How to Develop SaaS Apps: A Handbook for Cloud-Based App Development

Software as a Service (SaaS) has become a feasible alternative to conventional programs that you must install on your PC. Moreover, SaaS applications are gradually superseding regular software solutions, with the SaaS segment volume equaling $273.55 billion in 2023 and promising to reach a stunning $1,228.87 billion by 2032. 

Is it worth investing in your own SaaS product development? SaaS apps offer enticing benefits to their owners and users, including easy market entry and resilient revenues. Together with the elevating demand, this shapes favorable premises to join the niche. However, these factors also make the SaaS industry extremely competitive.

We will guide you through multifaceted SaaS product development techniques and describe how to create a SaaS application from scratch.

Understanding SaaS

In a nutshell, the SaaS concept implies what its name suggests – Software as a Service. It refers to a method of delivering services, where entrepreneurs offer their apps and programs under a license or a subscription. 

These programs are cloud-based, meaning users need neither to purchase the software nor to establish any additional tools or servers. Instead, they reach the necessary solutions via a browser, mobile application, or API. Ultimately, customers get a complete and ready-to-use product online.

The SaaS tool is offered by a cloud service provider (CSP), without posing the necessity for a consumer to acquire the entire product outright. This is exactly what stands behind the term “as a service.” 

Consumers typically provide a subscription payment according to the provider’s monetization approach and their demands, making the deal favorable for both parties.

Advantages of Developing a SaaS Application

Firms planning to unfold their own Software as a Service application can count on the following upsides.

• Easy-to-enter niche. The SaaS solutions market has low entry barriers. Specifically, it requires less starting investment and technical prowess than conventional programming procedures.
• Sustained income. If you seek expansion, the cloud model will suit your requirements. SaaS software can grant resilient revenues thanks to a variety of monetization methods. Furthermore, you can reinvest and continually enhance your business.
• Low starting costs. With SaaS app development, you don’t need expensive infrastructure.
• Easy scaling. You can painlessly attain business growth, without substantial investment or infrastructure changes. Low expenditures, in turn, mean lower prices for consumers, which increases your envisaged user community.
• Global user audience. Your potential audience is only limited by the availability of the internet connection. Thus, your business can exponentially extend its target community.
• Safety and updates. Hosting providers initiate systematic security and feature updates, minimizing the threat of fraudulent access and delivering the highly advanced features. Furthermore, a subscription-oriented method prevents unauthorized copying of the program as it doesn’t provide product ownership.
• Greater consumer value. You can research your consumer groups and fine-tune your app to their needs. By improving your SaaS application and elevating benefits, you’ll increase consumer trust, engagement, and loyalty.

What are the Different Kinds of SaaS Applications?

Software as a Service solutions are generally divided into two fundamental groups – horizontal and vertical applications.

The first entails products vastly applicable to numerous organizations and sectors, while the latter refers to industry-specific programs or those that target particular types of organizations.

Horizontal SaaS programs encompass the areas that practically any business deals with, such as CRM, storage, delivery, etc. Vertical SaaS tools are narrowly targeted and include tailored features, for instance, financial report programs for enterprises or electronic healthcare records for medical institutions. Procore for the construction industry and ShopKeep for retail are the specialized SaaS app examples.

By discovering the most widespread options of SaaS products, you’ll shape a vision of the ways to address your target community's demands.

Read also: Micro-SaaS Examples and Development Tips

Customer Relationship Management (CRM) Programs 

CRM apps are intended to administer consumer rapport and enhance marketing undertakings. A crucial part of a firm’s workflow, CRMs empower users to accumulate consumer data and shape their marketing efforts underpinned by the derived insights. 

These programs are plentiful in the modern market, with renowned examples being Hubspot, Salesforce, and Pipedrive.

Content Management Systems (CMS)

Placing content about your organization is tightly intertwined with marketing success. CMS Software as a Service solutions deal with all facets of content creation and publishing. 

They allow consumers to craft and govern content, including text, images, and videos, and effortlessly administer web pages. The brightest examples comprise WordPress, Wix, and Shopify.

Enterprise Resource Planning (ERP)

Operational planning is a comprehensive process within an organization. The respective software solutions help businesses handle the working procedures in various areas including inventory and order administration, task planning, resource control, financial assignments, and more. 

SaaS apps help expedite and facilitate these tasks. Oracle Netsuite and Infor CloudSuite, for instance, deliver convenient automations, decrease human involvement, and reinforce performance.

