The idea of “software as a service” was a relatively novel business model a decade ago. It’s currently one of the most popular market trends: if you know how to create a SaaS product, you’ll probably have a good idea for a startup. The next step is to select a software development model that satisfies the requirements of your target audience.

In 2022, end-user spending on public cloud services is anticipated to reach a total of $494.7 billion, according to Gartner’s forecasts. Whether it be in retail, finance, or healthcare, various businesses adopt a cloud computing paradigm (based on SaaS) for their unique needs.

Advantages of SaaS Application Development

Cloud-based SaaS solutions are confidently replacing conventional apps installed on local infrastructures. Let’s take a closer look at what companies find beneficial about SaaS products.

• Ease of Setup

SaaS apps are web-based, so no complex setup is necessary. Neither do companies have to acquire infrastructure resources in order to run these cloud-based apps.

• Scalability

If their business expands, companies can easily scale their SaaS solutions. It allows to handle increasing workloads and accommodate more users. With traditional software running on top of an op-prem infrastructure, scalability often becomes an issue.

• Convenient Billing Model

SaaS fees are included in the monthly operational expenses, which is easier for most companies to pay than a costly application license. If the SaaS application scales, the fees increase, but there’s no need to invest in additional infrastructure capacities.

• Instant Upgrade

Users get to benefit from SaaS software upgrades as soon as they get deployed. With traditional software, to access improved features and added functionality organizations need to purchase and install a new app version.

• Accessibility

Companies can use any SaaS application literally whenever they need and from any location, as long as there’s the Internet. With the work-from-home model likely here to stay, accessibility is becoming a must-have.

• Easy Trial

SaaS products allow users to try them before they actually commit. Rather than investing in an application that may not fully live up to expectations, users can test-drive the app features and see if they meet their needs.

Types of SaaS Apps

Numerous kinds of applications are developed as SaaS solutions. The retail and eCommerce sectors are eager adopters of SaaS products. Wix and Spotify page-building platforms are setting the standards for SaaS product management in the eCommerce industry.

The SaaS offerings, however, are not limited by these categories. Below is an overview of the existing app types in the SaaS product market.

• CRM Products

SaaS products for managing interactions with customers help companies keep track of all the customers’ data, automate marketing efforts, provide insights and analytics, forecast future sales, etc. Salesforce, for example, is a leading cloud-based CRM software vendor, but there are numerous other players offering tools for similar purposes.

• Project Management Tools

Most companies no longer invest in buying licensed PM software packages. Instead, they use SaaS products like Jira and Monday to manage workflows, assign tasks and track their completion.

• Collaboration Tools

For example, such a SaaS product as Slack or Trello combines project management capabilities with collaboration features. The coronavirus lockdown has led to the emergence of web-based video conferencing platforms, such as Zoom, used extensively for both personal and business communication.

Apart from traditional collaboration tools, the new immersive solutions unmistakably stand out. With headsets and access to the Internet, apps like VR сhat or a collaborative platform for business enable users to run in-person meetings in a virtual environment.

• Fintech Apps

Today’s cloud computing services also include SaaS products for billing and financial transactions. Cloud-based billing services like Stripe combine merchant accounts with payment gateways and subscription management capabilities.

• Marketing Software

Businesses also use web platforms to create, launch and evaluate promotion campaigns. This is also one of the most densely populated SaaS market segments with platforms like Microsoft Dynamics 365 Marketing among global leaders. Interestingly, while back in 2007 the number of marketing tools hardly reached several hundred, today more than 8 500 apps are assisting in businesses consolidating their marketing efforts.

• Gamification Apps

A trend towards boosting productivity via gamification is now gaining momentum. For businesses, looking to maximize their staff engagement, here at Visartech we helped to build a mobile app for increasing productivity. A gamification app for businesses accounts for 33% growth in employee productivity. This SaaS application comes both in Android and iOS versions.

• ERP Platforms

Web-based solutions are also replacing conventional enterprise applications. Robust ERP platforms like SAP feature dashboards and data analytics enabling businesses to gain insights into their operations.

• Sports Apps

Coupled with extended reality technologies, cloud-based sports simulation platforms, such as Skytrak are prominent examples of how SaaS development can benefit sports enthusiasts. This SaaS software enables users to hone their golf skills and play real-time games in a virtual environment.

• Vertical SaaS Segment

These SaaS product types are specific to a particular business segment. There are web services, targeting construction, HORECA, insurance, manufacturing, and other industries. Veeva, for instance, is a tool for pharma companies that enables them to streamline their operations. Fleetmatics is a SaaS platform for logistics.

8 Steps for Building Software-as-a-Service Apps from Scratch

As such, SaaS product development is a complex process that requires a clear product roadmap with several logical steps.

Read Also: How do I Prepare For SaaS Interview?

Below we will guide you through the SaaS product development process. There you will clearly see the step-by-step roadmap implementation of building cloud-based apps.

• Step: 1. Research and Create App Tech Specification

Your goal at this point is to collect as much information as possible about your future customers, competitors, trends, and emerging technologies. Combined with information about the shortcomings of competitors’ apps, insights into users’ needs will enable you to come up with a truly unique SaaS product. If you’re contemplating building vertical SaaS business applications, study the developing tendencies in the industry you will be tapping into.

