SaaS Development: A Guide to Building Your Own SaaS Product

Yana Morozova

Yana Morozova

IT copywriter

#Business Automation


13 May 2021

Reading time: 17 min

13 May 2021

Software as a Service (SaaS) is a business model that covers a variety of applications sharing two traits: software works without installation and is accessed by a regular subscription fee. This model benefits all: customers gain a comfortable UI, better tech support and pay less to use powerful software, while SaaS vendors acquire ongoing profit flow and customer feedback.

Gartner claims that, by 2020, total SaaS market profits may reach almost 144 billion. Businesses big and small are moving to the cloud, so now is the right time to consider developing your own SaaS product. This article will be useful if you are curious about what drives people to choose SaaS over other solutions, why the SaaS business model is beneficial and how to build a SaaS product.

SaaS Business Model: Everything you Need to Know

Basically, SaaS has a core that is stored in the cloud and multiple users that are connected to the cloud via the internet can work with the software. Most SaaS software is fully functional within a web-browser. For example, this article was written in Google Docs, which is a free SaaS solution. All data is saved automatically on the cloud and, to start working, you just need to open the web application

The SaaS model applies to many other applications: there are streaming services, social media, lab security and even a system for automatic vertical farm management that we had experience developing for iFarm. The system is responsible for growing cheaper produce in a short period of time.

How SaaS model differs from traditional software distribution

Major Types of SaaS

SaaS is divided into two solutions: vertical and horizontal.

  • Vertical solutions focus on a particular industry. This software is commonly designed by experts for experts. The market may be narrow in this case, but this makes the target audience clear and easier to appeal to given the necessary expertise.
  • Horizontal solutions are meant to cover the needs of a certain department or function. They target a wide audience of users in their industry. Such solutions are developed to support as many customers as possible. Salesforce, Slack and Dropbox are examples of horizontal SaaS.

How SaaS enhances customer experience

Customers enjoy a lot of SaaS features:

  • Lesser fees. Pricing models for SaaS applications tend to be affordable for most customers, whether it’s B2C or B2B SaaS solutions.
  • Scalability. Most software vendors offer various subscription models, the most common ones being Freemium (comes for free with basic functionality) and several tiers of Premium, each tier costing more than the preceding one while gradually increasing functionality and tenant number up to a certain limit.
  • Tech support. Bug fixes and updates to new versions are included in the subscription fee.
  • Ease of use. Since SaaS applications are pre-installed on the cloud, all the updates are implemented smoothly by the service provider without client involvement. 
  • Data security. Cloud providers have to be licenced for proper personal information storage. Emergency backup protocols are executed to ensure client data is safe. 
  • Availability. Customers only need access to the internet and a compatible web-browser to use the production. Additionally, most SaaS products offer licenses for multiple devices stemming from one subscription. 

Trial period. Before subscription, customers get to test whether the solution matches their demands.

How SaaS Benefits your Company

Some benefits that clients are experiencing are also available to the suppliers: accessibility to management and monitoring via the internet, tech support for chosen cloud services and scalability to match tenant numbers. There are also some advantages unique to the suppliers:

  • Long-lasting revenue. The SaaS sales model regularly charges clients, ensuring constant profit flow.
  • Larger customer adoption. Smaller fees draw more customers to the product as people are more willing to pay lesser amounts monthly than the full price upfront. The trial period also attracts customers who are unsure of software until they test it.
  • SaaS startups cost less. The core of the product and its infrastructure resides in the cloud, freeing money reserved for physical servers to the development team focusing on the application.
  • Reliability. Application and client data is stored and backed up on multiple servers across the world. In case of a server malfunction, another will take its place smoothly.
  • Better data insights. A cloud server provides support for collecting and processing Big Data. By extracting a proper view on a customer’s demands, companies can design better marketing strategies.

Cloud perspectives 

A study by 451 research claims that, in 2020, being unsure of cloud migration sets your business behind 90% of other companies. More than 88% of respondents to O’Reilly’s research in 2020 mentioned using the cloud in one way or another, while 25% stated that their companies are planning on migrating to the cloud in the next year. The cloud-based services market is growing steadily and most enterprises trust their entire workload to the cloud. Forbes also adds that cloud-based solutions will play a major role in the post-pandemic future.

Speaking of fields where cloud solutions have proven themselves useful, almost a quarter of O’Reilly’s respondents were from the software industry, the second largest groups were finance and banking, followed by consulting and professional services.

Cloud perspectives


SaaS is the most full-fledged out of the three public cloud markets (the two others being IaaS and PaaS). Synergy Research Group states that software providers were generating a profit of $23 billion in Q1 2019, thus reaching an annual profit of $100 billion, supporting the Gartner predictions mentioned earlier.

The statistics prove market interest in cloud-based software, especially post-pandemic. A lot of companies that are moving or have already moved into the cloud report positive experiences. If there’s a right time to build a SaaS product, it’s now.

How to Develop a SaaS Successfully?

Let’s imagine you’ve decided to create your own SaaS application. This part of the article will provide a few tips on how to get started with SaaS product launch plan and what to focus on.

