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SaaS Application Development – What, Why, & How [Answered]

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Do you recall the time when you used to purchase CDs of licensed softwares and install them on your computer? It might seem like quite an endeavor back then and there’s a clear reason behind this.

Today most of the applications you employ in your daily life and professional endeavors are now a product of SaaS development.

SaaS software development has enabled businesses to offer services through cloud computing and subscription-based monetization models.

Progressing towards business growth naturally involves developing SaaS applications.

However, whether you’re transforming your current solution into SaaS or building it from the ground up, it demands a profound comprehension of SaaS intricacies, best practices in developing SaaS application, and potential pitfalls to steer clear of.

This article aims to provide valuable insights into custom SaaS platform development and outsourcing, empowering you to leverage the technical advantages of SaaS as opportunities for your business growth.

What is a SaaS Platform?

A SaaS app, short for Software-as-a-Service, refers to a cloud-based software delivery approach offering a versatile and personalized range of features to cater to various user groups’ requirements.

This enables users to access their data from any device and web browser as long as they have an Internet connection.

SaaS’s subscription-based, on-demand nature liberates your clients from installing the software locally on their devices and eliminates the necessity of upgrading hardware to support it.

Clients can conveniently access SaaS solutions through connected devices using an Internet browser or various APIs, while the software provider takes care of all maintenance responsibilities.

Usually, a third-party cloud-computing provider handles the infrastructure maintenance for the SaaS application.

The widespread popularity of SaaS apps can be attributed to their adaptability and cost-effectiveness.

By 2023, the SaaS app market is predicted to reach $208 billion, with 86% of companies exclusively relying on SaaS solutions.

Embracing the development of SaaS applications for your business and customers can serve as a future-proof strategy, offering a competitive edge that endures over time.

What is SaaS Application Development?

SaaS (Software as a Service) Application Development refers to the process of creating software applications that are delivered to users as a service over the internet.

In this model, instead of installing and maintaining the software on individual devices, users can access the application through a web browser. 

SaaS applications offer a range of benefits, including ease of access, automatic updates, scalability, and cost-effectiveness, making them a popular choice for businesses and individual users. 

During the development process, specific considerations ensure the application’s architecture, security, and user experience align with the SaaS model, allowing for flexible customization, easy scalability, and seamless access from various devices and locations.

Advantages of SaaS Applications


Some of the main advantages of a custom SaaS development include:

Benefit 1: Flexibility in Development

SaaS applications offer the flexibility to adapt your system as your needs evolve. In contrast to traditional software, where you have to wait for the developer to release updates, which can be a lengthy process taking months, SaaS allows for quicker and easier tweaks as the development process takes place in the cloud.

As a result, there’s no need to invest in additional hardware to implement such changes. On the other hand, users can access the SaaS application from anywhere with an Internet connection.

Benefit 2: Affordability

Most SaaS companies provide diverse price plans, allowing you to begin with a smaller package and expand as your business flourishes.

The primary objective is to precisely customize the feature set for each subscription plan based on the users’ requirements and establish a reasonable price that aligns with the specific market.

Benefit 3: Sales Predictability

Adopting software as a service for external use can enhance the predictability of your sales volume and profit.

This is because users either opt for a month-to-month subscription or pay for an annual subscription in a single installment, providing a more stable revenue stream.

Benefit 4: Performance

In traditional software development, performance bottlenecks can arise from slow response times or delays when accessing data from remote servers.

However, SaaS applications operate on a centralized server, eliminating any lag time in communication between users and the system. As a result, SaaS applications offer smoother and more seamless interactions without performance hindrances.

Difference between B/W SaaS and Web Applications

While all SaaS products fall under the category of web applications, it is essential to note that not all web applications follow the SaaS model. Now, let’s examine the comparison spreadsheet to better understand the distinctions.

