Master SaaS Application Development: From Concept to Deployment

How Do SaaS Applications Work? 

Software as a service (SaaS) means you don’t have to download and install an app or build an in-house infrastructure to support it. Instead, you access the app via the Internet and let the provider handle processing, data storage, and other features. 

“You should always put user convenience as your top priority, and this is where SaaS applications excel. Your customers don’t need to install anything on their computers; they can access the solution anytime through their browser. For businesses, there are plenty of advantages too. SaaS applications are much more cost-effective. You don’t have to invest in hardware, manage servers, or hire a support team—your SaaS provider handles all of that. This lets you focus on creating an exceptional product,” 

explains Nazar Kvartalnyi, our Chief Operating Officer.

Other benefits of SaaS include the pay-as-you-go model, which means you can start and stop using the software whenever you want without incurring extra expenses. Moreover, thanks to redundancies and backups, SaaS providers upgrade their solutions without disrupting your operations.

SaaS Application Development Benefits

SaaS solutions can positively affect your business. Here is why:

Cost efficiency

A cloud service provider would be maintaining and managing the application for you. And SaaS application is typically consumed on a subscription-based model which is either on an annual basis or a monthly basis. There’s no need to buy and maintain expensive hardware, and you only pay for the resources your app uses.

We decided to calculate how beneficial this could be.

Imagine you’ve created a project management tool using the SaaS business model, and you’ve set the subscription cost for a single user at $10. Plus, there are no additional expenses. In your first month, you attract 1,000 users, bringing in a total revenue of $10,000.

Now, let’s look at the traditional model. Right from the start, you need a significant investment. For instance, you’d have to spend around $10,000 on servers and other equipment. This means you’d be operating at a loss initially.

Scalability

You pay for the resources you use. Besties, it’s possible to scale them up or down whenever necessary to address your current traffic, load, and other conditions. Moreover, scaling up doesn’t require significant infrastructure investments, which is vital for SMEs and startups.

“For instance, you might find that your application experiences seasonal demand. In that case, you can easily scale back your resources to cut costs during that period. Plus, SaaS providers offer a ‘pay-as-you-go’ model. This means that if your user base suddenly decreases, your costs will decrease accordingly, so you won’t incur any losses,” 

explains Nazar Kvartalnyi.

Security

Most SaaS providers follow the shared responsibility model. This means they take full responsibility for the physical servers and cybersecurity. All you need to do is train your users on how to use the system and assign key roles within your team.

Reliability

Most SaaS solutions rely on global data center networks with multiple backups and redundancies. It maximizes the running time and reduces the risk of failures. Thus, your business operations run smoothly, keeping your customers happy and loyal.

“Cloud solutions from major providers like AWS and Microsoft Azure are built on numerous data centers around the world. This allows you to store your data in different regions. Furthermore, your data is duplicated across multiple data centers. If one data center goes down, the system automatically switches to a backup. This ultimately enhances user convenience, as they don’t have to worry about loading speeds or security,”

says Nazar Kvartalnyi.

Accessibility

Enterprise customers and end users always have access to the latest versions of SaaS applications. Your solution will be available on any Internet-connected device worldwide.

Updates

SaaS providers handle updates and automatically deliver them to individual devices without disrupting workflows and wasting office hours.

Bigger customers base

With SaaS applications, businesses extend their reach to new customer bases. They offer better UX and save time on development and maintenance.

The Most Sought-After Types of SaaS Applications 

There are many types of cloud-based SaaS applications addressing different business needs. Let’s review the most widely adopted (and, consequently, profitable) solutions.

Customer Relationship Management Software (CRM)

CRM automates sales and marketing processes, stores all customer data, and improves user experience. According to Forrester, 70% of surveyed businesses use CRM in customer support. B2B marketing automation and field service also see a 60+ % adoption rate. 

Moreover, companies continue to increase their CRM spending, seeing improved customer satisfaction and operational efficiency. Salesforce, Hubspot, and Zendesk are well-known examples of successful SaaS-based CRM software. Still, considering growing CRM demand, it is a lucrative niche. For example, a pay-per-user subscription model can generate increasing revenue as businesses capitalize on CRM benefits, grow, and require access for additional users.

