Product Manager at Relevant Software

How to Develop a SaaS Application [Development Guide]


Developing a SaaS application might be the logical next step on your way to business growth. But building software isn’t a decision you can make lightly or without conducting proper research first. You need to understand the ins and outs of the SaaS development process to make proper decisions when it comes to hiring a dev team, allocating the budget, or marketing the new solution. And this is what this article is about.

At Relevant, we’ve helped more than 200 companies excel by developing SaaS solutions for startups and mature businesses. So rest assured: the tips we give in this piece are tried and tested.

Continue reading to discover SaaS application development best practices and other details you need to know about SaaS application development and outsourcing.

What is a SaaS application?

A SaaS application is a web-based app that replaces offline software. Its subscription-based, on-demand nature frees your clients from having to install it locally on their devices, as well as upgrading the hardware required to run it. 

Clients usually use SaaS solutions from connected devices via an internet browser or different APIs while the software provider carries out all maintenance. Typically, its infrastructure is maintained by a third-party cloud-computing provider.

The cloud shift rate through 2020 for SaaS is 37%—that’s three times more than PaaS (Platform-as-a-Service) and IaaS (Infrastructure-as-a-Service). And according to BetterCloud, more than 75% of organizations claim to make 80% of their business apps SaaS in the next five years.

SaaS application progress

Basic set of SaaS app features

To offer an all-encompassing experience, cloud-based SaaS solutions need to have a set of features that differentiate them from other types of online services and platforms. These include:

  • The ability to login and logout of your user profile
  • Subscription-based billing model
  • Flexibility
  • Application and data security
  • User-friendly interface
  • Automatic updates
  • The option of receiving email notifications

What you should consider when developing a SaaS application

There are multiple factors you need to take into account when creating a SaaS application. We split them neatly into two categories, based on their level of technicality.

Technical characteristics of SaaS applications

A solid SaaS application should perform flawlessly in the following aspects:


While it’s essential to have a reasonably big, flexible, and secure database, it also needs to be of a specific type that suits your business needs. What database type you choose depends on many factors, including data type, scalability, expected load, the ratio of read to write actions, programming language, and budget.


Scalability needs to be a part of your SaaS development process from the start. The software you’re building has to scale vertically as well as horizontally, and expanding it should never be a problem for your business.

Frequent updates

There’s no such thing as perfect software. Your clients’ expectations and needs will grow, and so should your software if it wants to accommodate them. Updating your SaaS solution regularly based on user feedback is a must to keep up.

Third-party integrations

By allowing integrations with third-party software, you increase your solution’s marketability, adding value and features automatically. So, plan those kinds of integrations in your software by providing easy-to-consume APIs as well as documentation. Hosting popular bots like Slack is always a win for a SaaS application.

benefits of saas model

Non-technical characteristics of SaaS applications

Being a robust piece of software is only half of the success for your SaaS. The other half is being user-friendly, so make sure your solution has:

Market fit

Before even starting the development, make sure the market actually needs it. Analyzing the market and visualizing your solution’s position in it early on allows setting realistic expectations and moving forward accordingly.

Client acquisition process 

You’re building an app for users, so make sure it’s easy to use, appealing, and marketed to the right audience. Caring for your clients also means creating a subscription lifecycle and a fair pricing policy.

Various packages

Offering different kinds of subscriptions makes a SaaS pricing model more flexible and attracts more clients. Plus, your users will be glad to know they can still keep using your SaaS if their budget changes by simply shifting to a bigger or smaller package.

Now, you know what essential features your SaaS application needs and what technical and non-technical characteristics to pay attention to. Phew, it’s finally time to get down to coding.

How to develop a SaaS application [step-by-step]

The process of building SaaS applications usually follows the following steps:

process of building SaaS applications


This is the largest chunk of work in SaaS software development. Building a SaaS application from scratch requires months and an entire team of dedicated experts, with everyone focused on their field of expertise.


You can’t just start building cloud applications. Okay, yes, you can, but it will cost you dear since without designing the solution first, you risk producing software that’s unstable and full of unnecessary, faulty features. The design phase has multiple cycles and results in essential artifacts like the software architecture document, user stories, style guides and mockups, and sometimes even a functional prototype. 

But let’s focus on the aspects inherent to SaaS solutions, starting with the app’s hosting architecture or how it accommodates its users. You can go with a single- or multi-tenant approach.

The single-tenant architecture provides every client with their own server when using your software. It’s more suitable for bigger clients who may exhaust your resources quickly.

On the other hand, the multi-tenant architecture allows multiple users to access the same database through separate accounts, meaning they’re unaware of the other’s existence. There are two ways to implement the multi-tenant approach:

  • One app instance, one database. With this setup, all users entering your cloud environment access the same database until it’s full. While this approach is easy to implement, its scaling abilities are limited, which affects the overall performance of the app and the user experience.
  • One app instance, several databases. Here, each database is only filled up to a certain point before redirecting new users to another database. That way, users have access to more resources, so the software feels more responsive. This approach is much more expensive to implement and requires more resources early on.

The next step is choosing your software development tech stack, which is the foundation of your web app. Many factors come into play when deciding how you want to build your app: flexibility, scalability, budget, and speed.