Project Management Software 

These SaaS apps are introduced with the tools for planning, executing, and controlling projects. They help allocate resources and track progress, raising operational efficiency and improving internal communication. 

Eventually, they help expedite the project completion and minimize errors. Such products as Asana, Trello, and Jira are remarkable examples of project management solutions.

Communication and Remote Collaboration Solutions 

Communication and storage tools have massively expanded in recent years. Many businesses today rely on cloud communication platforms and file-sharing applications. 

Zoom and Microsoft Teams are broadly utilized for video conferences, Slack for chatting, and Google Drive for file storage. These apps grant abundant flexibility with regard to chatting opportunities, video calls, appointing and recording meetings, exchanging materials, and more.

Marketing Applications 

Marketing activities are necessary in any sector, if an organization wishes to combat the competition. SaaS marketing apps streamline marketing efforts by aiding in all aspects of marketing planning and execution, from data collection to campaign implementation and results evaluation. 

These tools span all kinds of marketing interactions, including email, social media, SEO, chatbots, etc. The examples of SaaS programs for marketing embrace Google Analytics for performance analysis, SEMrush for SEO, and Mailchimp for multi-channel campaigns.

Billing Solutions

A vital part of the accounting process, billing and invoicing are exceptionally demanded functions SaaS apps can deliver. Billing solutions process payments and provide quick and secure checkout. Stripe, Zuora, and PayPal are several instances of trustworthy providers. 

Recognizing the impressive variety of modern SaaS app categories, entrepreneurs should keep in mind the fierce competition within each subsegment. Therefore, it could make sense to consider tailoring a more targeted vertical SaaS program.

How to Build a SaaS Product: 8 Fundamental Steps

We are now ready to explore the fundamental steps you need to take throughout the SaaS application development process. 

1. Prove Your Idea’s Feasibility 

Namely, check whether your product’s idea appeals to your target community and addresses their needs. This is a reliable method to justify your investment and guarantee your solution will be demanded.

You can validate your idea through the following steps:

• Fulfill market research. Study the niche and assess the potential demands. Learn the industry trends and reveal the gaps your intended product can fill.
• Examine your target group. Identify the user community your solution would serve. Research them meticulously to uncover their needs and preferences. You can speak with the target audience’s representatives directly or conduct surveys to shape an accurate portrait of your consumer and find out whether your product really meets their aspirations.
• Analyze the offers in your niche. Accumulate information about the products introduced in the segment. Evaluate their upsides and downsides to uncover opportunities for a new solution. You will strengthen your product by incorporating relevant features underserved by competitors or addressing their weaknesses.

2. Identify Your UVP

Based on the analysis in the previous stage, identify your unique value proposition (UVP). By clearly stating the exclusive value your solution will bring, you'll differentiate your offering and explain to the users why they should favor it. This differentiation will underpin the effective marketing strategy that would lead to greater conversions and raise consumer loyalty.

3. Determine Features of Your SaaS Offering

When building a SaaS application, you must recognize the features that would distinguish your solution and help you outpace rivals.

Here is an outline of the feature prioritization process:

• State your business objectives;
• Reveal consumer needs;
• Identify your product opportunities;
• Accumulate relevant feature ideas;
• Determine the strongest features.

When ranging features, keep in mind your UVP and cost efficiency. Then, subdivide features into categories, such as critical, UI/UX, navigation, performance, and auxiliary features. Avoid falling under the temptation to include everything at once. Rather prioritize the most vital ones to make an MVP app for a SaaS project, with further functionality extension.

Regardless of your product's core focus, your app’s primary functionality should embrace the following areas:

• User management;
• Security;
• Billing;
• Navigation;
• Customer support;
• Scaling.

4. Choose the Appropriate Monetization Method

A rewarding step of SaaS application development is selecting how exactly your app will bring you income. When identifying the revenue model, you should adequately balance the value proposition, competitiveness, and fair pricing. 

Let’s dive into the different kinds of pricing approaches you can apply.

