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Software as a Service (SaaS) is a modern strategy that has replaced the purchase of traditional software licenses. Because of this, the SaaS delivery model has been quite popular during the past ten years.

The SaaS market is expected to reach US$172.20 billion in 2025, up from US$31.57 billion in 2015, according to research done by The Insight Partners. This market is expected to grow at a CAGR of 18.6% from 2016 to 2025.

SaaS, or Software As a Service, is a cloud-based way of delivering software via the Internet. Users don’t need to install the product locally, maintain and update it, and monitor the operation of the hardware software.

The SaaS software delivery method provides a flexible set of features that can be configured depending on user needs. It also gives access to the necessary data from any device and from any place in the world. The main thing is to have an Internet connection.

It is a modern alternative to traditional licensed software that provides access to features as a service without licenses and waiting for updates. Such programs are hosted in the cloud and use its capabilities, so they don’t need to be installed on the user’s gadget. All infrastructure, security, availability and performance parameters are maintained by the cloud computing provider.

How to Develop SaaS Applications

In many respects, SaaS application development differs from the traditional method of software development. The process of developing a SaaS app should be well planned out because it may determine how quickly your business expands.

First and foremost, you must comprehend the concept behind your project, identify your target market, and determine why they would utilize your product. You should look at competing products on the market and learn how to monetize your app.

When you think about SaaS application development, you will get plenty of both paid and free tools available in the market. Here is how to go about it.

Step 1: Ideation

The first step to developing a SaaS application is to either have an idea or explore challenges and then come up with a technological solution to resolve it.

To develop SaaS application, you first need to understand all of its functions. In fact, you must see how it will work, seem, and be used by customers. You should determine the unique feature that will help your app stand out and have an ideal reason for using the SaaS model.

Then, you need to identify who will be using your SaaS app. It’s essential to answer this question because your proposition directly relies on your buyer persona. The app can be used by different age groups and each individual may have different requirements.

Once you have identified your target audience, you must know what they want and research SaaS application development trends.

Step 2: Research SaaS Application Trends

Tracking research trends is essential to achieve success. Understanding trends can help you enhance your app and keep it significant.

  • Artificial Intelligence

Artificial Intelligence is one of the most promising trends in SaaS because of its self-learning and autonomous behavior. AI technology optimizes business processes, boosts productivity and automates repetitive tasks to support human capabilities. In business scenarios, artificial intelligence offers a high-level degree of interaction and responsiveness between technology, customers, and businesses. It has driven AI-based SaaS trends onto a new level.

Read Also: Where Can I Learn SaaS?

Assistants, including Cortana, Siri, and Alexa are the best examples of the SaaS model and depend on speech recognition and technologies. AI can disrupt the SaaS landscape in a number of ways, enhancing the key characteristics of the SaaS model. When SaaS is combined with AI skills, it allows businesses to achieve better value from their data, personalize and automate services, supplement human capacity and enhance security.

Machine Learning can be used in SaaS to automate responsiveness in customer service applications and reports, such as AI-enabled chat operations with live chatbots. It can also be used to automate the SaaS’s onboarding process.

The software can be easily used with technologies like Natural Language Processing to process human speech patterns automatically. It can be implemented across customer service functionality to address client requirements and enhance customization.

AI-enabled SaaS paces up internal operations and processes, facilitating businesses to get answers to questions rapidly, make quick predictions and speed up the overall responsiveness level.

With AI-based automation and the ability of ML to identify patterns, SaaS security is improved by the quick identification. AI-optimized SaaS applications present an opportunity for businesses to augment their internal processes with automation, enhance the level of responsiveness throughput and personalization and address customer service processes efficiently.

  • The Growing Need for API Connections

API has always been a significant part of software development for the last many years. With the introduction of SaaS solutions and adoption by the market, the need to integrate them into the current business ecosystem emerged. Some organizations may want to move all their data to the cloud platform. However, many companies would instead combine it with existing infrastructure to improve it. Earlier, SaaS providers had no complete integration solution. They used to redirect their clients to a third party for integrating the cloud solution into their existing system. It was good for the SaaS developers not to reinvent the wheel by relying on third-party APIs.

However, more and more SaaS vendors tend to offer greater integration skills instead of redirecting clients to third-parties. Therefore, if you want to invest in a cloud vendor’s services, you should ask the below questions to ensure a seamless integration:

  • Is my data secure during the integration process?
  • What capabilities is the provider providing me to integrate SaaS into my current business ecosystem?
  • Can the provider also integrate my existing legacy system?
  • Vertical SaaS

Vertical SaaS is another essential SaaS trends to watch out for in 2020. Vertical SaaS is defined as a type of Software-as-a-service cloud computing solution created for a specific industry, for example, insurance, retail or auto manufacturing.

Companies with a specific specialization are finding Vertical SaaS to be a cost-effective and industry-specific option that allows them to improve the customization of certain features. It results in more upselling opportunities and lower customer acquisition costs. 

