In the ever-expanding global market of software development, Software as a Service (SaaS) has been growing in popularity for a while now. As a popular new sales model, it even looks set to replace the more traditional model of software licensing very soon. But what exactly is SaaS? How can transitioning to this sales model of SaaS development help software companies in this rapidly changing marketplace?

The majority of the SaaS products currently available are applications for the web and mobile. These require no installation and work under a subscription model. This has many benefits for both the companies and the users. But first, it’s important to understand more about what a SaaS product really is.

What is a SaaS Product?

What is A SaaS Product and what is the main advantage?

Put simply, SaaS is a cloud-based method of software delivery that takes place entirely via the internet.

SaaS products use a subscription-based pricing model. This makes high-end software much more affordable for customers. The software is based entirely on the cloud, allowing instant access and often not even requiring installations. It also means that updates happen automatically. This allows the software developers to keep control even after the product has been purchased and shipped.

A key point is that the customer is not purchasing a lifetime license for the product. Instead, they purchase a regularly renewing one through the flexible pricing subscription model.

What is SaaS Application Development?

SaaS-based development is focused on optimizing the resources of customers, through their unique development and distribution model.

The benefits of SaaS development come from the platform upon which everything is carried out. Due to being entirely cloud-based, everything from the development, distribution, and maintenance can all be carried out fluidly and instantly.

This form of cloud-based development and delivery also allows users to gain access to unique and distinctive features and functions that would otherwise not be available in more traditional software formats.

In the world of web app development, one of the most experienced and trusted outsourcing companies is TMS (shameless plug). The services that we provide cover the entire lifecycle of app engineering. This allows customers to select entire software packages or just specific segments.

We can help you turn your idea into reality, take over your existing project, or extend your current development team.

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Benefits of SaaS

Benefits of SaaS (Software as a Service)

Now that we know more about what SaaS software development actually is and how it differs from traditional development methods, let’s look at some of the main benefits it can bring. As you will see, when utilized effectively, companies can make real savings in time, money, and resources.

The main advantages behind SaaS development include:

  • Lower initial costs for users
  • Steady and regular income for companies and developers through the subscription model
  • Trial periods allow customers to test the software
  • Increased scalability and accessibility
  • Products are ready to use and can be updated even after purchase
  • The lower initial costs can draw a much larger customer base

How to Make SaaS Products

Due to the nature of SaaS, there are some important points to consider before you even start developing your product idea.

There are a number of steps involved in building SaaS applications. These include:

Researching the Market and your Competitors

It can be easy for a new developer to see the excitement surrounding SaaS and get caught up in it. But it is vitally important to not rush into anything before you conduct the proper research. This means not only into the technology itself but also into your potential competition.

First, ensure you have a clear idea of what your product will be. Then, choose between two types of focus:

  • Vertical: to specialize in SaaS software for specific industries
  • Horizontal: to specialize in software categories like marketing or sales

These types of focus will help you to identify your customer base and therefore allow you to build and market everything with them in mind.

Then you must decide on the features that you are going to include in the SaaS product. This decision-making process should begin and end with the needs of the consumer and the goals of the software. These will be different for every SaaS application, however, there are some distinct features that are the same in every SaaS application, and can be a good place to start. Because of this, you should start with the following three types of research:

  • Market Research
  • Competition Research
  • Customer Research

By starting with these three types of research, you and your development team will begin to narrow down the focus of your application, and what you want to achieve with it. Defining your audience is a key first step.

Define your MVP (Minimal Viable Product)

After doing all of this research and defining your target audience, you should then bring in the concept that will guide your development. It’s important to remember that your product should bring value to that audience, and so consider what problem of theirs you are trying to solve. Applications such as these normally include tools, account management, analytics, and more. Your product should be easy to use and beautiful to look at and navigate.

Once you have figured out the core value proposition of your software, you should begin to get an idea of the next steps of development.

At this point, it can be helpful to think about what your minimal viable product will look like. A minimal viable product (MVP) is a potential example product that fulfills all of the basic, core needs of your software. This can then be a goal for your development, and crucially it can act as a framework for the rest of the final SaaS product. It can be built upon once the MVP is polished and the basic functions are being fulfilled.

This is a crucial step in developing a SaaS product that can beat your competition.

Functions and Features

Features and functionalities

A good tip is to focus on the most important aspect of the software and deliver that first. Test your product on real test users and use their feedback to improve and adjust before launch.

The way to deliver a unique SaaS product is to ensure you offer great features and functionality that is either absent from your competitors or is simply done better by you. Always focus on the core beliefs and functions behind your product, and develop and improve outwards from there. Remember the research you have done, the audience you are targeting, and the problems you are trying to solve. If you stray too far from those core principles, then it will negatively affect your final product. If you fail to address those points, then the product you make runs the risk of ultimately being useless.

Select a Pricing Model

One of the most important parts of developing your SaaS product is deciding on the pricing models to offer your customers. It is the part of the process which can make or break your application. Again, ensure that you research what is already on offer in a similar market to the one you are targeting. Certain pricing trends have emerged since SaaS became so popular.

