What Is Software Development as a Service (SDaaS) in 2023?

2666 Updated 01.11.2023
Vasyl Polych

Founder & CEO at Northell


Table of contents

Recently, Software as a Service (SaaS) was one of the biggest trends in business. To this moment, it remains one of the largest IT markets estimated at nearly $186,6 billion as of 2022. But, as the demand for this kind of service keeps growing, new solutions appear and skyrocket. SDaaS is among such trending solutions.

Software Development as a Service is a cutting-edge solution designed to fuel business growth. But, what exactly does it stand for? And how can a business benefit from it?

In this article, we are going to guide you through everything you need to know about Software Development as a Service. Let’s dive in!

What Is Software Development as a Service (SDaaS)?

In a nutshell, SDaaS is the process when independent qualified developers or whole development teams contract out their software development capabilities to a client in the form of service. The duties of contracted developers are often end-to-end and span all aspects of developing different types of software, including planning, designing, implementing, and supporting (maintaining) a particular piece of software.

Typically, SDaaS is provided on a monthly subscription basis. That is, a client pays a negotiated monthly fee for having one or several developers work on their software development. This subscription model for development as a service has numerous perks.

But, most importantly, it enables clients to forecast the financials for their projects with ease and keep software development costs within the budget that works for them. And, it’s also worth noting that SDaaS is often a long-term partnership model, which implies ongoing collaboration with the same service provider on current and future projects.

SDaaS vs IT Outsourcing: What’s the Difference?

Knowing the Software Development as a Service definition, it can be easy to confuse it with another popular IT solution – outsourcing. Indeed, at the first glance, these two solutions look very alike. Both are designed to help clients delegate software development to professionals and get the desired product with less time and effort on their in-house teams’ side. But, if you look deeper into this matter, the difference is huge.

So, you already know what development as a service is. Now, what is IT outsourcing?

IT outsourcing is the process of hiring external talents (often through an outsourcing agency) to allocate the work on your IT systems and receive the needed IT solutions without the need to hire in-house staff. Often, IT outsourcing is used on a one-off project basis. That is, companies either delegate a specific project or its separate parts to external talents.

Now, let’s look at the key differences between these two solutions:

Key differences between SDaaS & IT Outsourcing

Key differences between SDaaS & IT Outsourcing

When Do You Need Software Development as a Service?

There might be many reasons to partner with a trusted development as a service company. Namely, below are some of the clearest signs that you need SDaaS.

Shortage of Specialists

The first reason to opt for SDaaS is when you lack specialists in your own team. Every IT project requires a wide range of specialists to support its development and ensure the best results. This includes developers, engineers, project managers, etc. And the larger and more complex a specific project is, the more qualified specialists it will take to implement it.

Now, here is a problem – if you are a startup, a small-medium business, or even a large company that plans a massive and complicated project, chances are that you might have a shortage of talent to bring your ideas to life. Hiring the right specialists can be incredibly time-consuming and hard. Moreover, there are always additional issues, such as onboarding, that can get in the way of your project.

In this case, requesting development as a service is a wise solution as it will give you access to the right pool of talents and help you save lots of time on hiring and onboarding new staff.

Technology Gap

Even if you do have the right talents, some projects have very extensive, complicated, and cutting-edge tech stacks. If that’s the case, closing the gap between the technology you already have and what is required for your next project can be quite challenging and expensive too.

This is one more occasion when you might need SDaaS. Turning to the right service provider, you can rest assured that there is no technology gap. The providers of SDaaS services often possess a broad tech stack that can match your project needs.

Slow Time to Market

Software development is never a piece of cake. Every project requires lots of time to research the market, audience, and competition, plan, and implement it to the highest standard. But, what if your team is dealing with multiple complex projects at the same time? Unless you have a huge development department, chances are that you will have to balance different projects, which can significantly slow down your products’ time to market.

Software Development as a Service can solve this problem too. By contracting the needed number of external developers for your projects, you kill two birds with one stone – speed up the time to market of your products and save lots of time for your in-house team to let it focus on other things that matter.

Lack of Cost Optimization

Every IT project has a wide range of associated costs. Depending on the industry, complexity, features, and other factors, the cost of a particular product can range between $60,000 to $150,000. And it can be very easy to go over the budget if you lack cost optimization.