Vertical SaaS offers the following benefits to businesses:

  • Pre-defined metrics and KPIs
    Vertical SaaS is integrated with KPIs, pre-defined metrics and analytics that businesses can use to address and evaluate long-term and daily performance and processes.
  • Enhanced Data Governance
    Vertical SaaS can address data governance processes via the inclusion of industry-specific compliance capabilities to provide the additional benefit of improved transparency.
  • Customer Intelligence
    Vertical SaaS allows businesses to obtain industry-specific customer intelligence and data that plays a significant role in getting customer-focused insights. 

Migration to PaaS

As the SaaS industry grows and innovation increases, many providers start focusing on customer retention on top of customer acquisition. In 2020, it is expected that SaaS may migrate towards the areas of PaaS – developments that enable businesses to develop custom apps as add-ons to their original services. 

Step 3: Document Your Requirements

Once you have done enough ideation and researched the market trends for your SaaS application, you need to document requirements to build an MVP. It contains the core essentials of your app that are needed to function at the most basic level. 

Writing documentation is not an easier task, you need to have a thorough understanding of what your project requires. Write the functional specification in the document or build a series of user stories. Irrespective of what approach you take, something that is common across each of the different approaches is that they entail the system requirements for each piece of functionality in the system you want to develop. 

Lack of organized requirements documentation can affect the delivery of your MVP. Therefore, take your time to ensure that the requirements to build MVP are precise and clear. If you are a non-technical person, it is better to hire a business analyst/ consultant who can help you convert your idea into technical requirements that a developer can understand. 

Step 4: MVP (Minimum Viable Product)

Another important step after documenting requirements is to build a minimum viable product. It comprises the core features required to perform at the basic level. An MVP allows you to understand if your proposed product can solve the problem for which it was created. If it gets successful in solving these tasks efficiently, it is worth to move it into development. Therefore, you can develop SaaS applications that can solve challenges better than competitors.   

When you create an MVP for your SaaS product or application, you can pick different tools/technology stack and test several approaches specifically to the selected approach. 

When selecting a technology stack to develop your SaaS MVP or product, you will need to consider various factors that may include, but are not restricted to the following:

  • How mature is the technology or programming language?
  • Does the technology support features you require?
  • Can technology be easily integrated with other products? 
  • How large is the developer resource pool?
  • Is the technology suitable for my MVP?
  • What is the roadmap for the programming language?

Step 5: Find Developers and Start Development

As you have validated your idea, documented the requirements and picked up a technology stack and programming language, the next step to consider building a SaaS platform is to find the team of SaaS development service providers who can convert your dream into reality. 

SaaS applications usually manipulate data, consume web services and provide information in the user’s web browser. Due to these characteristics, building a SaaS application requires multiple skillsets. 

You would need developers that include, but are not restricted to:

  • Front end development
  • Database queries and interaction with datasets
  • Experience with one or more javascript libraries
  • Business rules development and server-side queries

You would also require developers who have a record of developing and implementing SaaS apps at scale. You can find developers nearshore, offshore or domestically.

Once you have a SaaS development team you want to work with, you should make sure to maintain constant communication with them to clarify uncertainties in requirements and check the progress of the project. 

You should consider various essential components of your SaaS application such as the database you want to use, scalable cloud storage to deploy your app, content delivery networks and queuing systems. 

It is essential to adopt agile development practices to achieve maximum flexibility and perform thorough testing to complete building the application.

Step 6: Production and Maintenance

After the SaaS application development is completed, the next step is to deliver and deploy the SaaS application. It depends on various factors:

  • The product is well-tested. The development team has checked the quality of the final version of a SaaS application thoroughly.
  • A product is released from dev servers to production servers. 
  • After delivery, Quality Assurance Team has tested the production server. 

Cloud hosting providers, including Amazon AWS, Microsoft Azure and Google Cloud, make it easy to provision web servers that can deploy your SaaS solution. The cloud server can scale on-demand and are equipped to deal with surges in SaaS application users. 

For example, using Azure, you can quickly configure development, test and production servers that can integrate with your development pipeline and roll out automatic releases. 

The functionality of Azure allows you to auto-migrate between virtual machine instances, that can be helpful in disaster recovery or upgrade scenarios. 

DevOps can help you deploy the product quickly by reducing time-to-market the SaaS product. 

Step 7: Marketing the SaaS Application

You can execute this step even before the development of the SaaS application. It’s worth advertising your brand to generate some excitement. Gaining traction around your product prior to the building could be the key to success. For instance, Dropbox created a landing page and promoted it on Social Media that helped them obtain the email addresses of more than 70,000 people. 

Other networks that can help you market your SaaS application include, but are not limited to are:

  • Twitter
  • LinkedIn
  • Facebook
  • Instagram
  • Reddit 

The trick is to use social media channels to generate some buzz around the product and at the same time and build a mailing list that you can reach when the first version of your SaaS solution is ready.

The market for SaaS applications is emerging at a rapid pace, therefore, it is now the time to come out with a unique application idea. But you need to do proper planning and analysis before developing a SaaS application for your business.

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