Binerals

Tech & Trends06 Dec 2021
15 min read

SaaS App Development: How to Create SaaS Application

Given the SaaS application market growing by 18% each year, creating a SaaS solution can be both a trending and winning business idea. What’s more, building SaaS applications isn’t more challenging than creating usual web or mobile ones. While SaaS development has its technical issues, they are pretty solvable, so in this guide we will take a look at the ways to create a powerful SaaS solution with market-disruptive potential.

SaaS Applications Specifics and Architecture

As you know, SaaS as a concept stands for Software as a Service. This is a modern response to the old-school software issued on CD disks and required a costly and long-term licence purchase. The applications developed according to the Software as a Service model are more flexible and cost-effective since they allow the users to pay for the features they actually need and use the app for as long as they need. For example, such apps as Grammarly, Slack, and Evernote are the classical examples of SaaS solutions. 

For SaaS application developers, such an approach can promise a constant stream of income, plus the opportunity to better tailor their software to the users’ needs. What’s more, SaaS solutions often come with better scalability, security, and the possibility to launch updates without the need for software reinstalling and interrupting its operations. 

Still, SaaS apps are pretty specific from a technical point of view. There are two approaches to SaaS solutions architecture.

  • Single-tenant. A single-tenant architecture of a SaaS app means that each user uses their own server or database. This model is suitable for enterprise-level SaaS apps when the users may face the need to consume more and more app resources. 
  • Multi-tenant. Multi-tenant architecture, in turn, allows for sharing of one database between the users. In this case, the users may access either the same database from the one application instance or several separated databases from the one app’s instance. 

Here is how it looks.

While everything is pretty clear with a single-tenant architecture, you may face a more difficult choice when choosing between multi-tenant architecture options. Creating a SaaS app with a shared application and shared database is easier from the technical perspective, however, such an app will come with limited scaling options. So, this approach may be suitable for very specific use cases. 

A SaaS solution with a shared app and shared databases is more flexible and can be scaled unlimitedly in the future. For example, such an approach can be effective when creating software for a large user group  – for instance, developing an online dating website as SaaS.

How to Build a SaaS App from Scratch

Fortunately, the way to develop a SaaS application generally follows the way of building the solutions of any other type. The only specific you face is the choice of the right architecture, taking your scalability expectations into account, and suggesting the right monetization strategy. So, here is how to build a SaaS app step by step.

1. Decide on a niche and suggest an idea

Deciding on a niche and coming up with a winning idea is easier said than done. Let’s review some of the popular SaaS solutions from different industries to get an initial idea of how they solve users’ problems. 

  • Sales and marketing – HubSpot and SalesForce

These are two pretty popular solutions providing business users with the platforms to manage their sales and marketing. While SalesForce is more complicated and comes with a lot of advanced features set and personalized packages, HubSpot is more focused on the users with no digital marketing expertise, offering a simplified yet effective environment for marketing strategies development, run, and analysis. 

  • Content and media – Grammarly and Canva

Both Grammarly and Canva are available for free while their premium features are already paid for. For example, to unlock smarter Grammarly suggestions and use custom design templates in Canva, the users have to pay for the subscription which is pretty affordable. These are examples of apps targeted at a large user group. 

  • Health and fitness – Yazio

Yazio is a calorie tracker that follows a Freemium business model. The basic feature set is free but honestly, it is pretty limited. That’s why the app focuses on personalization – to unlock the personalized nutrition and fitness plan that will be developed according to the user’s goals, they need to have a paid subscription. 

  • Fintech – You Need a Budget

This budgeting app comes with a free trial – a pretty popular practice in SaaS applications marketing. As the name of the app suggests, it helps users better manage their finances. This solution can also be an example of how SaaS software can be integrated with other technologies – the application requires you to connect your bank card to track the expenses. 

  • Dating – Bumble

We have already dwelled on the ways dating apps make money and the tactics to build an online dating website. Now, let’s look at Bumble as a SaaS app example. While you can use most of the features for free, those ones that can make online dating actually effective are chargeable. 

2. Research and validate

So, there are a lot of industries for building SaaS applications. And the possible ideas list can also go on and on. Still, before getting started with the development process, you have to carefully research and validate your idea, following the best LEAN development practices. Here is how.

  • Get started with researching your competitors. Pay attention to not only the features their solution lacks but also to the features that are great. Analyzing the competitive solutions from all angles will allow you to come up with a holistic picture, better evaluate the strengths and weaknesses of the competitors, and suggest something more winning.
  • Use economical research methodologies. After you are done with competitors’ research, take a look at the target market as a whole. Use SWOT and PEST methodologies to analyze the market situation and find a place for your solution within it. Get started with PEST, which allows you to analyze political, economical, social, and technological features of the target market. Then, proceed with SWOT (Strength, Weaknesses, Opportunities, Threats) to better tailor your future solution to the market specifics, soberly assess the risks and get an idea of the resources you have to compete.
  • Get in touch with a focus group. While an early mistake means a cheap mistake, asking for the opinion of your future users in advance always makes sense. So, proceed with gathering first-hand information via focus group surveys, asking them about the solution they would like to use, the possible challenges they have with already used ones, the features they lack, the subscription fee amount they are comfortable paying, and so on.