Enterprise Resource Planning Software (ERP)

SMEs and large enterprises use ERP for budgeting, forecasting, tracking, risk management, and decision-making. In the EU, 37.9% (small businesses) and 86.3% (large enterprises) used ERP in 2023. 

Companies report reduced expenses and increased efficiency and customer satisfaction rates, so businesses don’t mind the 2—to 3-year payback period. SAP and Oracle remain the global ERP leaders, but many small-scale ERP solutions emerged over the last decade. And there are still niches for profitable ERP development.

eCommerce Software and CMS

With content management systems (CMS) and eCommerce tools, businesses save money on website development and set up instant online storefronts to start generating revenue. These SaaS solutions support product management and payment integrations, enabling SMEs to digitize their offers. Considering these business benefits, the demand for eCommerce CMS platforms is continuously increasing, making development a sound investment. Prime examples of successful SaaS solutions include Shopify and BigCommerce.

Communication Platforms

Businesses use communication platforms for internal messaging. They create knowledge bases, keep track of informational resources, and streamline communication pipelines within departments and between them. The toolsets vary depending on business needs. Some famous examples of SaaS communication platforms include Slack and Microsoft Teams. Yet even more companies are looking for customizable SaaS solutions, making their development profitable.

Project Management Software

Project managers use SaaS tools to develop workflows, allocate resources, track deadlines, and communicate with team members. Tools like Asana, Atlassian, ClickUp, or Monday.com increase productivity, improve collaboration, reduce scope and budget creep, and boost employee satisfaction. Most businesses try several solutions before finding the best value for money, so there’s potential for carving out a market niche for new players.

HR/HRM Solutions

SaaS HR management solutions cover all major tasks, from onboarding and performance tracking to payroll and offboarding. Like most operational automation solutions, these SaaS products make HR management more efficient and secure, boosting productivity and reducing costs. As more businesses adopt SaaS HR management software, there’s always room for innovative offers to compete with ADP, Gusto, Sage, and Workday, which are prime examples of SaaS HR management solutions. 

How to Develop a SaaS Application

There is no doubt that it is a challenging and complex process to create a SaaS application from scratch. Here are a few steps you should take into consideration to make the SaaS application development process smoother.

Generate and Validate Your Idea 

Absent market need remains among the top reasons for startup failures. That’s why market research is critical for validating ideas before you begin to develop a SaaS application:

1. Study the demand for similar solutions. See what challenges your industry or niche commonly faces. Focus on the most painful issues that remain unaddressed.
2. Determine the target audience. Study the businesses that could benefit from your idea and their commonalities, characteristics, and budgets. There’s no point in developing a solution your potential customers can’t afford.
3. Explore potential competition. See what your main competitors offer and analyze their strengths and weaknesses. This way, you will develop a unique value proposition that will entice their current or potential clients to switch to your offer.

By the end of this step, you should clearly describe the problem your SaaS product should solve, create a unique value proposition, and develop a detailed portrait of your target audience. 

“If our client has an idea but lacks a clear plan, we start with the discovery phase. Together, we explore the challenges consumers face, what existing solutions are available, and what they’re missing. Another crucial step is interviewing real people to gather insights. To validate the demand for your solution in real-world conditions, I also recommend creating a simple landing page and inviting people to sign up for launch notifications. This way, you can gauge how relevant your product really is,”

explains Nazar Kvartalnyi.

