Software-as-a-service which is more popularly known by its acronym SaaS is a paradigm redefining technology that has brought about a veritable revolution in the manner in which businesses function. It has transformed everything from the way businesses go about working, communicating, carrying out their tasks and implementing processes that span the globe. From Google Workspace, Adobe, Slack and Microsoft to Hubspot, Zoom, Asana, Blackboard and others-a slew of new-age businesses have gone ahead and leveraged the power of SaaS to obtain spectacular results.
The popularity of SaaS derives from its ability to help reduce a business’s IT budget by the simple expedient of doing away with or substantially reducing the costs entailed for the deployment, configuration and implementation of IT resources. It makes much better sense for businesses across the scale to use SaaS to both make their business operations run smoothly and scale them up tremendously
The growth of the SaaS products industry has been nothing short of astronomical considering that it is expected to notch up a whopping $208 billion in customer spending by the end of 2023. What’s more, the adoption of SaaS has been universal with everybody ranging from start-ups and small-size businesses to large enterprises lining up to implement SaaS solutions within their systems.
The purpose of writing this guide is to provide a business organization with a step-by-step tour of the SaaS development process. It seeks to inform you about everything you need to know about developing and launching a successful SaaS application right from identifying a problem to be remedied to the marketing and selling of your product. The guide gives you a lowdown on everything a business organization should know about both the SaaS application development process and entering the market. It will help you understand and overcome the challenges, capitalize on the opportunities, understand the development process and know about the cost of building software.
But first things first. Let us find out what SaaS is essentially and what it accomplishes
What is SaaS All About?
SaaS may be defined as a method of offering and delivering applications over the internet in the shape of a service, as opposed to installing software. You no longer need to maintain that software and its accompanying hardware, and can instead conveniently access it over the internet. According to leading consulting company Gartner, “Software as a service (SaaS) is software that is owned, delivered and managed remotely by one or more providers. The provider delivers software based on one set of common code and data definitions that is consumed in a one-to-many model by all contracted customers at any time on a pay-for-use basis or as a subscription based on use metrics.”
SaaS applications may also be referred to as Web-based software, hosted software or even on-demand software. What defines such an application is the fact that these run on the servers of a SaaS provider who is responsible for everything from access to the application and its availability to its performance and security.
The sheer accessibility, convenience and ease of use of SaaS applications have ensured their widespread deployment across a range of businesses and industries. Let us look at some of the best-known SaaS products that have become part of our daily lives-
- Google Workspace
Why use a SaaS Application
Unlike offline software which needs to be purchased to be used, SaaS products require you to pay a subscription fee for the period for which you want to use it. A good analogy for this would be the difference between buying a house and renting a house. A SaaS application is primed for use with the maintenance being handled by the service provider, just like the maintenance of a rented house is handled by the landlord. As SaaS software products are hosted on the cloud, these can be conveniently accessed over the internet and the users don’t need to invest in any hardware, much like a tenant getting to use a house that already exists. The service provider on their part manages access to features under the subscription model chosen and also takes care of the updates and maintenance.
A free-to-use email service like the ones provided by Gmail or Microsoft Outlook is a good example of this in the sense that while we can send and receive emails, via the Internet, the servers are hosted by the email service providers in question. Much like the perennial debate about which is better renting or buying a home, one may well ask if it is worth a business’s while to opt for a SaaS application when offline software works just as fine. The fact of the matter however is that SaaS is a clear winner when it comes to the sheer number of advantages that accrue to a business that deploys it. Let us look at some of the principle ones:
Easy Friendly with Proof-of-concept Feature
Software as a Service (SaaS) is quite easy to use on account of the fact that it boasts tried and tested best practices and samples. It enables users to carry out proof-of-concepts and even check out software functionality or a new release feature to see how effective it is. Besides, you can have several instances with different versions. What’s more you are enabled to carry out a smooth migration as well. This is true even for large businesses who too can use SaaS that can be tested and tried out before buying and deploying.
A Reduction in Costs
SaaS leads to a reduction in costs on account of its multi-tenant nature with its lower hardware as well as software license costs. Besides, the ability to quickly scale one’s customer base owing to small and medium businesses gaining access to software they would never have been able to afford under normal circumstances is a great advantage of deploying SaaS. To top it all maintenance costs are low too as these are shared amongst all the businesses who use it.
