If you are new to SaaS then this blog is the perfect guide to learn about SaaS Product Development. Software as a service (SaaS) is a cloud-based application that enables delivering software applications over the Internet, without the need for installing and maintaining the software physically.

Building a SaaS business product is not a simple process to think of. This article can be a complete guide and support to users and businesses with the necessary information required for SaaS product development.

In the further sections, we will see how to build a SaaS business or build SaaS applications in detail.

Steps To Build A SaaS ProductSteps To Build A SaaS Product

Market Analysis

Intensive research before development gives multiple ideas for your product development and leads to the success of the product after implementation.

You will easily get to know your competitor’s moves, the market demand and potential customers. As the first step, validating your software development idea is ideal so that it helps you avoid mistakes further.

The market research you do allows you to decide whether your target audience will pay for your product and your business model gives them recurring benefits if it meets their needs.

Discuss SaaS Requirements

Many SaaS products may have at least a few things in common.

Analyze the risks that your product can create to customers or thoroughly understand what kind of challenges your product can develop so that it becomes easy for you to have clarity of plan before the application development.

You may not see a standard flow in your consumer needs because depending on the increasing demand, their needs also can vary.

So it is ideal to create a SaaS product according to their present and future needs and ensure high-level security to their data.

Define the MVP

As we mentioned earlier, setting up the minimum viable product into the market is the first success of your app development.

It is similar to the Beta version of an application that goes into the market for the usage of the target audience and is upgraded based on the feedback of their usage.

This will show you what cost and features can work with your target audience and whether users will accept the cost of the product or not.

Choose the pricing model

SaaS pricing model

This differentiates you from your competitors because it categorizes your product cost according to the customer’s affordability and usage. This is where reliability and scalability plays an important role. Here are some of the pricing models you can choose from:

  • Pricing based on usage – Users pay as per the amount of usage
  • Feature-based pricing – This pricing changes as per the number of features customized by users
  • Pricing based on active users – Here, you charge the user for the entire product
  • Freemium – Users need not pay at the beginning to use, but you provide only limited features with an option to upgrade
  • Fixed-rate – You fix a flat price for the entire product or bundle of features and allow users to renew on a monthly or yearly basis

Technical Aspects

This is another vulnerable part of your SaaS product development. The need of each user may vary from one to another; the same rule applies even with respect to technology as well.

Choosing the right technology for your SaaS product is more important because if it does not meet/suit your user needs, it may directly affect the cost and effort you put in for app development.

Following a scalable software, architecture is always advisable because you never know when your customers may expand or bring changes to their business.

Define features & functionalities

The features and functionalities you bring into the application should satisfy the needs of your customers at first and be set unique from your competitors.

As in when you receive feedback from your application users, rectify them immediately, but at the same time, concentrate on resolving the root cause of the problem that can keep such issues forever away from affecting your app.

Know your budget

Once you are thorough with all the aforementioned points, by this time you would have got an idea of how much to invest in your SaaS product development and will it be affordable by your customers.

You should ask yourself several questions about whether you have chosen the right target audience in case you cannot compromise on your product development budget.

In the end, you should be in a position to develop a product that is beneficial for you and your user/customer.

Launch prototype & get feedback

Now you are good to go with your product testing and can release the prototype before launching the final product.

We can call it as pre-launch or Beta testing of your product and get customer feedback on the features and user experience, user design.

This will help you overcome your mistakes/errors in the app performance and give a finished product to your users.

How Much Does it Cost to Build a SaaS Application?

Apart from the geographical location where a SaaS product is being developed, the development cost of a SaaS product varies according to several factors involved in its making.

Here are the few factors that are necessary for predicting the cost of developing a reliable and scalable SaaS Product Development.

  • Business analysis
  • Design
  • Programming
  • Servers
  • Software monitoring and maintenance
  • Promotion
  • Client support

It would be wise for the developers or business owners to analyze the above-listed factors before fixing a final price for the final SaaS Product.

Knowing the Customer Acquisition Cost For A SaaS Company is also vital. It will help them in the long run.

Also, take a look over the role played a few other factors in fixing the final price for SaaS Product Development.

SaaS Product Budget Planning

UX and UI design

Depending on the technology used for building the app features, the cost of UX and UI design can be judged.

Also, if you are preferring developers from the USA, then the cost for building a SaaS product may go up to $15,000.

You can calculate according to the geographical location of the developers and also the tech stack for the building SaaS product.


