How to Build a SaaS Product: Software as a Service for Business

You’re already using SaaS products even without knowing it. Over 70% of business software use in 2023 was attributed to Software as a Service. The usage of such solutions by companies may rise to 85% by 2025.

Zoom, Google Docs, Slack, and Trello. Sound familiar?

The key question is how to hop on this train and make a SaaS product fast and cost-effective.

How can you make it stand out?

Is it even a good idea to create SaaS software?

What are the benefits?

We at ProCoders have quite an experience with building SaaS products. So we’re happy to share our knowledge! And we’re open to offer our services in case you need a seasoned pro in building Software as a Service.

Want to know how to build a SaaS platform and dominate the market? Keep reading!

Entrepreneurs are set on investing in SaaS technology. As stated by BetterCloud, by 2025 every organization may be a SaaS-powered workplace.

According to Statista, the SaaS market will reach $232.3 billion in 2024.

To put it into perspective: SaaS accounts for $1 out of every $5 spent on software and the numbers are growing. So, we at ProCoders aren’t surprised many business owners want to catch up with the long-lasting trend.

Here is a rough evaluation of the SaaS-related revenue in each region.

SaaS Market Trends

• Artificial Intelligence and Machine Learning: AI is used for automating tasks such as lead generation and sales automation. 80% of businesses may adopt AI in one way or another by 2025.

• Platform as a Service (PaaS): PaaS is gaining traction for improving the development process. It allows businesses to build, test, and deploy applications more efficiently. The global PaaS market is projected to reach $179 billion in 2024.

• Voice Search Optimization: With the rise of virtual assistants and smart devices, voice search is becoming more popular. And SaaS applications optimize for voice-enabled interactions.

• Smart Chatbots: Smart chatbots in SaaS platforms should enhance user interaction and automate tasks. The chatbot market is anticipated to reach $1.25 billion in 2025.

• Rise of Low-Code and No-Code Platforms: These platforms help develop applications with minimal coding skills.

Advantages of Building SaaS Products

Let’s look at the benefits for both end users and businesses.

For end users:

• Convenience: SaaS works on any device with Internet access.
• Always Up-to-Date: Updates happen automatically. Users get the latest features and security without doing anything.
• Affordable: SaaS doesn’t require big upfront costs. Subscriptions are budget-friendly.
• Easy to Try: Many SaaS tools offer free trials. Users can explore features before paying.

For businesses:

• Recurring Revenue: Subscriptions provide steady income.
• Low Startup Costs: SaaS needs little initial investment.
• Scalability: SaaS adjusts to growing or shrinking demand.
• Global Reach: Cloud-based SaaS connects businesses to customers worldwide.
• Reliability: SaaS apps work smoothly through the Internet.

How Does a SaaS Project Make Money?

If you are to build SaaS software, there are several revenue models you might want to consider:

1. Monthly/yearly subscription

Today’s most popular SaaS model is a recurring monthly or yearly fee to access the product, such as Adobe (monthly subscription) or Microsoft (yearly). This method is also called “flat pricing” since the usage has no defined limits. It is easy to track, sell, plan, and predict.

2. Usage-based pricing

You are charged based on how much you use – simple as that. Amazon Web Services, for example, charges you for the number of transactions and the gigabytes of data used. Progressive payments stimulate long-term clients to upgrade their subscription plans, and remission of fees during quiet months supports your image.

3. Freemium

In the freemium model, users get a limited number of free functions and must pay for additional features. “Over,” a popular image editing app, uses this model by offering basic features for free and charging for “pro” elements. This approach is great for viral distribution and market entry.

Possible Challenges of SaaS Product Development

The Complexity of Multi-Tenancy Architecture in SaaS

Multi-tenant SaaS architecture is a crucial factor in application development. However, it also brings challenges in balancing resource sharing with ensuring:

• data privacy
• security
• customization

Types of Multi-Tenancy in SaaS Solutions

Multi-tenancy in SaaS varies widely and is typically categorized into:

• Isolated Tenancy: In this model, each tenant uses a separate instance of the SaaS application. This approach ensures maximum privacy and security. But it also increases costs because of duplicated resources and higher management needs.
• Shared Tenancy: Shared tenancy involves all tenants using the same application and database. This setup is similar to an apartment building where all facilities are communal. It’s cost-effective but concerns data security due to the shared environment.
• Hybrid Models: These models merge the benefits of isolated and shared tenancy. Tenants can use the same application software while having separate databases.

