SaaS Development Cost

How Much Does it Cost to Build a SaaS Product in 2024

SaaS stands for Software as a Service. Therefore, SaaS is a software distribution model that provides application hosting services through a third party. The hosted applications are then made accessible to a wide range of customers over the internet. In the field of cloud computing, there are some associate categories, and these involve IaaS (infrastructure as a service), PaaS (Platform as a Service) and SaaS itself.  Therefore, SaaS plays a significant role as part of cloud computing.

Software as a service works well basing on the fact that it can relate to the services provided by demanding software delivery models as well as application service providers. The similarity between SaaS and ASP comes in where both models host the customer’s software and present the software to approved end-users over the internet.

Considering the software on-demand SaaS model, customers are provided with network-based applications developed with the aim of SaaS distribution. In this case, the source code used in developing the app is similar all through. Therefore, when the roll-out of new features and functionalities take place, all customers utilizing the same are guaranteed to be updated. The storage of customer data relies on the service level agreement. It entails local storage, cloud storage, or both.

how to develop saas

A number of institutions have the capabilities of integrating other software using APIs. Examples of SaaS applications include sales management, customer relationship management, email, human resource management, among others.

Other leading companies are on the verge of providing the best of SaaS. These include Oracle, Microsoft, Intuit, among many more.

Also read: difference between PaaS, IaaS and SaaS

SaaS products are utilized by many people ranging from business users to IT specialists. Just like any other thing, SaaS has the better side and the worse side. Some of the advantages and disadvantages are as highlighted below.

Advantages of SaaS

With SaaS customers, users or organizations face fewer processes of having to install applications on their computers. With this, the extra costs incurred during software licensing, installation and support, hardware acquisition, and maintenance are all eliminated. SaaS model is also advantageous in the case that it allows the following:

  • Flexible payments

There is a lot of flexibility when it comes to payments. What usually happens is that customers have to subscribe to a SaaS offering. After these subscriptions, the pay for this service periodically using the pay-as-you-go model. With SaaS, all users can terminate offering anytime to stop any recurring costs.

  • Scalable usage

There is greater scalability with the use of cloud services like SaaS. Associated customers can choose the number of services they require. They can opt for more or fewer services depending on their own decision.

  • Automatic updates

This is quite advantageous as the cost of purchasing new software is completely cut off. SaaS providers take care of automatic updates as well as software patches that may arise during the period of customer usage. Additionally, in-house IT staff is also reduced by a great deal.

  • Accessibility and persistence

The SaaS products or applications are available anytime and from anywhere over the internet. This makes things easier for customers.

Disadvantages of SaaS

The use of SaaS is also enveloped with some shortcomings. One of the disadvantages of SaaS is the reliance on outside vendors. Many businesses or co-operations will frequently tend to rely on external sources for the provision of the software itself, functionality, maintenance, monitoring, and providing an accurate report of all billings as well as securing business’ data from malicious activities. Consider an instance where a critical issue arises when providers experience service disruptions. This imposes challenges, especially when there are changes in service offerings. These issues can be proactively mitigated through a proper understanding of the SaaS provider’s service level agreement.

Costs to Consider Before Starting Development

Before bringing a software product to the market, there are some considerations you should make. Going straight into software development is likely going to prevent you from exploring the essential aspects of SaaS cost structure. A long time ago, developers would come up with platforms, and after that transpose, codes to suit different environments. The cost of development of a SaaS will often be encountered by a set of factors that are quite key when they are kept in mind.

Before coming up with a SaaS, it is more important to consider that something of a significant impact is being set up. Think from a real-world point of view. In the building industry, there are lots of structures being developed. Comparing to software development, code elements associated with the system can sometimes be wrongly interpreted to building materials. But this is wrong when it comes to software development. All the components used in software development can simply be attributed to the target persons who are the end-users.

Your end-users are the critical factor that determines whether you will come up with a powerful masterpiece of SaaS or not. This can be achieved by involving a high level of expert knowledge from trained and experienced professionals. Additionally, always keep your team in mind when desiring to come up with an everlasting piece of software. The team is of much essence as it incorporates several ideas that cannot be handled on personal grounds.

The scope of a SaaS should be identified before the development of SaaS and the determination of its costs.

SaaS Product Development Costs

saas software development costs

We are going to explore a detailed guide to determine the costs of SaaS product development in this section. SaaS development costs require that you have a strong and reliable backup team that can provide you with the best.

