need.
So, let’s look at the table that summarizes the core differences between SaaS and traditional licensed software:
|SaaS software||Licensed software|
|Cost||Affordable monthly subscriptions||Required upfront investment|
|Accessibility||Access from any device connected to the Internet||Limited to a single device|
|Updates||Regular and convenient updates from the service vendor||Software maintenance is up to you and applied manually|
|Security level||High-level data protection||Data security is your responsibility|
|Customization||Open to requesting custom features||Restricted within the software functionality|
The popular examples of successful SaaS apps are:
- Cloud storage (Google Drive, Dropbox)
- CRM software (Salesforce)
- Video conferencing solutions (Zoom)
- Collaboration software (Slack, Google Workspace, Office 365)
- Creative software (Adobe CC, Figma, Canva)
- Video-streaming service (Netflix)
- Online appointment scheduling software (Calendly)
4 reasons why SaaS app development is in demand
According to Statista, the global SaaS market will reach $208 billion by 2023. These numbers point to the reasons why various startups and large corporations choose SaaS services. Businesses today need digital solutions that enable consistent internal collaboration and communication. Plus, worldwide influence forces businesses to become agile while minimizing upfront and ongoing costs.
While you may already see the benefits of SaaS solutions, there are four reasons why SaaS app development can become your top priority.
Scalability on demand
The SaaS delivery model gives SaaS providers the right to control the platform despite the requirements. Such technical characteristics allow you to regulate the use of SaaS up and down. This means that when you activate a new SaaS product, the SaaS provider will handle server capacity planning. In other words, SaaS businesses subscribe to the services they need.
Large customer base
SaaS-based application development allows you to attract a large customer base. Using SaaS apps, users can get:
- Greater flexibility
- High level of data protection
- Instant access from any device
- Affordable tariff plans
These benefits also help reduce usability issues while engaging a wider audience to meet your business needs.
High data protection and security
The SaaS model provides a high level of data protection through third-party integrations and standard security protocols, including SSL and TLS encryption. This allows providers to protect users’ communication and data.
In the case of a special industry, the integration of additional security protocols is obligatory. As such, the healthcare industry requires HIPAA compliance for US startups and GDPR compliance for European applications. The SaaS model allows such integrations for any industry.
Flexible monetization model
A variety of subscription models allows customers to choose the option that they can afford. This means that SaaS applications allow their users to pay on a monthly, quarterly, yearly, or another required payment period. For example, there are popular monetization models used by many popular SaaS application providers:
- Flat rate pricing (CartHook)
- User-based pricing (Canva)
- Usage-based pricing (Salesforce)
- Feature-based pricing (PandaDoc)
- Freemium (Dropbox, Spotify, Trello, Slack)
As a result, this flexibility makes the software accessible to both startups on a budget as well as end-users worldwide.
Benefits of SaaS solutions for business owners
As a startup, you need to see the full picture of the SaaS product’s benefits to meet your commercial goals. Plus, this will encourage you to move into SaaS software development as soon as possible.
Reduced investment costs
The usage of cloud-based environments doesn’t force your business to purchase a license. In addition, there are no hardware maintenance costs associated with traditional licensed software. You simply pay for what you are going to use.
Less time required to launch a project
Given the technical capabilities of the SaaS model, you can start your business shortly. You don’t have to deal with the user’s hardware or spend time installing and configuring licensed software for your specific business needs. Once users select their preferred subscription offer, your SaaS app is ready to use.
As we’ve already mentioned, the flexibility of monetization models benefits both parties: the business itself and the end-users. Plus, this benefit allows you to track earnings within a specific time period (month, quarter, half a year). Thus, you attract a solid client base that brings you a stable income.
Benefits of SaaS solutions for end-users
Once you’ve weighed the benefits you can get early on in SaaS app development, it’s time to consider why users choose SaaS apps.
When using SaaS applications, users subscribe to the appropriate subscription plan with the desired set of features. This ability to adjust payments up and down provides cost-effectiveness for end-users.
Cloud infrastructure security protocols provide your platform with high data protection and reliability. Compared to physical servers, cloud servers have a higher level of security. In addition, customer data protection can be enhanced through third-party integrations.
Optional service packages
Customizable service packages entitle the user to purchase only the required features. These benefits increase customer satisfaction and loyalty, adding value to your product in a crowded software market.
Instant application updates
When users download SaaS products from the cloud, they do not need to update the applications themselves. Instead, such applications are automatically updated without any downtime. This saves users time while providing quality and exceptional services.
