How to Develop SaaS Products?

WIX, Slack, Datablaster.io, and Zoom. The Software-as-a-Service (SaaS) model is an innovative approach to digital development. Every year these services gain momentum. Forecasts suggest that 80% of mobile startups will use a SaaS marketing model by the end of 2022.

The idea of SaaS is to maintain and develop products without a company needing to build custom software from scratch. One can develop SaaS-based applications with a small budget using cloud-based storage and technologies. 

You can use marketing strategies through platforms like Reditus.

SaaS was a highly profitable business area in 2021. The question of how to create the software as a service that could overcome the competitive challenge and stay reliable in the foreseeable future.  

Our article will help you understand why SaaS will continue to be agile, cost-effective, and highly accessible in 2022. Overall we want to help encourage you to develop software. The advantages of a SaaS have become straightforward for other programmers and startups. So what do you need to do to get your SaaS application developed?  

Checklist: First SaaS Application Steps

The primary idea behind a SaaS-based business is to optimize its customers' resources. The procedure helps startups and corporations in streamlining their bottom line. Investing near-zero capital into a custom tech solution development Provides your customers with a valuable solution. 

Usually, SaaS merchants supply users with ready-made solutions. SaaS businesses must continuously upgrade the technology, maintain the tool, and assist customers 24/7.

How to start a SaaS business? 

Like any other startup, you should define the main pillar points. These items should consist of your future products and enterprise. 

To find these pillar points, you will need to answer these questions:

• What are the targeted audience's needs?
•  What is the monetization model, promotional mechanisms, budget, and technology used for your products?

These points are the most critical issues you must answer to help increase your chances of success. 

Next, you will need to understand the technical architecture required for your Saas application development. Knowing the necessary architecture will influence your overall budget.

Will the application architectural design host data for a single business or multiple businesses. While the second one is cheaper, the first is more secure. So you will need to balance security and money.

If you have multiple businesses on your platform, you will need to invest in data security. Guarantees of higher security levels present a more expensive option. As a result, it might limit the scalability options.

This means you might have less:

• Number of available features 
• The frequency you can upgrade services
• API integration with other services  

Lastly, you need to consider your monetization concept. Are you going to use a subscription, one-off payment, custom packages for your products?

Best practices concerning SaaS technologies show that the proven way to become in-demand and profitable is to learn the target audience's needs. Together with developing and testing brand-new technologies, you will be in high demand quickly.

At the same time, startups tend to build niche SaaS products. We advise your strategy to take at least three steps to cover your Discovery project stage issues. 

Step 1. Research the market

Artificial intelligence (AI), niche-oriented strategy, and mobile app development profits are just market research. You will observe how AR and VR technology is working with entirely new technology. 

These Tech trends will need solutions for their niche innovations. We recommend you keep an eye on the tech world. If so, you can always talk to a mentor within that industry.

Step 2. Know your target customer

You can not market your products to a person you know nothing about, especially when discussing the highly competitive SaaS field.

The issue requires a separate discussion. However, we advise you to develop a portrait of the target audience. Here you should know the needs and fears of your audience.

Define your product. The only way to compel your customers to purchase your product is to provide a solution to their needs or fears. 

Step 3. How customers can use your SaaS product

Now that you developed an idea of the needs of your audience, you need to provide them with information on your product

As you continue your market and target audience research, you will have a better idea of the product you want to develop. Here, you will discuss your products' competitive advantages compared with similar SaaS vendors. Then, you can try to discuss the circumstances your potential customers could conveniently use your product. 

Think of projected users' needs in their journeys and situations. Discuss how your product will provide the ultimate solution when issues arise. 

Technology and SaaS Architecture

Innovative technologies are driving the development of SaaS products. Many companies and private parties are outsourcing their tech tasks using cloud-based services. 

A SaaS development company must invest in research and tech experiments, track innovations, optimize resources, and monitor users' needs to stay competitive.

There are several critical features of SaaS products. The particular features depend upon your product type, market research, or even the available development budget. 

Programming language (Python)

• Cloud SaaS requires a powerful yet simple programming language. Python will cover today's development requirements. Sometimes, companies opt for their in-house developers' most familiar programming language.
• Since there are many language options, it can be challenging to choose. 
• Python is a good choice for SaaS because of its flexibility. Javascript and SQL are very popular for general applications but do not provide flexibility.