You Can Scale Up and Integrate
As SaaS solutions are cloud-based, these are scalable and capable of integrating with other SaaS offerings. That means that there is no need for a business to invest in another server or new software as is the case with the conventional way of doing things. All that one needs to do is to enable the new SaaS function with regard to the server capacity, which the SaaS provider owns. What’s more one can scale up or scale down one’s use of SaaS according to one’s requirements.
Easy and Convenient Upgrades
When it comes to SaaS, the onus of providing upgrades is on the provider, thereby considerably reducing the costs as well as the effort required at the time of a new release. This is because you are not required to buy an upgrade package, which you then need to install in the case of conventional software.
Better Data Security
SaaS enables customers to back up their data on internet servers and access it from multiple devices. Cloud technology enables the provision of high quality data security solutions to clients. Multi-factor authentication and anti-phishing programs are good examples of this. In fact, many SaaS products come with security guarantees and back-ups.
Larger Customer Base
The very intrinsic nature of SaaS apps makes them amenable to growing the customer base of a business on account of lower costs and shorter trial periods. If this isn’t a compelling argument for businesses, especially the smaller ones to go ahead and adopt SaaS, then nothing is.
Types of SaaS Applications
Now that we have some idea about what SaaS is and can accomplish, let us get into the nitty-gritty of things and find out what there is to know about the different types of SaaS applications out there-
SaaS applications that enable a business to go online are becoming increasingly popular. Amongst the functions performed by such software are product management and payment integrations. BigCommerce and Shopify are examples of this kind of eCommerce software. SaaS for eCommerce solutions empowers e-sellers to save big when it comes to infrastructure setup and maintenance costs. It helps them start a digital store in no time and very effectively manage things like product catalogues, pricing, order and payment processing as well as customer relationships. It is not surprising that the SaaS for eCommerce market is expected to grow to a gargantuan $16592.35 billion by 2031, growing at a CAGR of 15.32%.
SaaS Based Customer Relationship Management (CRM)
SaaS-based CRM systems help a business manage customer data and operations on behalf of eCommerce businesses of both B2B and B2C segments. This is akin to what Salesforce does. Other good examples of major SaaS-based CRM players are Microsoft Dynamics, Zoho CRM, Pipedrive and HubSpot. A CRM system helps a business to create deeper customer relationships and obtain keen customer insights. That makes them critical for any business’s workflow. Businesses that deploy CRM can leverage customer data like their customers buying patterns to create customized marketing strategies. CRM is known to boost conversion rate by 300% and any business would do well to deploy it and see their bottom line improve exponentially.
Accounting SaaS is known to provide an efficient and economical way of managing accounting processes and works brilliantly for small to medium-sized businesses. The most well-known accounting SaaS players are Zoho Books, FreshBooks, Xero, Sage 50 and QuickBooks. A good example of what accounting SaaS can accomplish is in the shape of automatic invoicing reminders or arranging for bank accounts to be set up for quick and easy payment of bills. Accounting SaaS helps put the financial needs of a business in perspective, even as it provides them with the data necessary for making more informed decisions that take them closer to their goals.
Content Management System (CMS) SaaS
A CMS helps individual content creators and businesses across the scale to efficiently and effectively manage the handling of content in the shape of text, images, videos and audio files. CMS steps up to the plate when it comes to the creation and management of web pages professionally and efficiently. As CMS requires minimal coding skills, it can be leveraged by anyone possessing minimal technical skills.
Besides, CMS provides multiple functionalities like user access levels, permission controls, automated backups, analytics tracking and so on, making content management that much more streamlined. The best known CMS SaaS providers are Joomal, WordPress, Drupal, Magento and Shopify
Enterprise Resource Planning (ERP) SaaS
ERPs are a SaaS tool par excellence that helps businesses across the scale manage their business processes in a highly efficient and organized manner. It enables them to streamline a host of processes like operations scheduling, inventory management, order management, financial accounting and enterprise management. This is something right up the street of major ERP players like Oracle, Microsoft Dynamics, AAP, Infor and Workday. One does not, therefore, find it surprising that SaaS applications make up 70% of total software used by a company.