SaaS ApplicationWeb Application
SaaS Apps run on a cloud infrastructureWeb applications are generally hosted n a server
SaaS applications need user requirements for their structure and featuresA web application is a type that users can access through a web browser. This category includes customized WordPress sites that operate on a shared server, specifically tailored to function as an application.
SaaS apps can be accessed either through a web browser or its interface.Accessed only through web browsers.
The web application has a single-tenant backend.
SaaS backend supports a multi-tenant architecture, facilitating users' sharing of costs and resources.
According to NIST requirements, the SaaS application boasts unlimited scalability.Scalability and availability are often limited in most web applications, including scheduling apps.

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Why SaaS Application Development?

Below are some of the reasons that tell us why SaaS app development gives businesses an edge over others. 

Technical Attributes

Reason 1: Database

Having a reasonably spacious, adaptable, and secure database is crucial, but it must also align with the specific requirements of your business. Selecting the appropriate database type involves considering several factors, such as data type, scalability, anticipated workload, the ratio of read-to-write actions, programming language, and budget.

Reason 2: Scaling

Incorporating scalability into your SaaS development process right from the outset is crucial. The software you are building must be capable of both vertical and horizontal scaling, ensuring that accommodating future expansion is never a concern for your business.

Anticipating the growth of your client’s expectations and needs, it is imperative to construct a SaaS application with scalability projections in mind.

Reason 3: Updates

Frequent updates are necessary for SaaS applications to optimize performance according to user feedback.

Reason 4: Third-party Integrations

Integrating your SaaS application with third-party apps can enhance its value and improve users’ experience.

Non-Technical Attributes

Reason 5: Market Fit

Before embarking on SaaS application development, it is essential to ensure that your future solution aligns with the expectations of your potential customers.

Conducting thorough market analysis in advance enables you to set realistic expectations and proceed accordingly in your development journey.

Reason 6: Service Focused

Software as a service development demands equal focus on the product and its service.

The key to success lies in continuously staying attuned to customers’ evolving needs and proactively satisfying them to ensure a successful SaaS project.

Reason 7: Availability of Packages

Providing various subscription options enhances the flexibility of a SaaS pricing model and appeals to a broader clientele.

Moreover, users will appreciate the assurance that they can continue using the SaaS even if their budget fluctuates by seamlessly transitioning to a larger or smaller package.

Steps of SaaS Application Development - SaaS Development Process


Step 1: Market Analysis

Congratulations on your SaaS application idea! Now, it’s essential to begin exploring the prerequisites for the SaaS development process. The initial step involves researching the users, competitors, and the market’s size. The primary objective of this step is to identify user demand and understand the problems to develop a solution.

There might be no competitors or only a couple in the market during this stage. Surprisingly, this situation may not always be favorable.

It could indicate that the market niche is relatively vacant, and there may not be a demand for a new solution.

Step 2: Designing

Thankfully, SaaS design best practices align closely with those used to design traditional solutions.

A clear and intuitive user interface must be developed to effectively address users’ tasks.

Moreover, it’s essential to take note of the emerging trend of mobile-first SaaS, one of the most significant SaaS programming trends.

Paying special attention to your mobile mockup designs is crucial since most companies encourage employees to access business apps through mobile devices.

Besides a user-friendly design, your future app should incorporate robust security measures and role-based access features.

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Step 3: Engineering

Moving forward, the next crucial step involves selecting your software development tech stack for engineering, which forms the foundation of your web app.

Some popular technologies commonly employed for SaaS software development include Angular.JS, Ionic, Symphony, Docker, and Kubernetes.
Frontend and backend engineering constitutes the most significant portion of work in SaaS software development.

Developing a SaaS application from the ground up demands several months and an entire team of specialized experts, each dedicated to their specific area of expertise.

Expert Tip:

Since engineering is the foundation, ClickySoft advises to request for a beta version first. In this way you and developers have a clear understanding of each phase and can address issues accordingly.

Step 4: Partitions

In preparation for future software modifications, which may include scaling, performance enhancements, operational flexibility, and improved security, it is essential to partition your software’s data into separate data stores.