Examine the market

Before you dive into the development of a SaaS product, take some time to research the market. Define the following:

  • What demand is there for your product?
  • What is your target audience?
  • What do they want from the product?
  • What are the competitors?
  • What is unique about them?
  • How can you learn from them?
  • How can you improve on what they do?

Answering these questions you may refine and redesign your idea in a way you could never have imagined without research. Also, SaasS product launch plan will become refined if you are aware of the basic needs of your clients. Holding a few surveys will also heighten the chance customers will take interest in your future product as it will be tailored to match their answers.

Essential SaaS features

The market for SaaS providers is wide and, before you can stand out among the others, you must check that your solution has all the basic features of a SaaS product.

  • Scalability is what most users enjoy about SaaS platforms. The ability to expand and decrease their business processes, share data to multiple devices and pay only for what is necessary for them is a must for every SaaS application.
  • Cross-platform helps increase accessibility. Your application should be available on multiple web-browsers, support mobile versions and work for iOS and Android.
  • Support and customization are required as your customers expect quality of life updates, new features and bug fixes to justify their continuous payments for your software. 
  • Flexibility is responsible for how many clients will adopt your software and stay connected. Calculate prices so your audience can afford it, or you’ll lose them to competitors.
  • Marketability speaks for itself. If no one knows about your software, no one will use it. Put your marketing team to work to make your product well-known. Hold sales and offer discounts, collaborate with cross-cutting companies to exchange customer flow.

Beyond this, there are a few additional aspects you can consider while developing a SaaS product such as having a user-friendly interface, adding automation, integrating machine learning, containerization, but these depend on the specifics of your SaaS solution.

Vital SaaS product functionality

Let’s imagine you’ve decided to prepare for your own SaaS launch. This part of the article will provide a few tips on how to get started and what to focus on.

SaaS Development Lifecycle

Now that you’ve learned about the market, considered major SaaS features and established your pricing strategy, the next step is to assemble a team and begin the software development process.

The SaaS development lifecycle is not that different from any other product development’s lifecycle. We will discuss a few common steps to provide you with a better grasp on the process.

Step one. Pitch an idea

After your project gets enough envisionment, to put it into a more tangible form, you’ll have to find a capable development team. A brief and product plan of your future SaaS will provide the contracting company with concise outlines to work with. The more precise details will be discussed later on. This step is for you to evaluate contractors and for contractors to figure if they are up to the task. 

Step two. Pick a platform 

One of the most important steps in SaaS development is to choose a cloud vendor. Will you create your own cloud space or rent it? Whether you are renting or constructing a new one, to deploy a project in the cloud, look at:

  • project architecture and requirements regarding the cloud platform;
  • platform performance, scalability, reliability and data privacy compulsory for a SaaS product;
  • challenges that may occur in project implementation into the cloud.

This way you can assess whether your company can afford its own cloud construction to put into a SaaS product launch plan or you will write the rented one into it.

Step three. Create a prototype

Now that the development team has been defined, a SaaS product launch plan has been decided on and the platform is ready, the first order of business is to create a prototype: a scheme of how the product will work, what its functions are, and the basic UI. Consider monitoring and management tools that will help you control the service later. Then, product design is implemented, giving your prototype a fresh, unique look, that’s attractive and user-friendly. 

Step 4. Develop UI and Backend 

Once the prototype is finished, the development team has a solid grasp on the product they are making. Web designers start producing user interfaces and backend developers are on to further sophisticate the product’s architecture to the point where it matches planned functionality.

Step 5. Test your project

Assign testers to examine the entire product’s functionality. Check if the systems are working right, how your infrastructure responds to peak workloads, whether it’s scalable, and look for any security breaches. At some point during this process, you can turn your project into an MVP to access early responses from the users too. The goal of this step is to polish your product so that it’s ready to be released.

Step 6. Release the product

As mentioned before, the work isn’t done after the SaaS product launch plan is completed. It’s more of a constant cycle of improvement: listen to users’ feedback, provide bug fixes and updates, think of customization options for your clients. There is a lifetime of support you’ll need to put into the project, but, in return, you can have a lifetime of profit flow if you put enough work into it.

How much does SaaS development cost?

Honestly, it depends on your SaaS launch plan you wish to achieve. Cloud-based applications come in various forms, so it’s impossible to assume a common cost. Let’s look into criteria that impact the cost of a SaaS product.

1. Project scale

How ambitious is your project? What is the scope of it? Is it vertical or horizontal? The larger the project scale, the more expensive it would be. If you create a platform of a few instruments, this will cost more than a single-focus instrument. 

2. Functionality

Complex functionality will cost a lot. If this SaaS product is your first try, start with the most essential features. You will be able to add additional features later on.

3. Development team

There are three ways to develop a SaaS project: choose your own team, hire freelance specialists or hire a company. The price gradually grows from option to option, but when hiring, it’s best to look at a company. Freelance specialists rarely tend to create high quality products while a company values its reputation and will provide the best service as well as support you along the first months after project release.

Trust Azoft in SaaS development

Although it comes with its challenges, the SaaS business model has a lot of benefits to offer your business. If you are considering hiring an experienced team of developers to create a SaaS product or assist with the SaaS product launch plan, the Azoft team is here to help. Please, feel free to take a look at our case studies or contact us to discuss what you have in mind for your project.


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