Billing and Accounting
Billing and accounting SaaS applications comprise flexible subscription packages that allow a business or a company to choose the one just right for them in terms of their scale. These help streamline the billing and accounting process of a business in a very comprehensive way.
SaaS helps run communication tools like Slack which can be subscribed to according to team size and scale up and down accordingly.
Several well-known SaaS-powered project management tools help businesses across the scale collaborate. The most well-known of these are ClickUp and Jira.
The Architecture of SaaS Application
There are several ways that one can look at SaaS application development architecture: Let us look at what these might be:
Single-tenancy, as the name implies involves every user accessing their individual model of SaaS. Its principal advantage is the fact that it is quite secure, but requires more effort with regard to maintenance.
Multi-tenant SaaS comes into play when a single architecture powers many customers even while every data tenant is isolated and kept secure vis-à-vis other tenants. You can approach SaaS multi-tenancy in two ways.
–Single app- Single Database: This involves all on-cloud users accessing the same database making it easy to deploy, but difficult to scale up.
–Single app- Multiple Database: In this instance every database is utilized to a certain extent after which it redirects new users to another database. This allows the users to access more by way of resources, making the software more nimble. It is more expensive to implement though.
Horizontal SaaS apps are quite popular across industries. A good example of these are marketing and accounting apps that businesses across industries use quite a lot. Microsoft 365 is the most prominent example of Horizontal SaaS. Another good example of Horizontal SaaS would be Salesforce the CRM software maker par excellence.
Vertical SaaS apps are tuned to the needs of specific business verticals. These comprise advanced features especially suited to different user segments. Riskalyze, the growth platform for wealth management platforms is a great example of a Vertical SaaS company, as is the insurance agency management software Applied Epic.
Good read: Vertical SaaS vs Horizontal SaaS
What you need to know about SaaS Development Platform special characteristics
SaaS-based applications are all about a holistic experience and for that to occur, these applications need to be built quite differently from say regular online services and platforms. Let us look at what the defining characteristics of SaaS apps are:
- Single or multi-tenancy
- Super flexibility
- User-friendly UI
- Data security
- Automatic updates
- Easy availability
- Scalable infrastructure
Factors needed to be taken into account in SaaS development
There are a few technical as well as non-technical factors to be taken into account with regard to the building of a SaaS application.
These are basic building blocks. Databases need to be comprehensive and flexible, even as they are secure. At the same time, these need to be in tune with a business’s objectives. The choice of a database type depends on things like the nature of the data, the kind of scalability required, the anticipated load, the programming language deployed and the budget.
It is very important to ensure that scalability is a part of your SaaS development process right from the start. The application needs to be able to scale both vertically and horizontally to enable expansion that aligns with your business’s trajectory. A SaaS application needs to be designed with adequate scope for scalability given that businesses grow and evolve.
It is critically important to update a SaaS solution on the basis of user feedback to ensure that it continues to remain useful and capable of meeting changes in the operating environment as well as evolving needs. Updates such as these involve adding new features, improving functionality and fixing bugs or security issues. Enabling a seamless, unobtrusive and secure user experience is something that calls for regular updates.
A SaaS system needs to possess the ability to integrate with third-party applications, as that helps improve the user experience on account of the additional functionalities and smoother workflows it offers. Third-party integrations go a long way in facilitating data exchange, enhancing interoperability and making a SaaS app’s abilities way more versatile and capable of serving the needs of a much wider user base.
The performance of a SaaS app determines how its users rate it. An application that has excellent load times is able to optimally utilize resources and is reliable on a consistent basis will be able to lead to higher user engagement and retention. This requires that its architecture should be such that it can easily handle peak load ensuring that the application is up to scratch even when the demand is quite high.
Considering the wide array of critical functions performed by SaaS applications, security is of utmost importance. According to Thales Group, encryption-related worries are the biggest SaaS-related security concern. This requires the deployment of rigorous security protocols including data encryption, secure authentication as well as regular security audits. SaaS app security is fundamental to the success of a SaaS application, as protecting user data lies at the core of earning and maintaining the trust of clients. It, therefore, follows that taking care of security considerations and implications should form a very important part of the SaaS app development process, as it helps address possible vulnerabilities as well as relevant compliance issues.