By dividing the data into partitions, it becomes more manageable to handle each segment independently without dealing with the complexities of the entire database.

Various partitioning strategies exist, including horizontal, vertical, and functional approaches, each offering unique advantages and trade-offs.

Step 5: Testing

SaaS software testing ensures that the application meets user requirements before and after its release with minimal bugs. To comprehensively test the software, it is recommended to employ both manual and automated testing methods in the quality assurance process.

Additionally, involving beta testers can be beneficial, as they may uncover unique and non-trivial use cases that were not previously considered. To enhance security, incorporating cloud security assessments into the testing process is also a valuable step.

Step 6: Deployment

Imagine software deployment as opening the front door to your store. Everything should be meticulously arranged so that users can seamlessly access your software, readily find comprehensive documentation, and reach out to your support team effortlessly.

To maintain this seamless experience, automation, akin to a factory’s production line, is essential for deployment. Real-time software updates are rolled out immediately after they are ready, ensuring a smooth and up-to-date user experience.

The automated deployment approach stands apart from routine updates due to its focus on speed and flexibility. Rather than releasing one significant update at infrequent intervals, which can disrupt the entire system, this method allows you to implement small changes incrementally and more frequently.

Step 7: Optimization

Your solution’s service and business value are just as crucial as the SaaS product. After thoroughly testing and launching the product, it becomes vital to manage, monitor, and optimize its performance to exceed your customers’ expectations and promptly adapt to their evolving needs.

During this stage, diligent tracking of potential security vulnerabilities, resolving user experience concerns, and ensuring scalability readiness are essential to maintaining a successful SaaS solution.

Step 8: Migration to Cloud

If your SaaS development framework was not initially cloud-based, migrating it to the cloud becomes necessary. Based on your server type, data volume, and tolerance for downtime, there are various migration options available for you to consider:

  • P2V (Physical to Virtual)
  • P2C (Physical to Cloud)
  • V2V (Virtual to Virtual)
  • V2C (Virtual to Cloud)

Challenges of SaaS Application Development


While building SaaS applications typically follows the best practices of Agile and LEAN development methodologies, specific challenges demand your attention and consideration.

Challenge 1: Development Team with the Same Mindset

Adopting a service-oriented mindset is paramount in SaaS application development, as it guarantees that every team member comprehends the project’s particulars, current and future objectives, and scalability potential.

Consequently, it is advantageous to recruit individuals with prior experience in building SaaS applications, individuals with a genuine passion for crafting remarkable software-as-a-service solutions that address the needs of others.

Challenge 2: Meeting Client Needs

A primary challenge in SaaS development is creating a product that fulfills all your customers’ needs and expectations, which may evolve, necessitating adaptability.

To conquer this challenge, adopt a customer-oriented approach right from the outset.

Conduct thorough research on customer requirements and attentively listen to their expectations.

Prioritize the conceptualization of your future product before commencing the programming phase. Doing so allows you to seamlessly incorporate your users’ requirements into a solution that fully satisfies their needs.

Challenge 3: Choice of Right Technology

While scalability is a primary advantage of SaaS applications, selecting the appropriate technology to ensure your future solution’s scalability is crucial. Seeking guidance from a SaaS app development vendor and identifying your project’s most effective tech stack would be wise.

Challenge 4: Third-Party Service Integration

In a typical SaaS app, numerous features are integrated into the platform, with some developed by third-party providers and linked to the Software-as-a-Service through APIs. Meanwhile, others will be custom-built from the ground up.

Among the notable third-party features of most SaaS software is the payment system, which facilitates user subscription payments and various monetization/pricing-related tasks.

However, integrating such features can be challenging due to their intricate technical requirements.

The most effective approach to overcome this challenge is to enlist the expertise of an experienced development team, especially one equipped with knowledgeable QA professionals to conduct both manual and automated tests, guaranteeing the seamless functioning of third-party integrations.

