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How to build a SaaS application? Step-by-step guide

SaaS is an abbreviation for "software as a service," which describes software hosted in the cloud that consumers can access via a web app or website. Products such as Slack, Google Docs, Dropbox, Teamdeck and Shopify are just a few examples of software-as-a-service offerings hosted on the cloud.

Is the development of SaaS still destined only for the major players? Can new companies compete in this market? This SaaS application development tutorial provides a complete breakdown of the most critical points and explains how to build a SaaS applications and various solutions.

Sounds interesting? So let’s get started!

What exactly is a SaaS application?

A SaaS application is a web-based app that can replace traditional desktop applications. Your customers won't need to install it locally on their devices or upgrade the hardware required to run it because it is on-demand and based on a subscription model instead. This makes it very convenient for them.

Customers often use the SaaS applications from connected devices via an Internet browser or various application programming interfaces (APIs).

In contrast, the software provider is responsible for all maintenance. In most cases, the infrastructure of the cloud services is maintained by an independent cloud computing provider.

SaaS application development is hosted in the cloud and accessed through mobile apps or web browsers. The term "SaaS platform development" refers to developing cloud-based software and releasing it using a model in which the product is made available through a subscription plan and is hosted centrally.

Also read: Top 10 SaaS KPIs you need to know and track

Customers that use this kind of service don't need to install and configure the application independently because the software supplier takes care of all of that for them.

Users can access SaaS application from any device, anywhere globally, because it is hosted on the cloud and accessible via the internet. By the end of 2022, it is anticipated that more than 86 percent of mobile entrepreneurs will produce software as a service applications.

Let's have a look at a few more data on software as a service applications and the influence they have on businesses:

  • At a compound annual growth rate (CAGR) of 12.5% from 2019 to 2025, it is anticipated that the global market for SaaS will amount to $436.9 billion.
  • The total number of SaaS companies in the United States was about 15,000 in 2021.
  • In 2021, businesses worldwide adopted approximately 110 SaaS apps.
  • Salesforce has seen its market capitalization rise from $161 billion in January 2020 to $251 billion in September 2021.
  • Shopify has seen its value soar from $52.1 billion at the beginning of 2020 to over $185 billion now, representing a growth of 225% in just 20 months.

Key things you should consider for SaaS application development

When developing a software application for a SaaS platform, many considerations must be prioritized. We made a clean division between the two groups based on the amount of intricacy involved in each. A reliable SaaS application should operate faultlessly in all of the following areas:

Databases

It is vital to have a database that is relatively large, adaptable, and secure; in addition, the database must be of a certain kind that is tailored to the requirements of your company and the business type.

Which database you choose is determined by various aspects, such as the data type, scalability, expected load, the proportion of read actions to write actions, the programming language, and the available funds.

Scaling

Scalability incorporating scalability into your SaaS development process right from the beginning is essential. The software you are developing needs to be able to scale both horizontally and vertically. Your company should never have any trouble growing due to expanding the software.

Might be interesting: What is SaaS management? A definitive guide for beginners

Frequent updates

There is no such thing as flawless computer programing. Your customer's requirements and expectations will continue to advance, and so must your software if it is to remain relevant and valuable.

To be competitive, you really need to update your SaaS product depending on user feedback regularly.

Integrations from third parties

You can boost the marketability of your product and add value and features automatically by permitting integrations with software developed by other companies.

Therefore, make plans to incorporate such integrations into your product and ensure that its application programming interfaces (APIs) and documentation are simple. It is usually beneficial for software as a service application to host popular bots like Slack.

How to build a SaaS application?

Below are the following steps that explain how to design a SaaS application:

Market analysis

You've devised an idea for a SaaS application. Remarkable; however, you ought to investigate the factors that led to its formation. The first thing you should do is do some research on the customers, other businesses in the industry, and the size of the market.

The primary goals of this stage are to determine who the target users are, to comprehend the primary issue that the users are experiencing, to observe how the users are currently resolving the problem, and to offer suggestions regarding how the issue might be improved.