If you opt for development as a service, you can prevent extra spending. As was said earlier, SDaaS often strives to reduce the risks and costs of development. When you opt for such services, you negotiate all related costs in advance and the service provider will do everything to keep the solution within your budget. As a result, you can save lots of time and money too.


Finally, one last clear sign that you might be needing development as a service is if you lack your own resources for implementing the project. Every software development product requires the following types of resources to be implemented in life:

  • People (developers, designers, engineers, managers, QA specialists, etc.);
  • Reusable components (different software building blocks that can be reused in multiple projects);
  • Hardware and software tools (the specific tools required for every project are defined by many factors, including the product’s complexity, features, etc.).

Together, all these resources make it possible to implement pretty much any project. But, if you lack any of them, your product’s feasibility is at risk. That’s when contracting the right development as a service company can come in handy. You will be able to ensure that your partner has all the resources needed to make your project feasible and successful.

Who Needs Software Development as a Service?

Now that you know about the specific cases when you might need SDaaS, you might also wonder what kind of companies need such solutions the most.

According to our experts, startups and small-medium businesses can benefit from SDaaS the most.


Being the smallest and youngest players in the market, startups often lack financing, resources, and a well-defined team structure. All these issues often get in the way of startups in implementing their software development projects. Also, startups often lack human resources and, according to Forbes, hiring for a startup takes an average of 6 months.

At the same time, stats indicate that 90% of startups fail, which means that the need for high-quality products in such companies is huge. Looking at all these issues and pitfalls that startups have, it becomes clear that contracting with a reliable SDaaS that has the needed expertise, tech stack, and other resources can be a real game-changer for startups.

Small-Medium Businesses

As for small-medium businesses (SMBs), such companies also often lack talents, technology, and other resources for implementing their software development projects. At the same time, SMBs often have to work on more than one project at the same time. Therefore, such companies might also need the help of SDaaS service providers to roll out their products faster and easier, reduce costs, and stay competitive.

Benefits of Software Development as a Service

If you are still wondering whether you really need SDaaS or not, let us help you make up your mind faster. Here are some of the key benefits of such services that you can get with a trusted partner:

Cost Savings

Having the budget set in advance, SDaaS enables you to complete your projects with no hidden or unexpected costs.

Fast Time to Market

Delegating software development to an SDaaS partner, you can significantly speed up the project’s flow and improve your product’s time to market.

High Scalability

When there are no sufficient human and other resources, scaling your business is hard. But, SDaaS brings scalability to businesses.

Transparency in Project Management

SDaaS providers typically run solid documentation on every stage of the project and keep in touch with your team on all important matters. This allows a transparent and seamless workflow.

Access to Highly Qualified Software Specialists

Every product requires specific skills and expertise. Completing your team with the right talents is hard and time-consuming. But with SDaaS, you will access the competent specialists you need for your project.

No Recruitment Hassle

When hiring the right specialists for a new project, you need to shape requirements, find and filter out candidates, interview them, hire the right people, and onboard them. SDaaS frees you from all this recruitment hassle.

High Team Commitment

With a reliable SDaaS partner like Northell, you will gain a dedicated software development team that will be committed to your project’s success. As a result, you are guaranteed to get the best outcomes with less effort on your side.

5 Steps to Choose the Right Software Development as a Service Company

5 Steps to Choose the Right SDaaS Company

5 Steps to Choose the Right SDaaS Company

Knowing all the benefits and reasons to contract a professional Development as a Service company, you might want to find such a partner for yourself too. The only question is how to do this right.

Here is a short but helpful step-by-step guide that will help you find and choose the best SDaaS company.

Formulate Your Product Requirements and Business Goals

Before you can find the best SDaaS company, you need to know what exactly you are looking for. So, the first step includes identifying and formulating your product requirements and goals.

Take time to study the essence of your project. How long will it last? What kind of product will you develop? What specific features do you want it to have? What tech stack will be required for implementing this project? And, most importantly, what goals do you want to achieve with this product?

Answering these questions and writing down all your requirements and expectations will help you understand what kind of SDaaS company you need to achieve the best results.

Check Out the Types of Software Development Companies

Once you know your goals and needs, you have to study the types of companies that are there. Basically, all SDaaS companies can be divided into two categories:

  • Product-Based Companies – In a nutshell, a product-based software development company is a company that has a range of its own products that it sells to clients.
  • Service-Based Companies – A service-based company is one that may or may not have its own products. The primary business of such companies is delivering software development services to their clients.