Ensuring Data Security and Privacy

SaaS solutions are almost three times more likely to have security challenges because of external access. And it’s not just dangerous but costly as well. A Ponemon Institute report showed that a data breach costed about $4.5 million in 2024.

So, security requires special attention in SaaS.

Maintaining Regulatory Compliance in SaaS

SaaS applications must meet legal requirements of the countries they work in.

Non-compliance can lead to severe penalties and reputation damage. You can build it for years and destroy it with one mistake.

Regular Updates in SaaS

Developers need to update the app with new features, security measures, etc.routinely. SaaS solutions are great for smooth updates, as compared to traditional software. This is because they are cloud-based.

However, your development team still has to plan them very well. Disrupting user activities or causing downtime can lower the rating of the software.

Building a Team for SaaS Web and App Development

In-House Hiring Challenges

• High Costs of Building a SaaS product: Salaries, benefits, recruitment, and infrastructure significantly increase expenses.

• Talent Scarcity: In competitive tech markets, finding and retaining top talent is difficult and costly.

• Time Consumption: The hiring process can be long and distract from core operations.

• Rigidity: Scaling an in-house team to project needs isn’t always easy.

However, there’s a way out that can help you save up to 99% on HR costs and still get a talented team with experience in your industry. This is outsourcing.

Advantages of Outsourcing

Outsourcing is an alternative with several benefits:

• Cost Efficiency: You don’t have to buy extra equipment, pay for vacations and seek leaves, etc.

• Global Talent Access: You tap into a worldwide pool of skilled developers.

• Scalability: Outsourcing easily adjusts team size based on project demands.

• Speed to Market: Such teams initiate projects quickly without the delays of team building.

All of these benefits are available if you choose an IT partner qualified to develop your idea into a scalable product!

Partnering with ProCoders

So, how to hire SaaS developers? 

For businesses looking for smooth development, partnering with ProCoders opens doors! It provides access to experienced developers who are proficient in the latest SaaS technologies.

ProCoders offers the flexibility necessary to adapt to project changes swiftly. We work to keep you ahead in a competitive market.

With ProCoders, you gain a strategic advantage through expert outsourcing. You also reduce costs while achieving superior development outcomes.

How to Build a SaaS App from Scratch: Step-by-Step

Step 1: Assessing Viability

Start your SaaS product development by determining if there is a real market need for your solution.

Ask yourself, “Is there a genuine demand for my product?”

Research the market, look for competitors, and ask potential users.

For that, create surveys to clarify:

• The demographics and behaviors of your target audience
• The specific issues they want to solve with a SaaS product
• What they look in an app that your competitors don’t have

Step 2: Budget Estimation for SaaS Product Development

Proper budget planning will help you avoid overspending and allocate resources properly.

The budget should include:

• design
• programming
• business analysis
• SaaS customer support
• maintenance
• marketing

Consider potential financial obstacles. You may need to rebuild some parts of the app or pay for additional testing. Marketing may take more from your budget at the time the app will be ready.

Make sure you’re prepared.

Step 3: Choosing a Monetization Strategy

SaaS success depends not just on its features and speed. One more measurement is how much you earn from it, right?

So, choosing a monetization strategy is important.

Effective pricing strategies include:

• Free Trial allows users to try the product before buying.
• Premium Pricing is used by brands that offer exclusive services or features.
• Promotional Pricing temporarily reduces prices to attract attention as the product gains market credibility.
• Market Penetration Pricing sets initial low prices to attract many users quickly.

Your choice depends not just on how much you want to earn. You need to research similar products and audience preferences beforehand.

Overall, the final choice of payment model includes factors like:

• target market
• product features
• strategic goals
• market conditions

Step 4: Selecting the Technology Stack

How to build a SaaS platform? Pick the right stack!

Let’s repeat what components are needed:

• Front-end Development: Vue.js, Angular, or React.
• Back-end Development: Django or Node.js.
• Databases: For greater flexibility with data structures, choose from traditional SQL databases like PostgreSQL, MySQL, or a NoSQL database.
• Hosting Provider: Choose a dependable cloud hosting service.