Create a Comprehensive Business Plan

With a comprehensive business plan, you will gain funding, streamline the development process, and make informed decisions based on your objectives. Aside from the basic descriptions of your product and company, a business plan should include the following:

• Market research results generated at the discovery phase
• Target audience description and portraits for UI/UX designers, marketing, and sales teams
• Revenue model and pricing based on competitors’ rates
• Marketing and sales strategies for generating leads and converting them into sales
• Financial requirements and milestones, including funding needs and expected ROI
• Personnel requirements for development, marketing, sales, support, and other departments
• KPIs and metrics, including Customer Acquisition Costs (CAC) and Customer Lifetime Value (CLV), to track the project’s success according to your initial projections

Select Your Technology Stack

The technology stack is a list of the programming languages, frameworks, and tools required to develop your app. If you need any assistance, turn to Inoxoft. Our developers will suggest how to develop a SaaS application and the stack suitable for your solution. Still, you should account for existing infrastructure, third-party services, and necessary integrations. 

Regardless of your SaaS solution type and purpose, you’ll need to choose:

• The backend stack supports the app’s server side. Popular backend technologies include Django, Node.js, and Ruby on Rails.
• The frontend stack covers the app’s user side, including the interface and navigation. Angular.js, Vue.js, and React.js are among the most common technologies for frontend development.
• Databases store all the data used in your SaaS solution. MySQL and PostgreSQL are currently the top database management solutions.
• Cloud hosting replaces on-premises infrastructure and helps scale your SaaS solution. Popular hosting platforms include Azure, Google Cloud Platform (GCP), and Amazon Web Services (AWS).
• The mobile development stack depends on the platform you choose. Flutter and React Native are best for cross-platform development, Kotlin is a go-to Android development choice, and Swift with Objective-C is suitable for iOS apps. 

“If you don’t have a technological background, the best advice is to find a technology partner. First, they have the experience to develop these solutions; second, they’ll handle everything for you. This means you won’t have to worry about assembling a team, choosing the right tech stack, or what factors to consider. You can focus solely on the business side,”

says Nazar Kvartalnyi.

Create an MVP

A minimum viable product (MVP) is a tried-and-true method of validating business ideas on a limited budget and timeframe. Developing a SaaS MVP covers frontend and backend development, mobile app development, third-party integrations, and more. 

At this stage, your technical team will use your discovery phase insights to develop UX/UI design and manage user flow throughout the app. Software engineers will also write code and set up the infrastructure required for performing core functions and delivering on your unique value proposition. 

Depending on the project’s complexity, toolset, and other requirements, SaaS MVP development takes from six to twelve months,

Test

Although agile development employs testing throughout every iteration, the final round of quality assurance is critical. It identifies any lingering bugs and glitches and eliminates them before you deploy the app. Thanks to thorough testing, you will avoid an influx of negative feedback and preserve your reputation, developing customer loyalty from day one.

Deploy

Your development team will handle deployment to ensure it goes smoothly. The process includes the web platform and server-side launch. Your website will become visible to search engines and appear in search results. 

After fulfilling all the necessary safety and marketing requirements, you’ll also need to add your apps to the App Store and Google Play. Although deployment is often the most nerve-racking moment of SaaS development, it’s just the beginning. Soon, the first clients will come in to assess your offer, purchase it, test your solution, and leave their feedback.

Choose a Pricing Model

How soon the app returns your investment and starts generating revenue depends on your chosen monetization model. It’s tough to make sense of a dozen options, so let’s focus on the most effective ones for B2B and B2C offers.

If your SaaS solution addresses end-user needs, you can opt for:

• Freemium or subscription-based pricing. Let users test the app for free before subscribing to monthly or annual plans. This option is the easiest to set up and the most transparent.
• Affiliate or ad-supported revenue. Users can enjoy your solution for free but incorporate advertisements to generate a return on investment.

If you plan to offer your SaaS solution to SMEs or large enterprises, consider these monetization options:

• Pay-per-user. Your customers will pay for each additional team member using your solution. It’s a common pricing model for collaborative tools like CRM or project management platforms.

• Tier or feature-based pricing. With this model, your customers pick the features or feature sets they will pay for. This approach often includes custom pricing plans for customized solutions.

• Pay as you go. Unlike subscriptions, this monetization approach generates revenue only when customers use your solution.