• Subscription-based pricing. Consumers pay a monthly, quarterly, or annual fee to use the program.
• Usage-based pricing. Clients are charged according to the service usage, which can be measured by API calls, storage, information usage, or other parameters.
• Per-user pricing. If your app implies a team-based use, i.e., project management tools, you can charge consumers according to the number of staff members exploiting the solution.
• Flat-rate pricing. An established price for access to all features, regardless of usage or company size.
• Per-feature pricing. Users pay for the demanded features, shaping a custom service package. They can switch to larger functionality at a higher cost.
• Tiered pricing. If your cloud based app can be used in diverse ways, you can arrange several packages with varying opportunities. Each will have its price and match the demands of a specific consumer segment.
• Freemium model. Consumers obtain a free version of the software with basic features, with the opportunity to engage in a more advanced paid version.
• Storage-based pricing. As it comes from the model’s name, users pay for the storage volume. Some storage capacity may go for free, while the exceeding amounts will be subject to payment.

5. Define the Tech Stack

The correct tech stack for your cloud-based app development is as important as reliable materials for constructing your house. The project’s tech stack includes programming languages, frameworks, and tools to assist you in crafting a powerful solution.

SaaS development usually falls into several categories, each comprising the respective technologies:

• Front end: encompasses all elements the clients see and interact with. Building this part mostly deals with JavaScript frameworks, including React, Vue, or Angular.
• Back end: handles the server side of your custom SaaS app. Professional developers often utilize Node.js, Laravel, Nest.js for efficient SaaS application development.
• Databases: store the information for your cloud app. Their types vary, while the common ones include MySQL, PostgreSQL, and MongoDB.

6. Establish a Product Development Roadmap

Once you’ve identified your app’s idea and features, it’s time to start outlining a SaaS product roadmap. This part of the cloud based app development aims to pave your way toward crafting the SaaS offering according to your vision and consumer aspirations.

• Split your SaaS product development lifecycle into stages, including ideation, Minimum Viable Product (MVP) construction, beta testing, adjustments, launch, and support. Set goals and deliverables for each stage.
• Establish a timeline for each stage. Acknowledge the jobs’ complexity, resource requirements, and interconnections between stages.
• Create a clear and informative roadmap visualization. It should represent the core project stages and their time frame.
• Plan your scaling. Consider which changes or upgrades you are going to implement with subsequent product iterations.
• Observe your roadmap continually while building a SaaS solution to ensure you are keeping the right course and make adjustments, if necessary.  

7. Choose a SaaS App Development Team 

Finding a professional, responsible, and committed team is vital to construct a winning solution. The SaaS application developer who shares your values and goals will relentlessly seek to fulfill your task in the best possible way. How to find such a partner?

We recommend prioritizing the companies with the experience relevant to your product and niche and expertise in the technologies your project requires. It’s also vital to make sure they thoroughly understand your requirements, goals, and limitations. The optimal SaaS software development team would share your values and maximize your gains.

8. Build Your SaaS Product 

As the name suggests, this step deals directly with Software as a Service solution development. This comprehensive process is typically divided into several phases:

• Discovery session. During this phase, your SaaS product development team examines your project and business. They evaluate your goals and plan the working process in detail.
• UX/UI design. SaaS product design entails creating wireframes and interactive prototypes to visualize your solution.
• MVP development. MVP is a basic model of your product, constructed within short timelines and with minimum resources. It introduces only the core functionalities of your solution, unveiling the fundamental product idea. We recommend incorporating multi-tenancy, API integrations, and security for your MVP. This guarantees a viable SaaS app at launch and the capability to scale and integrate into the user's workflows while reliably protecting data.
• Quality assurance. QA specialists conduct testing to reveal any weak areas before the coding is done. This way, you’ll save significant time and resources by fixing the issues early.
• Launch. Once the QA testing is over, the product is ready to see the world. At the launch phase, you make your solution available to users and search engines and lay the background for further scaling.

As soon as your SaaS app comes alive, continually monitor its performance and encourage consumer feedback. Thus, you’ll enable a timely response to any gaps or altering user requirements.

In Conclusion: How to Make a SaaS Application

Based on the information discussed above, what is the ultimate answer to the question “How to create a SaaS application?”

Essentially, you should understand your audience, a specific pain point your solution is going to relieve, and a core value proposition that would set your app apart. You can enter the market rather quickly and cost-effectively by focusing on the fundamental features and planning the development process wisely, with the help of trustworthy SaaS app developers. 

SDA can aid you in building a SaaS product since we have over five years of successful software development experience and dozens of delighted clients. Our team is well-versed in advanced technologies and custom SaaS development in particular. We exercise a holistic approach to every project, carefully considering the goals, optimizing the tech stack, and engaging the most appropriate experts. 

Tell us your product idea and we’ll come back with an actionable implementation plan to craft your winning solution.