The cost of product development doesn’t come with a blind view of the period within which the actual development is to take place.

Let us now get set to estimate the general costs that accompany the development of a SaaS product. The expenses of SaaS product development are not just confined to the actual coding. It is something much more than that. In most cases, costs in the form of money will always be spent on the desired staff. These costs change according to the kind of team conducting the development of the SaaS. Most experienced staff will charge huge costs. The number of staff also plays an essential role. The higher the number, the higher the costs, and vice versa.

Determination of the period for the completion of the SaaS product will guarantee you to start calculating the costs to be issued to employees. You can do this by multiplying the amount of time by the hourly rate of all your employees. It is, therefore, evident that the cost estimates are to be determined relative to the period spent on every procedure or step. These steps include; validation, planning, UX design, and project management.

SaaS Product Development can costs as low as $5000 US to as high as $70,000 US and beyond, it all depends on what you are trying to build at Aalpha information systems.

Did you know? As per the reports by 2028 the global SaaS market size is anticipated to reach USD 344.3 bn.


This step is vital as it acts as the determinant of whether other people will opt to purchase your software or not. It is, therefore, essential to prioritize this stage well to ensure that all is done perfectly well. In the validation process, you will need to do thorough research to determine all the competitors. Also, explore the possible areas you can get complaints as well as visit business owners whom you anticipate to be your customers and determine their preferences. To validate your concept, you will encounter lots of ways. The niche you go for will always impact the course validation you go for. The stage takes at least ten hours, depending on the number of elements to be incorporated in the final product. The customer acquisition process is also featured in this stage.


It is always clear that a project well planned brings out an assurance of an even smoother process. In this step, there should be confirmation of all goals associated with your project. After performing this procedure, establish the most efficient way to meet all these goals using a more experienced architect. The planning process will take you a whole thirty and more hours. The amount of time should not surprise you. Planning isn’t just any simple process you can think of. Projects require that you take a considerable amount of time in the planning stage to incur less costs. The phase is crucial when determining your SaaS product development cost.

UX Design

A precise examination of this stage depicts some form of extension from the planning step. When a considerable SaaS effort is directed towards user comfortability, then everything will seem easier and better.  This requires extensive preparations and a high level of innovativeness. As initially covered in the validation step, you are likely to understand the preferences of users. This can be a useful guide in coming up with a wonderful UX design.

Project Management

Project management requires that you seek an experienced project manager. He is the coordinator who is responsible for any issue arising from any area of the project. It takes a considerable amount of time, depending on the sharpness of associated designers and developers. You, therefore, need to have a powerful team that won’t let you down when it comes to project management.

SaaS App Development Cost based on Complexity

One of the SaaS app development costs is the nature of the app. An app with a lot of features and roles will definitely cost more. For instance, if an app requires customization, payment gateway integration, access control, high-end data protection, and scalability can make app development costs escalate because the developers will take more time and face difficulties along the app development journey.

Besides, some extra features such as high-end data protection require experts. As much as you want your app to be free from all forms of threats, you must hire an expert, and this call for more costs. What’s more, a well-secured SaaS app will require continuous monitoring, which means sending more on the same.

As for businesses, many will opt for product customization, making their products and services unique in a special way. This, therefore, means that developers have to build everything from scratch, thus more costs and long working hours for developers.

Note: While the complexity of an app plays a significant role in determining the costs of a SaaS app, some apps differ in varied ways. For instance, one app may require technical functionalities with several integrations while another app may require basic features but complex functionalities.

Therefore, it’s quite hard to define complexity in relation to SaaS app development costs. Nonetheless, it is okay to say that long working hours mean the app is more complex, thus higher development costs.

With that said, SaaS app can be divided into:

Level of Complexity

Approximate Costs

Micro SaaS


Basic SaaS


Average SaaS


Complex SaaS


SaaS Development Costs based on Stages of Development

App developers must take the app through different stages or phases until they achieve the final product that meets the client’s requirements. The more stages or phases, the more the costs because every phase comes with specific costs and the required timeframe.

Here is a better analysis of different app development costs for varied stages.

Stage of Development

Average Hours

Approximate Prices

Validation & Planning

30 to 200

$30,000-$75,000 (MVP)

MVP Creation

250 to 300

$30,000-$70,000 (MVP)

UI/UX Design

100 to 220



350 to 550



650 to 850


Costs based on SaaS solution type

Prices of developing SaaS applications also vary depending on the solution it has to offer. Some SaaS solutions require improved features that are costly while some SaaS apps require basic features which is manageable and cost developers less time to accomplish the project.