Develop Your Marketing Strategy

You can work on the marketing and sales strategies while the technical team develops the prototype (or even before they decide how to create software as a service for you). Although you should tailor your approach to the niche and audience, your strategy should include the following:

• Ways to increase reach: content marketing, SEO optimization, pay-per-click ads, social media, YouTube presence, and affiliate programs
• Transparent pricing: clear rates, a limited number of pricing tiers, comparison tables, etc.
• Easy onboarding: quick signup (via Google or Facebook), limited free trial or freemium plans
• Smooth customer experience: UX/UI design, reliable customer support, help center, FAQ, etc.
• Promotions: deals for new and regular customers, seasonal discounts, referral codes, etc.

Must-Have Features for Your SaaS Application

Important requirements regarding effective support of different payment systems, secure cloud hosting services, data analysis tools, and risk management, are the advantages you provide to the target audience. We have no idea how to build a SaaS application without these crucial elements:

Focus on security

Storing customers’ data in the cloud, and integrating with any third party brings potential security risks. You have to ensure that sensitive user data is encrypted against the threat of leakage and hack attacks. It includes multi-factor authentication, identity management, etc.

Authentication

An easy, but reliable authentication process gives an impression of a secure platform. The app can support access from numerous accounts with two-factor authentication. Or access activated via email, phone number, etc.

UI/UX

How to build a SaaS app without paying attention to UI/UX. It’s more convenient to make your application user-friendly and easy to use and appealing to the end user. Who needs complicated navigation or an old-school design in 2021?

Frequent updates

To keep up with competitors and remain successful in the market, updating your SaaS app regularly is a must.

User activity monitoring

Analyzing users’ logs allows for predicting changes, tracking changes, and preventing intrusion. It plays a huge role in data protection and dealing with integrity and access issues.

Find out what are the best SaaS development companies in the USA!

Should You Transit Your Application to SaaS? 

Aside from the technical challenges of how to design a SaaS product, transitioning your legacy application to a SaaS model is a significant investment. The initial SaaS development cost for SaaS migration ranges from $150,000 to $400,000, depending on the project’s complexity, duration, and team size. 

So, is the transition worth it? Making an informed decision is easier when you understand how your recurring expenses will change. 

Below, we offer rough estimates based on average industry wages from Glassdoor, electricity prices, and other factors. As you can see, owning an on-premises app is more expensive than owning a SaaS solution in the long run, even with an upfront migration cost of $150K+. 

Our Experience in Developing SaaS Applications I

Are you looking for a partner to take over the development process of your SaaS application or transition to this business model? Our team can help, guiding you through every stage of development, from idea validation to deployment.

We have several successful collaboration examples from various fields.

One example of our expertise in developing SaaS applications is a scalable HR consultancy platform for a Netherlands-based client. The client needed to design a cloud-based system to assess employee satisfaction rates and reduce churn. As a result, enterprises received a convenient cross-platform tool for scheduling HR surveys, analyzing employee satisfaction metrics, and receiving HR consultations and other services. Our client automated a critical business process while adding value to its customers. Besides, the company gained a chance to attract more corporate clients.

We also assisted another client with SaaS platform development for tracking waste production, recycling, and management for Australian building owners and managers. The platform addresses the new ‘Waste Rating’ approach under the National Australian Built Environment Rating System (NABERS). The SaaS platform Incorporates QR code tracking, automated weighing, and data input by building cleaners. With its help, building owners, managers, and businesses analyze their waste management programs and improve their efforts to lower their carbon footprint.

Final Thoughts

SaaS solutions dominate B2B and B2C markets, from communication and project management tools to eCommerce and ERP solutions. Considering their business benefits, numerous companies are willing to invest in SaaS. You can capitalize on this trend by developing a niche product to address specific business needs and generate value. Moreover, if you already have a legacy software product, you may decide to transition it to the SaaS model.

After over ten years of software and mobile development, Inoxoft has implemented multiple SaaS projects in Human Resources, Real Estate, IT, and other industries. We will gladly consult you on creating a SaaS business or transforming your legacy software into SaaS. Get in touch, and we’ll schedule a consultation.