Getting started with SaaS application development: checklist
Let’s go through the checklist to understand what you need to keep in mind before starting a successful SaaS application development.
Formulate and validate your product idea
Every software project starts with a preliminary market research and business idea validation. This step involves business analysts and project stakeholders to:
- Gather all the necessary information about the product
- Evaluate target audience
- Define business value
When studying the market, it is important to analyze direct competitors, understand user pain points and find the best solution to solve them. The output of this phase is a product roadmap covering the completed market research and approved application concept.
On the way to achieving it, you need to:
- Identify your target audience and their core needs
- Determine the feasibility of your product through market research
- Choose the right monetization model to achieve your business goals as quickly as possible
- Gather and analyze feedback from your direct customers on your app idea
- Define functional and non-functional product requirements
- Consider the list of app features you need to implement
- Finalize business requirements
After you complete the business idea validation, your startup is ready to move on to the implementation phase.
Looking for a winning go-to-market strategy for a SaaS startup? Learn how to build a profitable SaaS startup with our expert advice.
Consider SaaS MVP development
- A minimum viable product (MVP) is the way businesses validate their business idea and test demand for a product with minimal investment. From a technical standpoint, MVP is an early version of fully-fledged software. Building an MVP is the most optimal choice for a startup to:
Acquire an interest of your target audience
- Test your product on real users and get an honest feedback
- Prioritize the list of SaaS app development features for the next stages
- Increase brand awareness and gain users’ trust
- Get your first return on investment (ROI) if your idea is potentially successful
Usually, an MVP consists of a basic feature set and has a simple product design. However, the scope of MVP functionality for developing SaaS applications depends on your unique product offering. Read more in our blog which details the important aspects of creating a minimum viable product.
Find SaaS developers to hire
In cooperation with SaaS application development providers, you can rely on professional help. By hiring a team of experts, you can ensure that your SaaS solution meets quality criteria, business, and product requirements. To develop a SaaS solution, you may need certain roles:
- Project manager – responsible for planning and supporting the SaaS software development process and meeting deadlines
- Business analyst – conducts market research, monitors the progress of your project, and builds a viable business model for your business
- UI/UX designer – responsible for designing the user interface and experience, ensuring that your application is responsive, user-friendly and visually appealing
- Backend developer – develops SaaS applications on the server side
- Frontend developer – develops SaaS applications on the client side
- QA engineer – tests your SaaS software for defects and bugs, creates a bug report, and sends it to developers for rework
Depending on your project size and budget, you may need different specialists to support and manage your project. For example a marketing specialist, product manager or other software engineers that are not listed above.
Hiring them separately is not a cost-efficient approach. In this case, we suggest that you find a partner who can offer a full team of SaaS professionals.
Explore the SaaS-based application development life cycle
If you decide to build your product from scratch, learn about the important milestones in the SaaS software development lifecycle. In this way, you will understand the required timeframe, approximate cost and select specialists to fully match your needs. Typically, a SaaS-based application development lifecycle consists of 6 stages:
- Product discovery
- UI/UX design
Each of the stages has certain types of activities, entry and exit criteria. Learn more about each iteration of the SaaS application development process step by step.
Determine the required feature list
If you’re collecting information on how to develop a SaaS application, start making a list of required features. There is a special set of features that differentiate the SaaS app development model from other platforms. So, take into account the following list of features:
- User profile login and logout
- Easy customization (subscription-based payment model)
- Scalability (an ability to handle increased traffic loads)
- Flexibility (an ability to add new functionality into the platform)
- Application and data security, the safety of authentication, authorization, access control
- User-friendly interface
- Automatic updates
- Clear documentation (user guides, manuals, and product documentation)
Choose a technology stack
The tech stack for SaaS-based application development is the foundation you use to run your application. Therefore, it is important to apply the best technologies and tools to realize the full potential of the product. However, there are specific requirements and independent factors, such as developer experience, that may influence your choice. Either way, there is a proven technology stack used to power your SaaS platform:
For frontend SaaS software development:
- Libraries (Angular, React, Vue.js)
- Mobile frameworks (React Native, Flutter, Objective-C, Swift, Kotlin, Java)
For backend SaaS-based application development:
- Languages (Node.js, PHP (Laravel))
- Databases: MySQL, PostgreSQL, Redis
- AWS (Amazon Web Services)
Define tenancy model
One of the peculiarities of SaaS application development is deciding on SaaS app architecture. If you want to figure out how to develop a SaaS application, choose the right tenancy model. There are single-tenant and multi-tenant architectures.