A good SaaS app provides its users with the wherewithal to customize as well as configure it as per specific needs and requirements, in the process helping substantially enhance user satisfaction. This is on account of the ability to provide a more customized experience that speaks to diverse business and user requirements.
A user interface that is designed to be intuitive creates a great impression and leads to higher adoption and retention. A user-friendly application that is also visually pleasing helps users interact efficiently and seamlessly with the application’s features.
Prior to going ahead with SaaS application development, it makes eminent sense to determine if there is a requirement for such a solution in the market. One should carry out research to ascertain if there is sufficient demand for such an application. That will help in pitching the solution to its intended users in the best possible way, by devising the right kind of outreach strategy. This will in turn help you forestall a scenario, where you have invested time and resources in a SaaS app with hardly any demand for it.
Client Acquisition Strategy
The whole point behind creating a SaaS application is that its users get value from it. That means that it is imperative that it be created in a manner that makes it intuitive, visually attractive and targeted to the people who need it. What’s more, you should be able to put a subscription lifecycle in place that leads to a long-term association with the users in question.
Diversified Subscription Plan
One should offer diversified subscription plans to ensure that one’s SaaS app is able to meet the needs of a larger target audience. The more flexible the offerings the more amenable these are to clients with varied budgets and needs ranging from start-ups to large enterprises.
Customer Feedback and Support
Outstanding customer service largely defines the success of a SaaS application, and it, therefore, makes sense to ensure that users are provided with prompt and stellar customer support. Doing that helps enhance their usage experience, even as it helps satisfy their expectations. It makes great sense to engage with them with regard to modifications and any updates that they may require. This helps you in bonding with your user base collectively. Refining your app on an ongoing basis with the help of user insights leads to the best solutions for one’s market.
Providing comprehensive instructional content as well as all the necessary documentation empowers the users to fully leverage the capabilities of the SaaS app in question.
Building a SaaS App Step-by-Step
Now that we have a fair idea about what SaaS in terms of what it entails and what it comprises, let us take a look at the cloud-based SaaS app-building process in detail:
A SaaS design is not really all that different from a conventional design solution in the sense that it too requires you to develop a well-defined and intuitive UI capable of performing its designated functions in the best possible manner. What is important to note is that mobile-first SaaS is the way to go forward since as many as 87% of companies prefer their employees to access their business apps via their smartphones.
Choosing the Right Tech Stack
Zeroing in on the right SaaS tech stack is the most significant step when it comes to SaaS software development. Let us check out the most popular technologies deployed for SaaS software development:
LAMP is an acronym for Linux, Apache, MySQL and PHP and is a very highly regarded open-source web development stack that can be successfully deployed to develop both web applications and SaaS mobile apps. Using LAMO for SaaS mobile app development is a very good idea as it is quite effective to do so. Besides, it is quite scalable and flexible, apart from being very secure. Using LAMP is quite economical too.
Among the tips for effectively using LAMP for SaaS mobile app development is the use of a cloud-based hosting provider to set up the stack and using a security plugin to improve the performance of the SaaS mobile app in question.
.NET is one of the most in use open-source software development frameworks when it comes to developing a range of applications including SaaS mobile apps. Using .NET to develop SaaS mobile apps is quite advantageous, as it can be deployed across multiple platforms like iOS, Android and Windows. Moreover this is a secure, scalable and high performance framework helping create very quick and responsive SaaS apps. .NET is a great option for developing SaaS mobile apps for businesses seeking a cross-platform, high performance, secure and scalable solutions. Trello, Evernote and Xamarin are some prominent examples of SaaS mobile apps built on .NET.
Flutter is an open source UI toolkit that has been very successfully used to develop SaaS mobile apps for both iOS and Andriod devices from a single codebase. What is great about using this technology is that it enables cross-platform development helping you save money as you don’t need to access separate platforms to develop every platform. Furthermore since these apps are natively compiled they boast stellar performance which is perfect for SaaS mobile apps which are expected to be responsive and fast. Google Pay, Alibaba and Flutter are some very notable examples of popular SaaS apps that were built on Flutter.
Paying attention to engineering
Engineering constitutes the most important component of SaaS software development. Creating a SaaS app from the very beginning needs a lot of time and a team of experts comprising people with varying core competencies and expertise.