This is one biggest task that every developer has to be careful of while building a SaaS product because the cost of a server for hosting a SaaS product cannot go high or low.

Hosting servers ranging between $30 and $8,000 based on the intensity of your application development can be utilised for hosting SaaS products.

Monitoring software and app maintenance

The cost for monitoring SaaS products may start from around $3,000 and it may raise depending upon the number of users.

Development and tests

Features play an important role in this part; therefore, depending on its complexity, it may begin from $20,000 for complete SaaS Product Development.

Hope you get an idea of how much your saas app development company may cost and how much the Saas product may be priced for gaining significant profit.

Types Of SaaS Applications

You can find a plethora of cloud-based applications in the market; especially in the SaaS Development platform. However, there are some challenges of Cloud Computing apps as well.

  • Billing software like Tipalti allows users to control all payment procedures in a single tap.
  • Project management software like Jira or Workflow supports project managers who collaborate with their teams.
  • Enterprise resource planning (ERP) software helps in managing business processes like Oracle.
  • Customer relationship management software (CRM) is used for generating potential leads and converting a one-time customer into an ever-returning person. The best example would be HubSpot.
  • Collaboration software is used by Miro, which helps in effective communication and information sharing.
  • Products that belong to a specific niche and optimized business processes are best examples of Vertical SaaS.
  • eCommerce software which is considered as the leader of SaaS software development that supports in running an online business successfully. Also, product management and payment integration applications such as BigCommerce, Shopify fall under the same category.


Things to Take Care While Building SaaS Products

SaaS product development involves understanding the possibilities and consequences of a business requirement deep down.

In the process of SaaS application development, there are several things that a business owner/developer should consider.

Begin with an MVP

The minimum viable product should always be the start of your business. As small as you keep it, the less you experience project failure.

Moreover, it supports you with lowering the up-front costs involved during the application development.

You get the facility of creating a prototype and test various concepts and get timely feedback from users before you launch the application.

In this manner, Minimum Viable Product Examples can be useful to you in the long run.

Know more about what your users think

Any software requires updates here and then, but with continuous users’ feedback, you can fine-tune your application features and make it viable for users.

This increases your product value in the market.

Collect regular feedback from your users and implement those changes in your application and keep releasing updates for your software after fixing those bugs.

Develop the SaaS product with an agile approach

SaaS product with an agile approach

Always keep an agile approach and lean start-up model when you dive into the deep down of implementing your idea, which will help you reduce/overcome risks involved.

In addition, there are few more technical things that every developer or app builder needs to concentrate before starting developing a SaaS product.

  • Architecture– Make sure you are about to develop a Single or Multi-tenancy architecture. Developing a multi-tenancy architecture is cheaper when compared with single-tier architecture.
  • Data Security– Developers must keep an eye on the security of the data. It should be on a higher level at the same time it should be easily scalable and come under the app owner’s budget.
  • Features– Make sure your SaaS product comes with necessary and compatible features.
  • Upgrade & Integration– Ensure your SaaS product service has fixed upgrade frequency and is easily integrated with other services using API.
  • Easy Monetization– Make sure your SaaS product comes with a desired package for subscription along with payment options.

Challenges of SaaS Software Development

Digitalization is something that comes crucial in SaaS product development to avoid offering application services as products.

Most users may find SaaS products unreliable because of not having frequent updates, but originally, users who have SaaS software find it very interesting, reliable, affordable and with great accessibility.

But the fact is both developers and users find the SaaS approach very useful. Where there are multiple benefits, there might be challenges as well.

SaaS software development is not least in that category. Users deliberately find SaaS products extremely helpful using online and keep away from buying additional hardware resources.

It is critical for SaaS developers to find a solution for keeping the service extensively and performing competitively, securing the entire data of customers.

It is also educing the risk involved in system failures, which may completely ruin the client data. Let us look at what challenges SaaS products can throw to businesses.

Challenges of SaaS Development


You might be a SaaS start-up, the service provider of SaaS solutions, or can be a SaaS client, but unless your tech stack is not scalable, you cannot take your business to the next height.

In the case of start-ups, non-scalability can result in slower performance of the software due to the increase in the number of clients.

In the same manner, SaaS clients may have to shut down their applications because of the overload issue.

If the target audience size is huge, then it does not matter even if you implement vertical development which is the current trend in digital businesses. Sticking on to a specific niche may not give you enough customers for your product.