At the end of the initial phase of the app development process, you will create a detailed and exhaustive technical specification containing your app’s functional and non-functional requirements and guidelines for product development. It may be the first step to your SaaS MVP development.

• Step: 2. Define Revenue Channels

How exactly do you intend to earn money with your SaaS solution? It is essential to answer this question before you embark on a full-scale software development project. This is one of the crucial steps for building SaaS apps since it will determine the structure of your software product – something that can’t easily be undone, so think carefully.

The most widely spread ways to generate income include advertising, subscription, and freemium models. If you will be building a cloud-based marketplace, consider introducing transaction and/or selling fees.

• Step: 3. Decide on a Cloud Infrastructure Provider

To serve multiple users while securing their data, you need to select a proper cloud infrastructure company. Go for the proven and reputable vendors, capable of maintaining the best encryption and data center security practices. Your SaaS platform will run on cloud infrastructure, so choose the cloud service provider that will deliver an excellent level of scalability, reliability, and performance, capable of supporting third-party integrations.

• Step: 4. Create an MVP

This isn’t a full-fledged cloud-based solution just yet. Minimum Viable Product (MVP) is a trial application version with only the basic feature set. Deciding which features you will include in your MVP will require planning, though. Implement the features that will have the most impact while being the least financially expensive. Your goal at this point is to convince your investors.

• Step: 5. Test and Implement Changes

After you release an MVP, collect feedback. The best way to do it is to ask users directly what they like or dislike about your product. At this point, making changes to an app feature set or architecture will be relatively easy and not as painstaking as during further steps. The target group you choose for proof-of-concept testing could later become early adopters of your app.

• Step: 6. Start the End Product Development

This is the phase when your app development team starts coding, using the chosen programming language, toolsets, and frameworks. The use of agile methodologies like Scrum, Kanban, or Extreme Programming, will streamline and accelerate the development while sticking to the specification guidelines and ensuring quality.

Today’s best practices suggest integrating QA testing into every stage of software development. Also, stay in contact with your dedicated development team over the course of implementing your SaaS app idea. Your goal is to constantly check if you stay on the same page and are correctly following product specifications.

• Step: 7. Promotion

We are listing promotion as a separate step, while in reality, it should unfold simultaneously with building your SaaS app. By the time your first release hits the web stores, you should already have a community of fans waiting for the final version.

• Step: 8. Release and Maintenance

Your SaaS platform or web service is ready for release as soon as you have completed all phases of QA testing. However, you’re not fully done with QA just yet: user acceptance testing will be the final stage of the quality assurance process and will take place after you publish your app.

After the final release, your SaaS developers will have to provide ongoing maintenance and application updates. Your users should be able to easily access tech support if issues arise.

The above software development steps are smooth and consistent. Yet, they by no means eliminate the tech difficulties. The common challenges in cloud-based apps development include:

• Multi-Tenancy

The software you build will serve multiple customers. Regardless of the kinds of applications developed, cloud-based SaaS architecture should include multi-tenancy. You will also have to impose measures preventing customers (tenants) from accessing other customers’ data.

• Customization

When building SaaS apps for different types of businesses and user categories, think about making them flexible and configurable for different user needs from the very start. Users should be able to customize the app for a maximum personalized experience.

• Scalability

The web application you build should scale on-demand to accommodate more users or increase workloads – preferably with zero outages and disruptions. Top-notch scalability is a must for enterprises that can afford zero downtime.

• Connectability

The app you build should include APIs enabling any third-party developer to connect it to any other platform or service used by the organization. Your SaaS platform is likely to be used with other apps and systems, so it’s important to include connectivity into its architecture as you start development.

Ensuring scalability, security, and integration in a cloud environment is a tricky task, so do approach a choice of a cloud infrastructure provider carefully and responsibly. Apart from a cloud provider, it is also recommended to approach the choice of your tech stack with the utmost consideration.

Costs to Build a SaaS Application

Software development involves expenses, and building cloud-based platforms and services are no exception. To estimate how much exactly it will cost to build a SaaS app, consider its complexity and the hourly rates of your SaaS developers.

Put simply, the more features your product includes, the more time it will take to implement them.

To create apps as complex as Slack, developers will have to allocate over 2600 hours of work, including iOS, Android, and UI/UX development. So the development time may take more than a year.

Based on the information from such platforms as Clutch or GoodFirms, the average development hourly rates fall into the range of $50 to $120. This, in turn, is reflected in the total development cost of a Slack-like app: $130,000 – $312,000.

Of course, the final calculation will also depend on the qualifications of the developers involved in your project. The junior developer’s rate will be considerably lower than that of a senior developer.

Conclusions

The SaaS development looks highly attractive for both companies and individuals: ease of entry, flexible pricing, and excellent accessibility make users choose web-based tools and services over traditional software. The prospects of building cloud-based solutions look brighter than ever, yet, there are many challenges and pitfalls associated with web app development.

One of these challenges is the heightened demand for relevant high-tech expertise. To build cloud-based services and platforms, you need an app development team proficient in web development and experience in creating cloud-based solutions. To strike a delicate balance between pricing and quality, consider hiring a reliable external SaaS development company to help you build a SaaS product that fully meets your business objectives.