The fact that there would be alterations required to be made to the software ranging from scaling and performance improvement to better security and operational flexibility requires that the software data be divided into separate data stores or partitions. Doing so makes it more convenient to manage each partition individually without having to deal with the entire database. There exist varying kinds of partitioning strategies like horizontal, vertical and horizontal, each of which offers its own sets of advantages.
You have to comprehensively test SaaS software to ensure that it is up to scratch when it comes to meeting your users’ requirements both at the time of its release and afterwards. The idea is to have as few bugs in it as possible. The best way to do that is to test it manually as well as in an automated fashion to be able to provide the right kind of quality assurance. Apart from that, beta testers can be deployed to zero in on even the most non-descript use cases. Cloud security is also something you should be looking at.
Deployment is the culmination of the SaaS application development process. It is the stage at which the final product is ready to be released. It, however, makes sense to get an idea about how the first users react to it and find out whether any steps need to be taken to improve or modify the product.
A SaaS application is typically deployed on a public cloud infrastructure by a SaaS provider. This involves aligning the necessary resources in the shape of databases virtual machines, the necessary security measures and so on. This can be achieved with the help of serve-less computing. Alternatively, one may use containerization to enhance scalability and better performance.
Software development is the most crucial part of the SaaS app development process. One should ensure that everything is in order, so as to enable users to use the software in question the way it is meant to be. They should be easily able to access the necessary documentation and customer support right at the outset. That means that the deployment has to be automated in a very smooth, organized and orderly manner. The software updates should be provided in real-time to ensure smooth functioning at all times. An automated update system imparts speed and flexibility allowing you to deploy many small changes simultaneously instead of putting the system on hold every now and then for large updates.
Managing and Optimizing
It is critically important for your SaaS product to provide outstanding service and business value to clients. Once the product has been comprehensively tested and launched, it needs to be managed and monitored so that its performance is up to the customers’ expectations. This would require your product to be nimble and flexible enough to cope with the latter’s evolving requirements. It makes sense for you to look out for any security issues, iron out any user experience issues as well as ensure that your app is scalable.
On-Premise to Cloud Migration
If your SaaS development framework is not cloud-based from the very beginning, you would be required to move it from on-premise to the cloud. There are myriad migration options to look at after taking into consideration things like the amount of data involved, and the kind of downtime that may be required. These include Physical to Virtual, Physical to Cloud, Virtual to Virtual and Virtual to Cloud.
Challenges to the SaaS App Development Process
If you carry out the SaaS development process the right way by adhering to the core principles of Agile and LEAN development parameters, you should have a fine product on your hands. Even so, there may be a few challenges that may come your way, that you need to overcome. Let us look at what these might be-
Fulfilling the expectations of the customers to the T
The principal challenge to successful SaaS app development is to be able to create a product that is fully capable of satisfying your customers in terms of their ever-changing needs and expectations. The best way to deal with this is to be on the same page with them right from the outset. It would help to carry out the necessary research with regard to their requirements and expectations. This will ensure that your product conceptualization is proceeding along the right path. The ability to keep your customers’ expectations in mind when devising a SaaS product you will have vested it with the ability to address their very specific pain points. After all that is the whole point behind their going for a SaaS app.
Choosing a technology that is just right for the project
Scalability which is a crucial aspect of any successful SaaS application can be imparted successfully only with the help of the right technology. It, therefore, makes eminent sense to work with a SaaS development vendor to zero in on the best possible tech stack to be deployed.
Hiring the right development team
An understanding of the needs of the client lies at the heart of SaaS application development. It is, therefore, very important that every member of the team be on the same page with regard to that. Every specific detail of the projects, its short-term and long-term objectives as well as its ability to scale up and down should be made available to and understood by them. It, therefore, makes sense to hire the right SaaS development company with the necessary experience in SaaS app building. It would be a bonus if they were a very committed lot when it comes to resolving the issues of clients by creating incredibly good SaaS solutions.
Who Should Constitute Your SaaS Development Team Structure
The size of the team members will be decided by the kind of SaaS development project that one may be involved in, one would at the very minimum need to ensure that one has the right people for some very specific roles. Let us get a lowdown about what these are:
A business analyst is required to provide an assessment of how saleable your software is. They will help present a viable business model that could help you green-flag the project.