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3. Build the core features for MVP

After you are powered with the insights gathered on the previous stage, you are welcome to get in touch with a SaaS app development company to build a Minimum Viable Product. The tactic to build a SaaS solution in this case doesn’t differ from the way to develop any other app. Your MVP should come with one-to-several core features and be able to actually solve the users’ problem. As a rule, SaaS MVPs are launched with such a feature set that in the future will still be free, if the project is going to follow the Freemium business model. But if you are going to provide a free trial, making all the features paid, you have to decide on the core ones to deliver as a part of MVP and test them with real users. 

So, the SaaS app’s backend should be technically powerful, scalable, and have no security loopholes. As for the frontend, think about the UI/UX design carefully. Find the ways to intelligently combine both free and paid features into a holistic UI by creating several prototypes for different user groups. You can do it via user stories mapping, using Miro for better visualization. 

Below are the suggested technologies to build a SaaS web app MVP.

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4. Validate your MVP

After your MVP is ready, you have to test and validate it with real users. Pay attention to not only the ways they use the app but do your best to unlock more far-reaching insights. Ask the users not only about their impressions of an MVP but also about the features they would like to have as a part of a full-fledged solution. The user-generated insights at this stage will be pretty helpful in the process of further development and scaling.

5. Choose the right monetization strategy

Perhaps, you already have an idea of how your future SaaS solution will make money. Below are the three main monetization strategies to choose from. 

  • Subscription. In this case, the users have to subscribe to use the full set of the app’s features. As a rule, the solutions that come with a subscription as an only option provide the same set of features to all users, giving the opportunity to choose the package with more personalized options. Also, be ready to offer a free trial to let the users make sure they aren’t buying a pig in a poke. 
  • Freemium. This business model implies allowing users to enjoy a basic set of features for free. More advanced functions are usually classified and categorized according to the use case and the user’s necessities and come for a fee. 
  • Pay as you go. This option is suitable for the solutions created for enterprise-level users. The essence of the business model is pretty simple – the more resources the users consume, the more they have to pay but they still pay for the actually used services only. For example, pay as you go is one of the tiers you may choose when getting started with Amazon AWS, which, by the way, is one of the most popular SaaS solutions examples. 
  • Advertising. As a rule, such a tactic is mixed with the opportunity to buy a subscription. The users who purchased it can use the app without advertising, choosing the package they need. Other users access the app for free but the ads are impossible to skip. To use this strategy with even more benefits, don’t show the advertising too frequently and try to match it with the possible interests of the users. 
  • Application cloning. As the name of this monetization tactic suggests, cloning a SaaS app means creating a solution significantly similar to the one that already exists but with a strong competitive feature. The goal of this strategy is to sell the clone app to the company that owns the original software. Despite this being a one-time deal, it allows for paying off the development costs and earning extra so some seasoned developers consider application cloning a winning idea.

6. Hire SaaS app developers to build a full-fledged solution

At this stage, you are as close to creating a full-fledged SaaS app as possible. That’s why it makes sense to consider SaaS application development services. With strong tech support, you will be better able to build a powerful, scalable, and secure solution, which will be easier to test, maintain and grow.

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SaaS Application Development Challenges

While the development path is almost the same for SaaS and most other solutions, there are still some specific challenges you have to keep in mind when creating Software as a Service. Below are the core characteristics an effective SaaS application should have, and the development challenges you may face are driven by them. Let’s review the possible pitfalls in more detail.

Choosing the technologies

Some SaaS startup initiators consider running their app on-premise and then migrate it to the cloud. In this case, you are likely to face application migration challenges, which in turn, increase the development cost and postpone the application launch. So, it is better to decide on the cloud server from the very beginning (Amazon AWS is one of the best options) so that you can create and deploy the app already from the cloud.

Security

The issue of security is relevant for all the apps that require users to share their personal and financial data. To create a secured SaaS solution, choose the right technologies for the backend, and run multiple test scenarios to find and eliminate all the possible bugs.

Reliability

To put it simply, the SaaS app should be able to withstand the planned loads. In addition, it should be scalable in response to the growing users’ needs. That’s why you have to choose a secured cloud server provider and have several scaling strategies in mind, aligned with the resources you actually have to implement them.

Integrations

SaaS applications usually come with multiple integrations. For example, business users should be able to integrate your solutions with the ones they are already using – for example, Jira or SalesForce. Private users may need social media integrations, so create a list of the integrations the users may need in advance, and make sure the solutions can seamlessly and safely exchange their data.

How Much Does It Cost to Create a SaaS Application

As always, the cost to create Software as a Service is individual and depends on the solution specifics. Below is the approximate cost breakdown to build a SaaS product (MVP).

Making more or less accurate estimates is almost impossible without understanding the idea behind the app, making careful market research and business analysis, suggesting the right technologies, and shortlisting the necessary features for an MVP.

Still, the cost of SaaS app developers for hire may give you an initial idea of the final price to build this solution. For example, if the hourly rate of the US SaaS developers is $100-150, the cost to hire SaaS programmers with the same expertise in Ukraine is $50 per hour. As a rule, SaaS solutions are built by dedicated teams since this software usually has a long lifecycle, it needs ongoing scaling, support, and maintenance. To optimize the cost to build, grow and support a SaaS solution, consider hiring a dedicated development team from Ukraine – we are right here to source it for your project.

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    Conclusion

    Creating a SaaS solution is a winning idea in 2021 and beyond. But make sure to carefully research the market – being hot business ideas, the number of SaaS projects is growing. That’s why the competition is growing as well, so developing a SaaS product following the latest and the best tech practices becomes essential.

    Binerals is right here to share our experience and expertise in SaaS development.

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