How to Develop a SaaS Application in 2023: Development Guide

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Developing SaaS applications is the next logical step on your way to business growth. However, transforming your existing solution into SaaS or creating it from scratch requires a deep understanding of SaaS specifics, SaaS application development best practices, and possible pitfalls you have to avoid. 

This article will help you get an insight into SaaS application development and outsourcing so that you can transform the technical advantages of SaaS into your business growth opportunities.

What is a SaaS application?

Standing for Software-as-a-Service, a SaaS app is a cloud-based software delivery method that comes with a flexible and customized set of features depending on the different needs of the user groups that enables you to access data from any device and web browser with an Internet connection.

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 flexible and cost-effective nature of SaaS apps is the main reason for their popularity: by 2023, the SaaS app market is projected to reach $208 billion, with 86% of companies running purely on SaaS. That’s why building Saas applications for your business and customers can be a future-proof tactic to create a competitive edge in the long run. 

SaaS applications architecture

Below are several approaches to SaaS application architecture.

• Multi-tenant. Multi-tenancy means that a single infrastructure serves several customers being shared between them while each tenant’s data is isolated and secured from each other. 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. 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.
• Single-tenant. Single-tenancy means that every customer uses their own instance of the software. Single-tenancy model is better secured compared to the multi-tenancy one but is more difficult to support and maintain. 
• Horizontal SaaS. Horizontal SaaS apps are the ones that serve a large number of businesses regardless of the industry. For example, these are accounting or marketing apps that companies can use from multiple niches. 
• Vertical SaaS. Vertical SaaS apps, in turn, are the ones developed for a specific business vertical. Businesses can’t use them from different industries. Instead, they more or less advanced feature sets for different user segments. 

Types of SaaS apps

Depending on the industry SaaS apps are created for, they can also be classified into the following types:

• Customer Relationship Management (CRM). CRM systems, like Salesforce, are used to manage customers’ data and operations and are suitable for eCommerce businesses from both B2B and B2C segments. 
• Enterprise Resource Planning (ERP). An ERP system delivered according to the Software-as-a-Service business model allows enterprises to pay as they go, tailoring the necessary ERP system’s features to the current business needs. 
• Billing and accounting. Billing and accounting SaaS applications aren’t usually tailored to the business industry. Instead, they come with flexible subscription packages so that each company can choose the right one depending on its size, the number of employees, customers, and partners. 
• Project and task management. Most project management and collaboration tools like Jira, ClickUp, and Monday are delivered as software-as-a-service. 
• Communication tools. Slack is one of the most popular communication tools developed according to the SaaS business model. It allows for choosing a subscription plan depending on the team size and switching to a more advanced one in response to the team scaling. 

SaaS platform development specifics

To offer an all-encompassing experience, SaaS-based applications should be built differently than other types of online services and platforms. Below are the main characteristics of SaaS apps driven by their nature:

• Multi or single-tenancy
• Subscription-based billing model
• Flexibility
• Application and data security
• User-friendly interface
• Automatic updates
• High availability
• Elastic infrastructure

Differences between SaaS and Web Applications

Software as a Service (SaaS) and web applications are both types of software that run on a server. However, they have some important differences.

SaaS is an on-demand subscription model that allows customers to access the software over the internet. This means that users don’t have to install or configure anything locally on their own computers. Customers simply log in to the SaaS provider’s servers and use the application from there.

Web Applications are standalone programs that run in your web browser. Web-only applications usually offer a specific feature that can be used by a wide target audience, such as converting one currency into another. SaaS apps, in turn, are designed to provide more complex features, the set of which expands depending on the subscription plan. 

However, it would be wrong to completely separate SaaS and web applications since most SaaS applications also have their own web versions. For example, you can easily access Slack from both a web browser and desktop or mobile, while this app will still be SaaS-based. 

Benefits of SaaS Application development

Below are the cutting-edge benefits that make SaaS app development a promising business idea in 2023. 

• Development flexibility. SaaS applications allow you to easily change your system as your needs change. With traditional software, you have to wait for the developer to release an update, which can take months. With SaaS, making tweaks becomes easier since the development process runs in the cloud. For the same reason, you don’t have to invest in additional hardware to create such a solution. The users, in turn, can assess it from anywhere with an Internet connection.
• Win-win pricing for both developers and users. Most SaaS companies offer a wide range of price plans, so you can start small and scale up as your business grows. The main task is to accurately tailor the feature set to the subscription plan, depending on the users’ needs, and set a reasonable price for a specific market. 
• Predictable sales. With software as a service for external usage, your sales volume and profit become more predictable since the users either subscribe month by month or pay for an annual subscription in one installment.
• Higher performance. With traditional software development, there are often bottlenecks in performance due to slow response times or delays when accessing data from remote servers. But with SaaS applications, everything happens on one central server, so there’s never any lag time in communication between users and the system itself. 

What you should consider when developing a SaaS application

Below are technical and non-technical factors you need to keep in mind when building a SaaS application.

Technical characteristics of SaaS applications

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

Databases

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

Scaling

Scalability needs to be a part of your SaaS development process right 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. Your client’s expectations and needs are likely to grow. That’s why you have to build a SaaS application with scalability projections in mind. 

Frequent updates

Updating your SaaS solution regularly based on user feedback is a must to keep up.

Third-party integrations

Integrating your SaaS application with third-party apps is another way to add value and deliver a better user experience.

Non-technical characteristics of SaaS applications

Below are some non-technical but still essential characteristics of Software-as-a-Service applications.