Worth checking: 12 SaaS benefits and features for business you must know

Testing the hypotheses

After completing the first stage, you now have some suggestions regarding how the solution for users might be improved. However, they are merely hypotheses at this point. To verify them, you will need to conduct a series of user interviews:

  • You should conduct a number interviews with your target audience.
  • You should know exactly what your users want and what they need.
  • You should investigate the obstacles that prevent them from accomplishing all of their goals.
  • You should develop a prototypes of your ideas and test it out with users.

Verification that users can make payments

When designing SaaS applications, one of the most critical steps is ensuring that consumers pay for the software. To investigate this, we suggest conducting interviews and tests and questioning the participants with pertinent and informative inquiries.

Choose the appropriate model for monetization

The monetization model of your SaaS service is another factor to consider concerning revenues. The model that is based on subscriptions is the standard option in this context.

A significant number of companies have benefited from utilizing this concept. However, the example demonstrates that the model based on subscriptions also carries some concerns.

First, when you choose a model based on subscriptions, you spend in the flow of customers right now to obtain the money one month at a time afterward.

Second, to make a profit and pay all your expenses, including product development, office rental, and administrative charges, you must ensure that your clients utilize your service frequently and ideally for an extended period.

Consequently, most of your investment will go toward acquiring and maintaining customers.

Also read: 16 SaaS pricing models and strategies – the ultimate guide

Define the tech stack

When we refer to "technology stack," we refer to the collection of technologies that will be utilized to create your software. This will comprise the configuration of the front end (frameworks and libraries), the back end (frameworks and libraries), the databases, the servers, and the infrastructure.

Before deciding whether to use a mobile or web technology stack, it is essential to consider your SaaS platform's scalability, as well as the possible earnings and beginning expenses.

MVP development

At long last, we are prepared to start work on the first iteration of the SaaS product, often known as the Minimum Viable Product (MVP). This is a fundamental model of your application that was produced within the shortest possible timeframe and with the least amount of effort.

Essential features of your app are highlighted in a minimum viable product, revealing the driving concept behind the project. The following are some possible uses for an MVP:

Early adopters will be used to test the product's premise, and investors will be presented with the product's initial version.

Some of our customers might be taken aback by the fact that we produce a stripped-down version of the product rather than a fully-fledged application for them.

However, it is indispensable for new businesses to begin by validating the functionality of the product's most fundamental components before moving on to the subsequent stages of product development.

You may also like: What is a Minimum Viable Product (MVP)? Definition and examples!

Testing and iterating your design

After it has been developed, your minimum viable product needs to be tested with early adopters. During the testing process, two items are checked: if your idea can be implemented in a way that is satisfactory to users; if your vision can be implemented in a way that is satisfactory to users.

At this point in the process, it is necessary to devote time to communicating with users. The more feedback you receive from users of your SaaS application, the more insights you will obtain about improving the product. The subsequent iteration of the program will take advantage of every one of these insights.

Perform maintenance and development

After the product has been introduced to the market, a new chapter will begin. The following are included in the product maintenance:

  • Seeking prospects for advancement; locating opportunities that are one of a kind.
  • Seeking out new clients and increasing the size of your TA.
  • Finding and repairing all errors in software.

Conclusion and final words

From our experience, we have seen how different the process of SaaS application development is compared to traditional, on-premise software. A lot of things have to come together for this to work correctly:

  • Developers with extensive experience in the field
  • On-going user research and product improvement
  • Robust customer support and communication channels
  • Aggressive marketing and public relations initiatives

While not easy, SaaS application development can provide reliable income and allow your organization to expand, making it a desirable field.

Get in touch with us if you want to build a successful SaaS application business, so we can talk about making your dream a reality.

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Hanna Dawidko-Chudziak
Hanna Dawidko-Chudziak
Head of Marketing
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How to build a SaaS application? Step-by-step guide

December 5, 2022
10
minutes read
audio description available
TL;DR

Software as a Service (SaaS) is still a relatively new approach that is replacing traditional software license purchases. Why is it getting more and more popular among both SaaS providers and users? How is such software created and maintained? Let's dive into the SaaS application development process together!