Step 5: Developing the Minimum Viable Product (MVP)

Here are some key strategies for MVP development from ProCoders specialists:

• Feature Prioritization: Identify and focus on core features that address the primary needs of your target audience, ensuring rapid deployment and early market entry.
• Feedback Integration: Use the MVP to collect and analyze user feedback, which is invaluable for refining the product and aligning further development with user expectations.
• Define User Persona and Journey: Clearly outline who your users are, what actions they need to take, and how your product resolves their issues. This understanding will guide the selection of features to include in your MVP.

Step 6: Test and Iterate

And how to build a SaaS application that succeeds? Test it!

This testing phase helps assess two critical aspects:

• Product Viability: Confirming if the product concept is practical and fulfills a market need.
• User Satisfaction: Ensuring the product meets the expectations and needs of its users.

The more honest thoughts you gather, the more insights you’ll gain, which can be used to refine and enhance your SaaS product.

Step 7: Develop the Final Product

Reaching this stage means you are ready to develop your complete SaaS product. By this point, you should have:

• A validated product idea
• A selected pricing model and strategy
• An established technology stack
• Valuable customer insights from MVP testing

ProCoders can help you with your product’s MVP and final version. You can hire a dedicated team that will handle the development, testing, and even post-launch support and maintenance.

At ProCoders, we pride ourselves on our Discovery Phase, which helps clearly define your needs and tailor a development plan that aligns perfectly with your goals.

With over 10 years of experience in the industry, our teams are adept at assembling quickly and efficiently. Trust us to bring your vision to life with precision and expertise!

Step 8: Ongoing Maintenance and Development

Continuous improvement is crucial in the competitive SaaS landscape. Here are the key activities involved in this phase:

• Explore Growth Opportunities: Constantly look for ways to expand and enhance the product.
• Engage New Customers: Focus on customer acquisition and expanding your market reach.
• Leverage Feedback: Use customer feedback to guide development, focusing on enhancing user satisfaction.
• Fix Bug and Update: Regularly update the product to fix bugs and refine features to ensure optimal performance and security.

By systematically following these steps, you can ensure your SaaS product meets market demands and continues to grow and improve over time.

How Long Does It Take to Build a SaaS Product?

It can take from 4 months to a year, and it’s better to discuss terms with professionals, who can evaluate your specific project.

Here is a very rough estimate of time expenditures to create an MVP of a Saas product like Slack:

Type of Work	Development Time
IOS	800-900 hours
Android	800-900 hours
Back end	560 hours
SaaS UI/UX Design (for one platform)	120-250 hours
Total hours	2610 hours

There’s a way to reduce this number with the approach we at ProCoders have used to save our partners thousands of dollars. It’s called cross-platform development.

It significantly cuts costs and speeds up the development process, especially when paired with compatible frameworks. For example, using Angular for SaaS web development and Ionic for mobile apps, or React with React Native, creates a synergistic effect.

Our Experience in Building SaaS

Frontegg

For example, in two weeks we managed to assemble a whole team for an Israeli startup Frontegg that specializes in plug-and-play development. With the help of our specialists, the company managed to outstrip competitors in the market and occupy a profitable niche.

Our main advantage is that we work with projects at any stage and are ready to quickly respond to any of your requests. Developers at ProCoders are constantly improving their skills and are ready to provide technical advice so that your product is the most relevant and high-tech on the market.

Vsimple

At ProCoders, we partnered with AxisPoint (now Vsimple) to enhance their office appliances rental business by developing a comprehensive CRM system. This system streamlined customer interactions and integrated with billing and order management, evolving into VSimple, a robust Workflow-as-a-Service platform that boosts team collaboration and automates processes.

Facing a talent shortage in Kentucky, we assembled a dedicated team of developers and a QA engineer, managed by AxisPoint’s CTO. This approach accelerated development and aligned the solution with the client’s needs.

VSimple has transformed into a significant product line and a subscription-based service, integrating with Microsoft Dynamics and securing $2.5 million in investments.

Looking for a skilled development team to create a high-quality SaaS app? Aspire to be the best in your industry? Give us a call!

Conclusion: How to Build SaaS Product?

Starting the journey of how to make a SaaS product offers both immense potential and challenges. With its increasing demand for cloud-based solutions, the rapidly evolving SaaS market provides a fertile ground for innovation and business growth.

By understanding user needs, adhering to market trends, and leveraging the right technology, businesses can develop SaaS products that not only meet but exceed expectations.