Database (MongoDB)

• SaaS products must have a secure document-oriented database. The distinction between this type of database and a relational one is its small scope and the ability to keep data separate flexibly. You can design the database with a modern programming language, like Python. 
• MongoDB can become your primary database with its automatic sharding feature. The database provides scalability and displays good performance. Therefore, you will not lose your technical potential in scaling your business.   

Queuing system (RabbitMQ)

• The Communication protocol, also known as a queuing system or message queuing (MSMQ) technology, helps apps receive and send messages between third parties cooperatively. Therefore APIs and servers can communicate with your application. The message queuing system stores messages and transmits them when secure. 
• The significant advantage of RabbitMQ is its scalability and robustness. RabbitMQ is open-source, free to install, and can interact with various programming languages and operating systems. 

Cloud Computing Services and CDN (AWS)

• The core element of the SaaS development platform is a cloud computing service. All the features you build will be hosted on the cloud computing service. Depending on your needs, the type of service scale, vector upgrades, and the niche you work in will differ. In 2022, a good option is AWS (Amazon Web Services), as it is the most flexible and complete platform. Aws can help you develop, host, test, and run your product. 
• AWS integrates with Elastic Compute Cloud (EC2) as its native element. AWS allows your site to perform well. The architecture will also help you reach resizable computing capacity. There you can scale your tech resources. The locations of your EC2 servers can be selected to provide better speed coverage to your clients. 
• Deciding upon a content delivery network (CDN) is one more element you must select before developing. If you are unfamiliar, CDN is a tool to serve the content of your product.    

Challenges of SaaS Development

The SaaS business vision is to market digital services to customers. It sounds like nonsense for today's users to buy a program on physical media. The capability to regularly update the product software is precious. The SaaS approach provides a valuable alternative for both developers and users. 

One expected commercial model is a subscription. Users buy access to the cloud service on the Internet and use it primarily online. However, there often are offline options without buying additional hardware resources. SaaS developers expect to find the solution of keeping a sustainable service. Thus, they must perform competitively, store data securely, and reduce the risk of system failures leading to client data corruption.

There are four challenges of SaaS software development you should consider at a very early stage: 

Scalability

Your business cannot grow without a scalable tech stack. SaaS startups and SaaS clients work best with scalable technology. SaaS startups could display slower performance as the number of clients increases. SaaS clients would have difficulty operating if cloud service were to shut down due to an overload.

Issues connected to the target audience size could become a problem when you scale up. Your SaaS product might not have enough customers to cover your business maintenance bills as a startup. Therefore starting with affordable service that can be scaled up later should consider. 

Security 

As a vendor, you must ensure data privacy to your customers. The protection of personal data such as bank information must be protected for apparent reason. However, it is also vital to protect commercial secrets. In these cases, you will not just lose your business, but enormous fines could be around the corner. 

Reliability

The AWS SaaS architecture is considered the most reliable platform for cloud software maintenance. These systems operate with physical servers within a specific geographical location protected from damage.  

AWS takes care of its hardware and securely backs up all the information, a considerable advantage.

AWS also prevents the shutdown and overloading of your websites. They provide surge protection that quickly scales the servers when traffic spikes occur. Switching from different plans offers different levels of security. 

Monetization concerns 

The causality why people use SaaS products is their cost-effectiveness. Businesses and private users don't always have (or are willing to spend) the resources to establish custom digital services from scratch. The SaaS approach helps users share the tech development costs in areas where specific solutions are applicable. 

At the same duration, the provider's service must not be too expensive. You should study the target audience's software budget. Knowing this can help you craft a method for your clients to feel like they are getting a great deal. Therefore, you will be able to develop a sustainable monetization model. You will know how to add product upgrades and maintenance to the users' bills. 

Monetization Models  

The SaaS architecture might seem crystal clear in comparison to monetization concepts. Analyzing cloud services like Salesforce, MailChimp, or SurveyMonkey, you may notice that there are several approaches to stabilization.

Project timelines, budgets, and marketing expectations can help you decide on your marketing model. Below you will find the most common monetization concepts. Many successful businesses mix these models to avoid substantial financial risks. 