0:00
0:00
How to build a SaaS application? Step-by-step guide
How to build a SaaS application? Step-by-step guide

SaaS is an abbreviation for "software as a service," which describes software hosted in the cloud that consumers can access via a web app or website. Products such as Slack, Google Docs, Dropbox, Teamdeck and Shopify are just a few examples of software-as-a-service offerings hosted on the cloud.

Is the development of SaaS still destined only for the major players? Can new companies compete in this market? This SaaS application development tutorial provides a complete breakdown of the most critical points and explains how to build a SaaS applications and various solutions.

Sounds interesting? So let’s get started!

What exactly is a SaaS application?

A SaaS application is a web-based app that can replace traditional desktop applications. Your customers won't need to install it locally on their devices or upgrade the hardware required to run it because it is on-demand and based on a subscription model instead. This makes it very convenient for them.

Customers often use the SaaS applications from connected devices via an Internet browser or various application programming interfaces (APIs).

In contrast, the software provider is responsible for all maintenance. In most cases, the infrastructure of the cloud services is maintained by an independent cloud computing provider.

SaaS application development is hosted in the cloud and accessed through mobile apps or web browsers. The term "SaaS platform development" refers to developing cloud-based software and releasing it using a model in which the product is made available through a subscription plan and is hosted centrally.

Also read: Top 10 SaaS KPIs you need to know and track

Customers that use this kind of service don't need to install and configure the application independently because the software supplier takes care of all of that for them.

Users can access SaaS application from any device, anywhere globally, because it is hosted on the cloud and accessible via the internet. By the end of 2022, it is anticipated that more than 86 percent of mobile entrepreneurs will produce software as a service applications.

Let's have a look at a few more data on software as a service applications and the influence they have on businesses:

  • At a compound annual growth rate (CAGR) of 12.5% from 2019 to 2025, it is anticipated that the global market for SaaS will amount to $436.9 billion.
  • The total number of SaaS companies in the United States was about 15,000 in 2021.
  • In 2021, businesses worldwide adopted approximately 110 SaaS apps.
  • Salesforce has seen its market capitalization rise from $161 billion in January 2020 to $251 billion in September 2021.
  • Shopify has seen its value soar from $52.1 billion at the beginning of 2020 to over $185 billion now, representing a growth of 225% in just 20 months.

Key things you should consider for SaaS application development

When developing a software application for a SaaS platform, many considerations must be prioritized. We made a clean division between the two groups based on the amount of intricacy involved in each. A reliable SaaS application should operate faultlessly in all of the following areas:

Databases

It is vital to have a database that is relatively large, adaptable, and secure; in addition, the database must be of a certain kind that is tailored to the requirements of your company and the business type.

Which database you choose is determined by various aspects, such as the data type, scalability, expected load, the proportion of read actions to write actions, the programming language, and the available funds.

Scaling

Scalability incorporating scalability into your SaaS development process right from the beginning is essential. The software you are developing needs to be able to scale both horizontally and vertically. Your company should never have any trouble growing due to expanding the software.

Might be interesting: What is SaaS management? A definitive guide for beginners

Frequent updates

There is no such thing as flawless computer programing. Your customer's requirements and expectations will continue to advance, and so must your software if it is to remain relevant and valuable.

To be competitive, you really need to update your SaaS product depending on user feedback regularly.

Integrations from third parties

You can boost the marketability of your product and add value and features automatically by permitting integrations with software developed by other companies.

Therefore, make plans to incorporate such integrations into your product and ensure that its application programming interfaces (APIs) and documentation are simple. It is usually beneficial for software as a service application to host popular bots like Slack.

How to build a SaaS application?

Below are the following steps that explain how to design a SaaS application:

Market analysis

You've devised an idea for a SaaS application. Remarkable; however, you ought to investigate the factors that led to its formation. The first thing you should do is do some research on the customers, other businesses in the industry, and the size of the market.