To account for future alterations to the software, from scaling and improving performance to operational flexibility and enhanced security, you need to divide your software’s data into separate data stores — partitions. This way, it’s easier to handle each partition separately without the complexity of the entire database.

There are different types of partitioning strategies like horizontal, vertical, and functional, each having its benefits and compromises.


Think of software deployment as opening the front door of your store. Everything should be in place so users can use your software, easily find extensive documentation, and be able to contact your support right away. And to keep it that way, deployment needs automation similar to a factory’s production line. Software updates roll out in real-time, getting released as soon as they’re ready.

Deployment of saas apps

Speed and flexibility make the automated deployment approach different from routine updates. Instead of releasing one major update every once in a while and putting your entire system on hold, you’ll be able to deploy small changes at a time.


SaaS software testing is all about making sure it meets your and user requirements before and after the release date, plus has as few bugs as possible. It’s a good idea to incorporate both manual and automated testing approaches in your quality assurance process to cover the software entirely. Plus, beta testers can help you discover some non-trivial use cases you haven’t even thought of. You can also add cloud security assessment to this process.

Managing & monitoring 

The development team (which we’ll cover in detail later on) works best when all they do is code and test, while a manager oversees the process and guides them. Managers know best which tasks should be assigned to whom and who isn’t skilled enough yet to handle more senior-level assignments. This is the person you can count on for updates on the SaaS development process.


Optimizing SaaS environments boils down to optimizing costs, tenant experience, availability and performance, timing, and bulk operations. Whichever you need to optimize, make sure you do it after scaling to the desired size. Then, it’s a matter of identifying what your software needs to run smoothly by making sure you have enough servers and databases for your user base. The trick is to have enough resources for a pleasant user experience but not too much that you’re wasting money on staff and equipment.

Migrating from on-premise to cloud

Unless your SaaS development framework was cloud-based from the start, you need to move it there. Depending on your server type, amount of data, and acceptable downtime, you have multiple migration options to choose from: 

  • P2V (physical-to-virtual) 
  • P2C (physical-to-cloud) 
  • V2V (virtual-to-virtual)
  • V2C (virtual-to-cloud)

Knowing how to develop a SaaS application is one thing; finding a team skilled enough to do this at a reasonable cost – that’s a whole different story.

Migrating from on-premise to cloud

SaaS development team composition

While the number of team members can vary, there are specific roles you need to fill to develop cloud-based SaaS software.

  • Project manager. A person responsible for planning the software development process, assigning tasks, and following up on their fulfillment, ensuring the progress adheres to a set timeframe and requirements.
  • Business analyst. A person who analyzes your software’s role in the market and documents its progress, assesses and builds a viable business model for you.
  • UX/UI designer. A person who designs and implements your application’s user interface and experience, ensuring it’s easy-to-use, aesthetically pleasing, and aligns with your brand.
  • Backend developer. A person who works on the server side of your SaaS application, making sure it functions as planned using scripting languages. 
  • Frontend developer. A person who works on the client side, turning designs into code, usually using JavaScript and its frameworks.
  • QA engineer. A person who tests your SaaS software for defects, bugs, and issues and reports them to be fixed by the engineers.

Depending on your project size and budget, you may also need other specialists like a technical writer, a marketing specialist, or a product manager on the development team. In addition, if you are leaning towards methodology DevOps for SaaS projects, you will also need a DevOps engineer. Our pro tip is to partner up with a software development vendor who can offer the services of a wide variety of specialists.

Cost of building a SaaS application

The lion’s share of software development costs is the salaries of software engineers and other essential development team members. If you’re building an in-house team, make sure to add the costs of hiring and onboarding new tech specialists to the budget. If you’re considering outsourcing software development, the price you’ll pay includes the hourly rates of engineers plus the vendor’s fee. 

According to YouTeam’s recent survey, the average hourly rates of senior software developers around the globe vary drastically:

  • United States: $46.32/hour
  • United Kingdom: $71/hour
  • India: $30/hour
  • Ukraine: $37/hour

Speaking of Ukraine, outsourcing SaaS application development to a vendor from this country might well be the optimal choice in terms of the quality-cost ratio. Ukrainians share the Western business values, are educated and hard-working, and live in a time zone that’s reasonable for clients from both the EU and the US.

popular saas apps

Your Relevant partner

If you choose to entrust your project to a SaaS development company, make sure they have relevant experience and know what they’re doing from personal experience. You don’t have to look far, though,—Relevant is an outsourcing vendor with eight years of SaaS development experience. Our clients include high-growth SaaS companies from around the world, including:

  • FirstHomeCoach: a fintech product that helps UK buyers purchase property
  • Svenn: an app that allows construction companies to track time and manage employees
  • Kaizo: a SaaS application that boosts the performance of support teams through gamification
  • Biderator: an auction platform that connects construction work contractors with clients

Whenever you decide to add your name to the list, contact our experts. They will be happy to help you build a SaaS application your users will love and you’ll be proud of.


Written by
Product Manager at Relevant Software
For more than 6 years, I've been working as Business Analyst and Product Manager at Relevant. I'm responsible for requirements engineering and management and solution implementation control.

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