The most crucial factor we think of SaaS products is sometimes it can hit back your application/business performance. But being precautious or taking necessary steps before downfall can save you anytime.

As a service provider, your customers expect you to provide a guarantee on data security. If you do not provide high-level security to customers’ information, your business may experience delinquency.


SaaS applications/software depends on the AWS SaaS architecture, which is considered to be the most reliable platform for maintaining cloud applications.

At the same time, the architecture protects customers’ websites and products from being shut down due to the impact of overloading.

Invulnerable cases, you can transfer your customer’s website data completely to another server to make sure it is not down and no data loss incurred.


This is the most concerned area of your target customers because customers prefer using SaaS products for its cost-effective approach. So before you create a SaaS application, you must consider the complete requirements of your target audience along with futuristic approaches.

Providing a scalable SaaS product at an affordable cost is a time-consuming thing. However, this scalable SaaS product could be necessary for your customers.

On the other hand, your model should be developed in a sustainable method such that any upgrades and maintenance of the application is billable to the customer at once.

Key Saas Metrics You Should Be Tracking

If you run a business of any particular product/service, it is natural that you would like to know the performance of your SaaS Product Development.

There are several metrics you can analyze and understand to know the current state of your product among its users. Using Google Analytics or Hotjar alone is not sufficient to know the performance exactly.

You would have heard about key performance indicators, which are technically termed as KPIs, on which even SaaS businesses highly focus on.

  • Customer churn- This shows the number of customers who unsubscribes your product, every month
  • Net promoter score (NPS)- The value gained by customers against your product
  • Customer lifetime value (LTV)- This indicates the revenue generated by customers over the lifetime of their subscription
  • Cost of acquiring a customer (CAC)- This again talks about the product cost
  • Revenue- Lastly, monthly or annual revenue generated by the product

Read also: Why Choose Multi Tenant Architecture For Your SaaS Applications?

Advantages of SaaS Application Development

Advantages of SaaS Application Development

The commonest and biggest advantage of SaaS is it does not require any additional/special device to execute it. The other advantages of SaaS are:

  • Accessibility- Users can access the SaaS software from anywhere anytime and operate the software, with just a proper Internet connection.
  • Huge customer base- With offering services at low costs and trial periods, SaaS possibly has larger potential customers.
  • Reduced costs- Saas products are available at pretty reasonable costs, avoiding the need to buy expensive hardware and maintenance of the purchased hardware.
  • Consistency in revenue- It supports generating regular revenue for developers due to the ease-of-use mode.
  • Reliability- Users can be worry-free from server downtimes by using SaaS products because it has servers across locations and if one goes down, the rest of the available servers uplift the application until the original server is up. Therefore, users consider it a reliable technology and software.
  • Scalability- It enables automatic upgrades or downgrades, or even doing it manually does not take much time, whenever required.
  • Security- Data security is the uncompromising benefit of SaaS because it offers complete data protection with multi-level authentications.

How to Convert the Existing App to a SaaS Model?


Compare your product with other existing products in the market and their reliability/success as well.

Think of your product requirements and also of some new features or to remove certain unwanted features.

Anyhow, after making any developments/modifications to your product, it should convince you such that the second look of the app is extraordinary.

Build a team

Your customers may not be using the SaaS platform prior but wish to transform their application to a SaaS-based cloud service since the demand wants it.

Then you should have a team which is adaptable to any technological changes that take place among your customers. If not, you can also look for any external support or outsource SaaS product development.

Choose a cloud provider

If your product is ready to launch, then it should be hosted in the cloud. To do this, you need a cloud service provider who can offer you the best service at the best rates.

At the same time, you should have an eye on customer support and the number of users they have delivered service to.


Migration can be quite a hefty process which may take some time to learn and implement. Either you should be prepared for any implementing necessary integrations on your product or by hiring a SaaS expert would do.

Hiring a SaaS expert can reduce the app or software development time and also it simply speeds up the development process.

You should also keep the frontend/backend movements in mind if at all it is necessary for your product since it is also quite time-consuming.


If you ever had a question of how to start a SaaS business, this article is your definite and complete answer to SaaS Product Development.

There are many SaaS products introduced in the market, where one way or the other, service providers can reach their target audience successfully and generate some decent business out of it.

If you need any support, hire dedicated development team for building reliable SaaS applications which would offer you with optimal solutions in budget-friendly manner.

Before getting involved in building SaaS applications, keep remembering all the points mentioned in this article for developing a successful SaaS product.