Multi-tenancy in SaaS-based application development models stands for a system with multiple companies or tenants that share a single SaaS platform.
In multi-tenant architecture, the same database, computer resources, and application infrastructure can be used by multiple tenants, while in a single-tenant architecture, each tenant has its own. А мulti-tenant cloud-based SaaS architecture allows your platform to scale. This happens due to this architecture:
- allows one server to run multiple applications
- allows multiple users to access the same application
In the case of single-tenant SaaS architecture, every client has their own server when using your app. This way, your resources can quickly run out.
That’s why it is important to select the right tenancy model based on your needs and requirements.
Choose APIs to improve the app’s functionality
Developers use third-party APIs to add certain features to the platform without building it from scratch. In this way, you can extend your app’s functionality, making the user’s journey smoother. In case you need your platform to connect to social media platforms like Facebook, Twitter, or LinkedIn, API integration is enough for that.
Determine a suitable pricing model
One of the important milestones in SaaS app development is the choice of a monetization model. Through your platform’s pricing strategy, you will monetize your business. As such, it’s important to choose pricing models that match your product’s features exactly. We’ve already mentioned five of them:
- Flat rate pricing. A classic model that requires users to pay for full access to the product for a certain period of time. This model is easy to understand for customers, but a redundant feature pack may seem unnecessary to users who need certain features.
- User-based pricing. In this model, each new user requires an additional fee. This model is beneficial for large enterprises, but revenue is difficult to predict and depends entirely on the number of users.
- Usage-based pricing. In this model, customers get what they pay for. The main advantage is that you can achieve high demand due to the flexibility of this model. However, it is difficult to predict the level of income due to constant fluctuations.
- Feature-based pricing. Prices for this model depend on the feature set, for example, Standard, Premium, Pro. You may reach different target audiences, but spend more time implementing rich product features to create such feature sets.
- Freemium. This model implies free versions of some apps with limited functionality, where users can purchase more to unlock the full version. This model easily and effectively attracts new customers. But, sometimes, it can be difficult to find a balance between free and paid functionality.
As you can see, the choice of monetization model directly depends on your business model and product goals.
SaaS software development challenges and how to solve them at Northell
If you want to know how to develop a SaaS application the right way, you should consider all the challenges you will encounter along the way. Otherwise, you may experience additional overhead and lose more time. So, let’s take a look at 5 popular challenges and figure out how to solve them effectively following Northell’s team experience.
Third-party services integration
Problem: The payment functionality integration into your SaaS platform is possible through the integration of third-party APIs. Today, most payment solutions are ready to provide their APIs, which makes the process smoother. However, developers need to learn all the technical aspects of payment integration to prevent application crashes.
Solution: At Northell, we focus on creating manual and automated tests to verify the quality of the product after the integration of these services. We’re running a series of tests to make sure that the app’s payment system works correctly.
Management of a subscription model
Problem: If you already know how to develop a SaaS application, don’t forget to properly manage the subscription model. You can face a lot of risks when creating your own subscription management solution. This will require features such as subscription, tracking, updating, resubscription, and cancellation. You will need more time and effort to properly deliver and test this solution.
Solution: Our development team recommends choosing off-the-shelf products like Stripe. You will need to pay for using this solution. However, this method is simple and convenient, as it provides its own API and clear documentation for SaaS systems.
Secure database and regulatory compliance
Problem: As a SaaS provider, you are responsible for protecting customer data and privacy. That’s why you will need to develop a robust database design that follows compliance with main regulations. For example, the General Data Protection Regulation (GDPR) for the European Union and the Health Insurance Portability and Accountability Act (HIPAA) for health software in the United States.
Solution: At Northell, we suggest considering your product requirements in the early stages of product development. Then create test cases to perform unit and integration testing to make sure data access is restricted.
Problem: In the list of steps required to learn how to develop a SaaS application, make the availability of the SaaS system a high priority. There are situations when new versions of the system are released, but users cannot get full access.
Solution: Our development team offers you to use a zero-downtime deployment strategy. This strategy assumes that the service is fully responsive during deployment. This way you ensure that your SaaS solution is completely reliable.
Problem: During SaaS application development, customization features are highly important to long-term business success. This task will require time and cost to customize product features such as colors, layout, and subdomain for each tenant individually.
Solution: Even though customization is resource-intensive, our development team offers to handle these requirements. In this way, you will achieve greater commercial value and the long-term viability of your product in the market.