Free service with ads 

• Free apps will reach many users. An excellent way to test your marketing hypotheses and conduct marketing surveys in real-time. 
• Monetization can occur with in-app advertising. Another advantage is that you will receive immediate revenue. However, in-app ads take away from your UX design.  

Freemium model 

• Provide users with free basic functionality. After registering, they then purchase access to premium features. 
• Most apps start on the Freemium model, and the expanded functionality can be purchased through a subscription plan.

Subscription plans 

•  Establishing a service subscription system that provides customers with access to your services limited by time is essential.  

One-off purchase

• The one-off payment approach is not popular. You must consider how your Saas environment is upgraded. Should it be automatically upgraded? Paid-for applications sustainability needs constant customer leads. Customers could view your product as expensive due to a high price point.
• There is also one more vulnerability. Not everyone is willing to purchase a product they have not tested first. You will need to work on your branding to reduce these stigmas.

How Much Does It Cost to Create a SaaS Application? 

The development expenses depend on many factors. The most critical issues are the number of features and integrations, design and architecture complexity, target market, and project timelines. There are also factors as the country of development. The contrast between app development expenses in the US and Ukraine is over $100 per hour. 

In general, SaaS application development budgets have several elements. Someone will need to design, program, analyze business, and maintain servers and software. Thus someone will need to be paid for this work. Outsourcing is a cost-effective way to mitigate expenses if you have a limited budget.

UX and UI design 

The main screens, additional screens, interactions, and profiles could cost up to $15,000.

Even SaaS businesses need clear and attractive interfaces. Designers must conduct research or get it from the marketing research team to develop one that fits your needs.

The Discovery project stage can help create guidelines by targeting the requirements and tastes of your audience. 

Define the primary design goal to enhance your project. Do not forget that your services should be scalable. So it is a good idea to create an attractive design and define your business's visual tone or voice. 

Servers

It depends on the number of users, but it could cost between $30 to $8,000.

Hosting servers can be where many SaaS development companies spend most of their funds. As the number of customers increases, you will need to increase your server potential. 

Monitoring software and tech maintenance 

Depending on the number of users, it could cost up to $3000.

Increased reliability of your product needs you to track performance. The ability to incorporate powerful monitoring software will allow you to know why something went wrong. As you receive more resources, you will need to monitor the system further. 

Another question is, "How to maintain the technology and software?" When an alert appears, a programmer should be available to resolve the issue. Services can also be outsourced to fix the problems as they arrive. 

Development and tests 

Depending upon the features, you could spend up to $20,000

We are mainly worried about building SaaS applications and gaining your first customers here. The product is difficult to calculate according to user feedback, prototype building, MVP development, QA, deployment, and upgrading. You will need to know the specific features needs. The anticipated size of your audience also matters as more people mean more resources are required.

Also, consider using ~10% of the development budget for marketing. The most important aspect of getting sales is putting it in front of the audiences' eyes. Branding, content marketing campaign, and feedback study strategy should be carefully planned and started long before the actual development occurs.  

Want to test things? Check out no-code tools and try it out the Growth Hacking way.

The Bottom Line

SaaS development platforms are a business field to think about in 2022. This past year, the size of the SaaS market is forecasted to reach $157 billion. SaaS development is an essential sales funnel for nearly half of all digital businesses globally. However, the SaaS market is highly competitive.

Blockchain technology, AI, and machine learning development will continue to shape the area. However, your innovative SaaS development will have a place in the future.

Outsourcing SaaS development must be aware of specific tech issues considering the final product: programming language, database, queuing system, and server specifics. You'll find it challenging to source a digital engineer with pure SaaS experience. That is why you will need at least some tech stack experience to choose the right specialist within the global talent pole. 

Meet the author

Joran Hofman

Back in 2020 I was an affiliate for 80+ SaaS tools and I was generating an average of 30k in organic visits each month with my site. Due to the issues I experienced with the current affiliate management software tools, it never resulted in the passive income I was hoping for. Many clunky affiliate management tools lost me probably more than $20,000+ in affiliate revenue. So I decided to build my own software with a high focus on the affiliates, as in the end, they generate more money for SaaS companies.