Which one should you choose? Both product-based and service-based companies have certain pros and cons. Namely, the quality of products provided by a product-based company is always the same, which is good. Such companies strive for the highest quality of their products to market them to more people. You can opt for such companies if you are looking for a solid off-the-shelf software solution.

On the other hand, only a service-based company will let you receive a custom solution tailored to your unique needs. Such companies put focus on a client and build custom solutions based on the client’s needs, expectations, and goals. Therefore, if you are looking for a unique piece of software, a service-based company is your best bet.

Narrow Your Search for Software Development as a Service Companies

Once you have all the requirements in mind, you can start searching for the best Software Development as a Service company for your project. One way to find your SDaaS partner is via search engines. However, this method will take quite a lot of time and additional research.

Instead, you can use platforms like Clutch or Trustpilot to find listings of the best companies with ratings, customer reviews, and all key information. Such platforms will help you make the right choice faster and easier.

When exploring different options, pay special attention to the following factors:

  • Experience and expertise;
  • Team organization;
  • Tech stack;
  • Software development processes;
  • Communication;
  • Guarantees of quality, timeliness, and satisfaction.

All these things will help you narrow down the options and get one step closer to choosing the right SDaaS company for you.

Explore the Company’s Website and Portfolio

When you narrow down your options, the next thing you have to do is check out every company’s website and portfolio. This step is crucial for defining how well each particular service provider suits your expectations.

Apart from exploring the website and portfolio, there are a few other things you must figure out before choosing your SDaaS partner. These include the workflow and cooperation models used by every candidate. Both the workflow and cooperation model must correspond to your corporate culture and vision. This will help establish a smooth and seamless collaboration and communication throughout the entire project.

Consult With a Service Provider

Finally, after you feel like you know everything about the chosen option, there is one more thing you should do to ensure success – talk with the team. It never hurts to request a consultation before you commit to a particular service provider in the long term.

Here, at Northell, our experts are always happy to provide every new client with a consultation and answer all their questions to prove we are a good fit. So, if you need a reliable SDaaS service provider, don’t hesitate to request your free consultation right now and we will help you make a simple but right choice!

Why Choose Software Development as a Service From Northell?

Why Choose Software Development as a Service From Northell?

Why Choose Software Development as a Service From Northell?

If you are looking for a reliable Software Development as a Service provider, the guide we shared with you will help you get on the right track. But, since you are reading this, there is no need to look any further because you’ve already found the right SDaaS company for you!

Northell has everything you were looking for. Our vast expertise and professionalism enable us to deliver top-notch SDaaS for businesses of all shapes and kinds. Namely, with us, you will get:

  • Personalized approach
  • Transparent workflow
  • Extensive portfolio
  • Fast time to market
  • Different cooperation models
  • Talented pool of IT professionals

Sounds too good to be true? Wrong guess because all these benefits are waiting for you at Northell. So, don’t waste any more time and entrust your SDaaS tasks to real pros from our team and we will not let you down!

Software Development as a Service: Costs and Timelines

When you decide to opt for a Software Development as a Service, the costs and timelines must be among the top criteria that you look at when searching for the right partner.

So, how much does SDaaS cost and how quickly can you get a ready-made solution?

Unfortunately, there is no single answer for everyone. The cost of an SDaaS project can vary significantly, depending on the following factors:

  • Scope of your project;
  • Features;
  • Complexity;
  • The number of specialists who will work on your product, etc.

Although it is hard to estimate the total cost of each particular project without knowing its specs, let us share with you the average hourly rates of developers by location:

Costs and Timelines

Costs and Timelines

Apart from this, there might be some additional expenses. The good news is that SDaaS services are typically provided on a monthly basis and the cost is always negotiated in advance. That is, when hiring Software Development as a Service partner, you can set a specific budget and the chosen company will keep all the costs within that budget.

As for the timeline, it also varies depending on the factors mentioned above. But, as we said earlier, the SDaaS model often implies long-term collaboration

Software Development as a Service: Conclusion

So, now you know everything you need to know about Software Development as a Service to decide whether this solution is right for your business.

Need more help? Don’t hesitate to reach the experts from Northell to get a free consultation and acquire a reliable SDaaS partner that will propel your business growth!

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