Here are some of the most commonly used pricing models currently being utilized for SaaS products. Bear in mind that many successful developers often use combinations of these to great effect.

  • Use-based: This lets customers pay for the software depending on how much they use it
  • Freemium: This plan provides an often-permanently free version of the software, but with limited features that can be unlocked through paid upgrades and plans
  • Flat Rate: This offers the whole software package under one fee. Sometimes this is paid yearly or monthly
  • Pricing per Active User: Offers the whole product or batch of features and charges per active user
  • Pricing per Feature: This offers bundles of specific features which can be unlocked at varying prices

Tech stack

Tech stack

Once these stages have been completed, you must then choose a technology stack that will be right for your SaaS application.

This should depend on the functions that you want to provide with your software. This will for the most part dictate what language you should use, as certain features can be delivered more effectively through certain particular languages.

It’s always best to opt for the technology that is known for its supportive community and open-source elements. Depending on the language, it will be better to choose the best matching cloud platforms such as Azure for .NET or Heroku for Java.

Essentially, you must ensure that whatever tech stack you choose is capable of carrying out the job ahead. Often, outsourcing this SaaS development work to a third-party company can be extremely helpful. They can offer help from the beginning to the end of the process, and can provide insights that you may not have access to otherwise. For example, TMS is a great and trusted company that will help with the entire process. TMS can start from scratch, take over existing development, use multiple programming languages, scripting tech, frameworks, libraries, and much more.

Find SaaS Developers

At this point, it is finally time to create or locate a development team. You have two options when doing this: use existing employees within your company, or outsource the work either entirely or partially. Outsourcing can free you up to focus on other elements.

Hiring SaaS developers can be a great solution if you are unwilling or unable to make longer-term commitments to product development.

You can outsource SaaS development to providers such as TMS which can allow you to find the best professionals for the job, and hire them quickly and easily. The team you hire can then handle however much of the job you need them to, for as long as necessary.

Companies such as TMS can also offer valuable insights and advice about the industry, due to being involved in so many varying projects.

Maintenance and Production

The next stage is production, deployment, and maintenance. This includes multiple aspects such as product testing, product delivery, and production server checking.

It’s important to include monitoring software in your product, as this allows you to track the performance of your product and deal with any issues that may arise. This is a vital tool in increasing the reliability of your product. What can also help increase reliability is ensuring that all units of your product include the relevant documentation. This includes user manuals, tech documentation, QA reports, and more.

To make sure this stage of the process goes off smoothly, make sure that your marketing team has been building up buzz around your product in advance, preferably before you have even built the product itself. This builds up consumer enthusiasm and anticipation for the product.

The Costs of SaaS App Development

Company Costs of SaaS App Development

As with every product development, the costs of this process can vary greatly depending on the specifics. While many costs cannot be avoided, some can at least be managed by you and your approach.

For example, the country in which the team you hire is based can make a big difference in how much it will cost to hire them. If you hire and work with a team based in the US or Canada, you will likely pay on average somewhere between $150 and $180 per hour. However, a similar team based in Asia or South America will often cost between $15 and $45 per hour. However, the cost is not everything, and while it can be tempting to opt for the cheaper team, there are always other points to consider.

For example, working with more distant teams can lead to culture gaps and language barriers, making cooperation and communication much harder. The increase in price can often come with an increase in the quality of work, which is always worth paying more for.

Quite often, a good choice for many companies is to hire European teams. They often are cheaper than their US counterparts but produce higher quality work than those from Asia and South America. Western Europe can typically charge anywhere between $90 and $120 per hour, while Eastern Europe charges between $40 to $75 per hour.

These prices can all vary massively, but it hopefully gives you an idea of the kinds of prices you can expect to pay, and the respective quality of work you will receive.

Ending thoughts on SaaS development

As we have seen, the SaaS model has grown in popularity by orders of magnitude in recent years. The flexibility and dynamic nature of the workflow are tempting to many businesses and can benefit the consumer just as much as the developers. But it would be a mistake to say that cloud applications are the way to go for every company.

SaaS development works well for businesses providing products that are suited to subscription-based models of pricing, and centralized maintenance and updates. On the development end, SaaS development is well placed to help businesses that require multiple teams of outsourced specialists to work on specific elements of the project. Effective delegation is the core of SaaS development.

Developing an application using the SaaS model must go hand-in-hand with a strong and clearly thought out business plan. It also requires a thorough understanding of the current market you are wishing to venture into.

Looking for a development partner?

If you’re looking for a technology partner, development team augmentation, or just a company for your software&app development initiatives, consider TMS.

TMS is a software and digital company in Belgrade, Serbia. We develop innovative and modern software.

A few examples include premium booking software Trafft, MedTech apps like MR Prepare, or MarTech/AdTech apps like the Advise Media Suite, among other great software examples.

Check out our services and also some of the work we’ve done for our clients. Who knows, maybe we’ll form a successful relationship.

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If you enjoyed reading this article on SaaS development, you should check out this one about SaaS metrics.

We also wrote about a few related subjects like SaaS pricing models, SaaS vs PaaS, SaaS startups and go to market strategy.