It’s important to consider that the specific type of third-party integration required will depend on the core function of your Software-as-a-Service platform.

Challenge 5: Secured Database

SaaS applications store a substantial amount of sensitive information that can be accessed from almost any device with an internet-connected web browser, making them susceptible to hacking risks.

Similar to mobile app security to mitigate these risks, SaaS database service providers employ SSL and TLS as standard security protocols to encrypt user-to-server communications and user interactions.

However, these security measures may not be comprehensive enough to safeguard the vast array of data SaaS solutions handle.

Some countries are implementing laws to regulate developmental processes and platform management to ensure robust security. For instance, there is HIPAA compliance for American healthcare software.

Startups must now seek out and engage with SaaS development companies that profoundly understand HIPAA and GDPR protocols. The development team must adhere to the provisions of these protocols right from the project’s inception to maintain the required level of security.

Challenge 6: Downtime Strategy

Giving a high priority to regular platform updates is crucial. However, a challenge arises as the platform often becomes inaccessible during maintenance.

Traditional systems typically notify users about downtimes during updates. Nevertheless, Software-as-a-Service platforms, which need to remain continuously available, employ a no-downtime deployment strategy.

One popular approach to achieving no-downtime updates is the blue-green approach. In this application release model, a certain number of users are transitioned at scheduled intervals from an older version of the platform to an identical new release, both of which remain accessible.

The older version, the blue environment, can either serve as a standby in case of faults or be used as a template for the next update. Meanwhile, the newer version represents the green environment.

How Long Does It Take To Build A SaaS App?

The time it takes to build a SaaS app can vary significantly based on various factors, including the complexity of the application, the size of the development team, the technology stack used, and the scope of features required. 

The typical SaaS application requires almost a year to complete development, covering all stages.

Since time directly correlates to costs in software development, the longer the project takes, the higher the expenses incurred.

Consequently, teams are actively seeking methods to accelerate SaaS development and swiftly bring their products to market.

How Much Does It Cost To Build a SaaS Application?

The cost of developing a Minimum Viable Product (MVP) for a SaaS application typically ranges from $60,000 to $200,000.

The exact cost varies based on several factors, primarily influenced by the location of the developers, the application’s complexity, and the type of team involved in the development process.

SaaS Costing Details

Although we have covered the essential pricing factors above, we recommend reading our guide on the topic for a comprehensive understanding of the costs associated with developing a SaaS platform and hire developers accordingly.

The type of team you choose can significantly impact the development cost of your SaaS application.

As a startup, you have various team options to consider, which can often lead to confusion about selecting the most suitable one for your SaaS platform, especially if you’ve conducted market research.

Type of TeamDevelopment Costs in $
Local Agency180,000

The cost of a SaaS application can also differ based on the location of your development team.

For instance, opting for a team from the US might incur expenses of around $120,000 per app, whereas relocating the development process to Eastern Europe could significantly reduce the costs, ranging anywhere from $35,000.

ClickySoft offers you developers for startup at reasonable rates for your next SaaS project.

Note that all the costs are approximate values and may vary according to development requirements.

Final Word

SaaS application development offers immense opportunities for businesses to deliver flexible, scalable, and user-centric software solutions.

This comprehensive guide has explored the key aspects of SaaS development, from its definition and benefits to the challenges and best practices involved.

By embracing a customer-oriented approach, incorporating the right technology stack, and adopting agile methodologies, you can embark on a successful journey to create a SaaS application that meets evolving user demands and stands out in the competitive market.

With continuous updates, robust security measures, and a focus on scalability, your SaaS application can pave the way for long-term growth and success in the dynamic world of software development.

ClickySoft is a reliable development company specializing in mobile, web, and SaaS app development.

Our development experts are ready to give you an application worthy of your business with an easy to operate interface. You can hire our services or dedicated team for your SaaS business projects.

Contact us now for more information or book our services for your next project. 

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