Market fit

Before getting started with SaaS application development, ensure your future solution fits the expectations of your prospective customers. In-advance and in-depth market analysis allow for setting realistic expectations and moving forward accordingly.

Focus on service

Software as a service development requires staying equally focused on the product and service it delivers. The main point is that successful SaaS projects always stay tuned to the changing requirements of their customers, satisfying them in advance. 

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.

How to Develop a SaaS Application [Step-by-Step]

So, how to build a SaaS product? The process of building cloud-based SaaS applications usually follows the next steps:

Design

Fortunately, SaaS design best practices don’t differ much from the ones to design a traditional solution. As usual, you have to develop a clear and intuitive UI and make sure it solves the users’ tasks in the most effective way. 

Also, keep in mind that mobile-first SaaS is one of the strongest SaaS programming trends for 2022. So, pay closer attention to your mobile mockup designs – 87% of companies encourage their employees to access business apps from mobile devices. In addition to a convenient design, your future app should have extra protection and role-based access features. 

Choosing tech stack and engineering

The next step is choosing your software development tech stack, which is the foundation of your web app. Below are some of the top-popular technologies used for SaaS software development:

• Angular.js. Angular.js is one of the most popular front-end development frameworks used for building web solutions. However, it can easily be suitable for developing SaaS apps as well. Angular.js components are perfectly reusable, so your SaaS development process can run faster with this technology. 
• Ionic. Ionic is a hybrid development framework that allows for creating SaaS solutions for the web, Android, and iOS using a single codebase. It can also become a good choice for creating a mobile-first SaaS app, boosting development speed and optimizing costs. 
• Symphony. Symphony is a backend framework written in PHP. It is one of the top enterprise SaaS platform development choices mainly because of its brick-by-brick approach. 
• Docker and Kubernetes. These are the technologies at the heart of microservice architecture, which is a logical choice for building elastic infrastructure. 
• MongoDB. The main benefit of this database for SaaS development is that it stores data in documents instead of records, providing a faster exchange of large data sets.

Engineering 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. 

Partition 

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, such as horizontal, vertical, and functional, each having its benefits and compromises.

Testing

SaaS software testing is all about making sure it meets your user’s requirements before and after the release date, plus it 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. Moreover, 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.

Deployment

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.

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.

Managing, monitoring, and optimizing

The service and business value your solution delivers are as important as a SaaS product itself. That’s why after it is carefully tested and launched, you have to manage, monitor, and optimize its performance to better meet your customers’ expectations and quickly adjust to their changing requirements. At this stage, you have to carefully track possible security gaps, fix the user experience issues, and keep your solution ready for quick scaling. 

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)

SaaS application development challenges

Even though building SaaS applications is usually done according to the best practices of Agile and LEAN development methodologies, there are some specific challenges you have to keep an eye on.

Meeting the needs of the customers

One of the main SaaS development challenges is to build a product that will meet all your customers’ needs and expectations. Moreover, their expectations and needs may change over time, and you will have to adapt. 

To overcome this challenge, embrace a customer-oriented path from the very beginning, research the customers’ requirements and listen to their expectations. Pay special attention to your future product conceptualizing before getting started with programming itself. In this way, you will be able to embed your users’ requirements into a solution that will satisfy them completely.

Hiring a development team with a service-oriented mindset

A service-oriented mindset is crucial for any SaaS application development because it ensures that each member of your team understands the specifics of the project, its current and future goals, and its scalability potential. 

That’s why it is better to hire people who have experience with SaaS app building and are passionate about helping others solve their problems by creating amazing software-as-a-service solutions. 

Choosing the right technology

While scalability is one of the main benefits of SaaS applications, you have to choose the right technology to make your future solution scalable. That’s why it would be wise to consult with a SaaS app development vendor and find the most effective tech stack for your future project. 

SaaS development team structure

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

• Project manager is responsible for planning the software development process, assigning tasks, and following up on their fulfillment, ensuring the progress meets the deadlines and is aligned with all the requirements.
• Business analyst analyzes your software’s market potential and assesses & builds a viable business model for you.
• UX/UI designer is 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 identity.
• Back-end developer works on the server side of your SaaS application, making sure it functions as planned using scripting languages. 
• Front-end developer is a specialist who works on the client side, turning designs into code, usually using JavaScript and its frameworks.
• QA engineer 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 DevOps for SaaS projects, you will also need a DevOps engineer. As the smartest tactic, consider partnering with a tech-savvy software development vendor who can help you gather a cross-functional team of developers with a product-oriented mindset.

The 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. So, how to build a SaaS application in the most cost-effective way? Consider outsourcing software development, and in this case, you will have to pay engineers’ salaries based on their hourly rate as well as the vendor’s fee. 

This is just the point that makes SaaS development outsourcing effective – depending on the outsourcing destination, you can save significantly and still access top SaaS development expertise. Let’s compare the opportunities.

The monthly salary to hire a SaaS developer in different countries

Speaking of Ukraine, outsourcing SaaS application development to a vendor from this country might well be a wise choice in terms of the quality-to-cost ratio. Ukrainian software developers share Western business values, and are educated, hard-working, and fluent in English. Moreover, the Ukrainian time zone (GMT+3) allows for establishing effective collaboration and communication with businesses from both the EU and the US.

Your Relevant partner

If you choose to entrust your project to a SaaS development company, make sure they have relevant experience and the latest tech expertise. 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, for example:

• 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, get in touch with our top-notch SaaS software developers. They will be happy to help you build a SaaS application that will perfectly meet the expectations of your users and your business goals, being technically powerful, well-designed, securely protected, and easily scalable.

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