It is the Project Manager’s responsibility to draw out the plans pertaining to the software development projects. This entails assigning tasks and ensuring that those are carried out on time and in accordance with the requirements.
A UX/UI Designer is somebody who helps design and implement an application’s UI ensuring a great user experience. They make the app easy to use and aesthetically appealing. They also ensure that the app is in sync with your brand identity.
Back End Developer
Back End Development is carried out on the server side of a SaaS application by a Back End Developer. He is tasked with ensuring that it functions according to plan with the help of scripting languages.
Front End Developer
A QA engineer is someone who tests SaaS software for issues like any defects or bugs and notifies these for fixing by the engineers in question. If you are looking at DevOps for your SaaS project you will need the services of a DevOps engineer.
The need for specialists is decided by the project size and budget. One may, for instance, need the services of specialists like technical writers, product managers and marketing specialists who would in that case have to be incorporated into the development team.
The notion of DevOps is an amalgamation of a system of performing tasks that incorporates a work philosophy, certain practices as well as tools that help an organization deliver applications at a rapid clip, which they helps evolve and develop way faster than organizations that use traditional software development processes. This comes in very handy in the case of SaaS app development in a hyper competitive market scenario. Deployment of DevOps makes quick and continuous deliver of SaaS application unimpeded by bugs and other glitches by its innate ability to deploy code much faster, resolve problems on the fly and make improvements at a very fair clip.
DevOps also helps achieve better team collaboration, as well as the ability to monitor application performance. What’s more DevOps helps businesses not only make scalable apps but also very resilient ones by the helping automate the provisioning of resource management. Above all it allows them to be very agile and quick to respond to market changes.
How expensive is SaaS Development?
The major portion of SaaS application development is in the shape of the salaries paid to the SaaS developers and other members of the development team. In case you are utilizing the services of an in-house team, you may still want to add the costs you would incur in hiring new specialists for the project in mind. One may look at outsourcing software development as a viable and economical way of getting a SaaS app developed. That usually entails paying the engineers’ hourly compensation in addition to the vendor’s fee.
The average SaaS developer charges $60 an hour, though this rate varies with the location of the person concerned and the kind of experience they bring to the table. The typical SaaS application development cost ranges anywhere from $5,000 to $70,000 and can also exceed $200,000 in case of customized complex apps. A SaaS application of average complexity developed in India would likely cost $4500. That being stated SaaS apps in India have been known to have been made for as less as $4000.
Best Practices to Follow in SaaS App Development
Now that we know most of what there is to know about SaaS product development. Let’s look at what best practices one might follow to ensure that we come up with a top-notch SaaS app.
Having centralized operation helps the SaaS product development process immensely. This will help the user obtain access to a product that is near perfect in serving their specific needs. This kind of centralization is made possible with the help of Continuous Integration and Continuous Delivery as part of the SaaS product development in question. This kind of centralization in operations can be brought about with the help of DevOps.
No Code or Low Code Platforms
Speed is of the essence in the times that we live in and most businesses can’t wait to launch their SaaS product. No code or low code application development is the best way to create a SaaS product in double quick time, using drag-and-drop tools.
Microservices Instead of Monolithic
In a market scenario saturated with big names going with a monolithic architecture might not be the way to go when you can easily go for monolithic services. These constitute smaller parts of your SaaS product and can be put together one at a time and deployed to demonstrate your core features and none of the bells and whistles.
Minimum Viable Approach is the Best
Using the MVP approach to SaaS product development works out quite nicely on account of the fact that one can launch a product multiple times incorporating vital user feedback. Besides, your product can be launched much faster this way and will be more in consonance with what the customers desire.
Security is Paramount
Top-notch security is of the essence when it comes to building a SaaS product as it would have access to sensitive user data. A data breach of any sort could have very dire consequences. It, therefore, makes perfect sense to be in compliance with HIPAA, GDPR and the like.
SaaS organizations are well on their way to becoming an integral part of any modern business organization. With all trends indicating steady growth in SaaS-enabled organizations, it is no longer a question of whether a business organization deploys SaaS apps, but when. With the demand for collaboration software skyrocketing and Martech becoming more and more prevalent one can only expect the number of SaaS products in the market to boom.
Want to build a world-class SaaS product? Connect with us today!