Below is a summary of SaaS costs based on the solution the app has to offer.

SaaS Solution Type

SaaS MVP Approximate Costs








Email Marketing









Project Management



Visual Website Builder



Costs based on the app development team

The team handling a SaaS app development project plays a crucial role in determining the final costs of the whole project. For instance, a local agency from the UK will be expensive compared to an option of outsourcing top talents from South Asia.

Based on your target goal, you can opt for a team that will help you save costs. For instance, hiring freelancers who specialize in specific fields such as operation, app development, or design can help you save costs compared to hiring in-house experts.

Note: different types of teams have their pros and cons. As a client, you simply need to weigh the available options, review your goals, then select a team that will help you fulfill the target objective.

A summary of SaaS app development cost based on the teams can be summarized as below:

Team Type's

Approximate Costs



Local Agency




Outsourcing Agency


SaaS app development cost based on geographical location

The country of origin of the development teams or talents determines the costings of a SaaS app, even if the features and functionalities are the same. Below is a breakdown of SaaS app development costs based on the region of the teams or talents.

Geographical Location

Approximate Pricing





Eastern Europe


Western Europe         




South Asia               


Factors that determine the average SaaS app development prices

You may wonder why there could be price variations when developing a SaaS app, even though the final results may remain the same. Below are some of the determinants:

  • Business logic

These are simply the processes developers take when developing a SaaS app. Business logic also comprises the reason for creating the app and how the app will solve the existing problems that are facing the targeted clients. Business logic is the main determinant of building the app and deciding the features and functionalities to include during the SaaS development processes.

Therefore, the business logic includes the app’s size, the number of external integrations, the total number of team members, the complexity of the app, and the required technology stacks for back & front-end developments.

  • Application Architecture

Application architecture is all about the interactions and arrangements on different setups based on business goals and technical needs. Elements such as multi-tenancy, scalability, and the number of API integrations are some of the application architectures that developers have to consider.

Therefore, a more complex application architecture means more costs for SaaS-based products.

  • Features

Of course, the type and number of features a SaaS product require determines the final costs of the app. Therefore, it is crucial for the SaaS app development team to figure out and list all the features and functionalities required before starting the development process to ensure the final product matches the total costs.

Some of the must-have SaaS app features include billing & account management, analytical tools, communication, and security.

  • Platform

You can choose a platform you want when developing a SaaS app, just like when developing another application. You only need to figure out if the clients will be using desktops or laptops as in the case of B2B establishments or if your clients will be using smartphones as in the case of B2C establishments. Therefore, the UX/UI changes while the contents remain the same, thus affecting the cost changes for a SaaS app.

  • SaaS product Scope

Before developing a SaaS product, you must, first of all, define the scope of the project. This will help you know if the SaaS app will be a tool or a platform based on the required features. Once you determine it the product will be a tool or a platform, you can now determine the time required to finish the development process, and this determines the costs of the whole project.

  • API integration

It is the role of the development team to decide how to start and finish the whole project. For instance, developing the whole of the backend to enhance third-party integrations or high-level customization. APIs meant for standard functionalities such as login, subscription, and payments can save more costs.

Besides, API integration has different methods that simplify operations including creating, reading, updating, and deleting (CRUD). Through these functionalities, it is easy for developers to access and manage data via RESTful APIs.

Note: While API integration proves beneficial when developing SaaS-based apps, it is significant that developers use best practices such as managing scalability issues, auditing frequently to improve security, selecting the best and most reliable APIs, and reviewing documentation, among others. However, these best practices require knowledgeable experts to take every step in the right direction and this can impact the total pricing.


Cost estimation for SaaS product development is not simple; it might be thought of. Develop a team of experts who are in for the best when it comes to handling the cost estimation for SaaS products. You will then achieve the best out of your SaaS projects.

Also read: mobile app development cost in India | software development costs


Written by:

Stuti Dhruv

Stuti Dhruv is a Senior Consultant at Aalpha Information Systems, specializing in pre-sales and advising clients on the latest technology trends. With years of experience in the IT industry, she helps businesses harness the power of technology for growth and success.

Stuti Dhruv is a Senior Consultant at Aalpha Information Systems, specializing in pre-sales and advising clients on the latest technology trends. With years of experience in the IT industry, she helps businesses harness the power of technology for growth and success.