Successful SaaS solutions from Northell’s experts
The Northell team is highly experienced in understanding how to develop SaaS applications for various industries.
Starting with product strategy definition and market analysis, we can create your solution from scratch or update an existing one. Let’s discuss two real cases from our portfolio to give you a clear idea of how we helped launch these products successfully.
Building an advanced mentoring platform from scratch
BridgeX is an educational mentoring platform that helps aspiring entrepreneurs assess the feasibility of their business idea by completing a questionnaire.
Building a platform from scratch is always a challenge. That is why our client hired us to bring his idea to life.
So, we were responsible for:
- Product discovery
- UI/UX design
- Frontend and backend development
- Testing and deployment
After our team finalized the app concept and design, we defined the product roadmap. Based on the platform’s specifics and goal, we decided to get started with SaaS app development. Thus, this platform will be able to cover all initial product and business goals.
So, the main goal of the platform was to make the platform subscription-based and highly customizable. Thus, entrepreneurs could choose the appropriate subscription plan and get the required service faster. In turn, mentors will be able to provide step-by-step assistance in a timely and consistent manner.
So, for the BridgeX project, we started with:
- Definition of functional and non-functional requirements for the product
- Description of user roles
- Writing technical documentation and product specifications
- Finalizing product strategy and goals
- Establishing timeframes and cost estimates for the project
Following an agile approach to project management, we:
- Prepared a design system from scratch, making it simple and user-friendly
- Created full-featured dashboards for both mentors and entrepreneurs
- Developed personas profiles
- Implemented onboarding feature to simplify the user’s interaction with the platform
- Added calendar for setting deadlines for professional mentor consultations
- Implemented a subscription-based model and payment system into the platform
- Create questionnaires to help startups grow
After all SaaS application development jobs were done, we deployed a clickable prototype to our client. The client released the fully tested product, allowing his business to increase commercial results. Today, this platform helps aspiring entrepreneurs build their businesses with almost a few clicks.
Redeveloping existing platform to fully-fledged cloud SaaS platform
Our next case is MeetAlfred platform – sales enablement software for LinkedIn, Email, and Twitter. This application allows different companies to find their target audience and create effective campaigns to improve business results.
Our client came to us with an existing desktop application that needed to be rebranded and redesigned for a SaaS cloud platform.
The main goal for us was to expand the functionality of the platform, improve UI and UX.
So, we were responsible for:
- Product discovery
- UI/UX design
- User testing
As a part of product discovery, we:
- Conducted stakeholder and users interviews
- Defined project goals
- Completed market research
- Described personas for four target audiences of the application (marketing and advertising, professional services, IT and software, recruiters)
- Created customer journey map
Nextly, we moved to the implementation stage and created such solutions:
- New design system preserving product identity and core message
- Updated UI design in a minimalistic and stylish manner
- Implemented login features
- Developed the onboarding function for the user to help him get acquainted with the functionality of the platform
- Created customized dashboards for the required campaign launch
- Added new functionality for the contacts page
- Redesigned the marketing website so it can reach different audiences
As a result, our team managed to redevelop the platform while maintaining its original value for business and users. Today, more than 100,000 users use the SaaS platform to grow their businesses and run workable multiple campaigns.
Looking for professional help to get started with SaaS application development? Just choose a project type and our experts will develop a detailed proposal to meet your needs! Contact us.
How much does it cost to develop a SaaS application?
The cost of building your SaaS solution directly depends on the following criteria:
- Business model
- Features package
- Expected time to market
- Development approach (hybrid, native, cross-platfrom)
- Team location
- Team size
- Team expertise
- Hiring model
During the product discovery phase, business analysts evaluate all aspects that affect the final cost of your project and develop a proposal for you. However, let’s look at a table that shows the average cost of SaaS software development services, divided by project phase.
|Product discovery||UI/UX design||Development||QA|
As you can see, all the time and cost variables depend on many factors. However, the best value for money you can expect is from Eastern European countries. Either way, the Northell team is here to advise you on a SaaS app idea within your budget.
Hope we’ve managed to help you put priorities when considering how to develop a SaaS application. Today, there are many approaches to distributing digital services. Yet, there is no silver bullet here that fits all business needs.
At least, SaaS application development has become a popular model because of the competitive advantages it can provide to both customers and business owners. So, when you understand what tools and steps are needed in this process – there is little left to achieve your goal.
Looking for SaaS application specialists to create your product development roadmap? Let’s make your business idea viable together!