The primary goals of this stage are to determine who the target users are, to comprehend the primary issue that the users are experiencing, to observe how the users are currently resolving the problem, and to offer suggestions regarding how the issue might be improved.

Worth checking: 12 SaaS benefits and features for business you must know

Testing the hypotheses

After completing the first stage, you now have some suggestions regarding how the solution for users might be improved. However, they are merely hypotheses at this point. To verify them, you will need to conduct a series of user interviews:

  • You should conduct a number interviews with your target audience.
  • You should know exactly what your users want and what they need.
  • You should investigate the obstacles that prevent them from accomplishing all of their goals.
  • You should develop a prototypes of your ideas and test it out with users.

Verification that users can make payments

When designing SaaS applications, one of the most critical steps is ensuring that consumers pay for the software. To investigate this, we suggest conducting interviews and tests and questioning the participants with pertinent and informative inquiries.

Choose the appropriate model for monetization

The monetization model of your SaaS service is another factor to consider concerning revenues. The model that is based on subscriptions is the standard option in this context.

A significant number of companies have benefited from utilizing this concept. However, the example demonstrates that the model based on subscriptions also carries some concerns.

First, when you choose a model based on subscriptions, you spend in the flow of customers right now to obtain the money one month at a time afterward.

Second, to make a profit and pay all your expenses, including product development, office rental, and administrative charges, you must ensure that your clients utilize your service frequently and ideally for an extended period.

Consequently, most of your investment will go toward acquiring and maintaining customers.

Also read: 16 SaaS pricing models and strategies – the ultimate guide

Define the tech stack

When we refer to "technology stack," we refer to the collection of technologies that will be utilized to create your software. This will comprise the configuration of the front end (frameworks and libraries), the back end (frameworks and libraries), the databases, the servers, and the infrastructure.

Before deciding whether to use a mobile or web technology stack, it is essential to consider your SaaS platform's scalability, as well as the possible earnings and beginning expenses.

MVP development

At long last, we are prepared to start work on the first iteration of the SaaS product, often known as the Minimum Viable Product (MVP). This is a fundamental model of your application that was produced within the shortest possible timeframe and with the least amount of effort.

Essential features of your app are highlighted in a minimum viable product, revealing the driving concept behind the project. The following are some possible uses for an MVP:

Early adopters will be used to test the product's premise, and investors will be presented with the product's initial version.

Some of our customers might be taken aback by the fact that we produce a stripped-down version of the product rather than a fully-fledged application for them.

However, it is indispensable for new businesses to begin by validating the functionality of the product's most fundamental components before moving on to the subsequent stages of product development.

You may also like: What is a Minimum Viable Product (MVP)? Definition and examples!

Testing and iterating your design

After it has been developed, your minimum viable product needs to be tested with early adopters. During the testing process, two items are checked: if your idea can be implemented in a way that is satisfactory to users; if your vision can be implemented in a way that is satisfactory to users.

At this point in the process, it is necessary to devote time to communicating with users. The more feedback you receive from users of your SaaS application, the more insights you will obtain about improving the product. The subsequent iteration of the program will take advantage of every one of these insights.

Perform maintenance and development

After the product has been introduced to the market, a new chapter will begin. The following are included in the product maintenance:

  • Seeking prospects for advancement; locating opportunities that are one of a kind.
  • Seeking out new clients and increasing the size of your TA.
  • Finding and repairing all errors in software.

Conclusion and final words

From our experience, we have seen how different the process of SaaS application development is compared to traditional, on-premise software. A lot of things have to come together for this to work correctly:

  • Developers with extensive experience in the field
  • On-going user research and product improvement
  • Robust customer support and communication channels
  • Aggressive marketing and public relations initiatives

While not easy, SaaS application development can provide reliable income and allow your organization to expand, making it a desirable field.

Get in touch with us if you want to build a successful SaaS application business, so we can talk about making your dream a reality.
Hanna Dawidko-Chudziak
Hanna Dawidko-Chudziak
Head of Marketing
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