SaaS Software Development: All The Key Steps to Success
It feels like it was just yesterday when software companies had to develop massive infrastructures and burn their products into floppy disks and CD-ROMs before sending them out to the market. Tech solutions and, indeed, software delivery have come a long way, baby.
Disk-based software is now (mercifully!) less common and is progressively being replaced by other, more efficient alternatives, most notably Software-as-a-Service (SaaS). Today, 70% of business software used by organizations is SaaS-based. And by 2025, that number will jump up to 85%.
SaaS leverages the emergence of cloud technology to deliver software solutions on demand rather than on-premise. This simply means that users get to cut out the stress of physical integration and installation of programs for a more pragmatic approach that only requires accessing a program from a web browser.
Moreover, upgrades and maintenance can be done much more easily since teams don’t need to travel to the location physically.
Sounds super convenient, right? So how do you build a SaaS product? This article will tell you everything you need to know about SaaS software development.
List of Content
- What is the main concept behind SaaS-based software?
- Pros of SaaS software development
- Cons of SaaS software development
- Differences between a SaaS application and a web application
- How SaaS software development can be applied
- How to prepare for SaaS software development
- The SaaS software development lifecycle
- What are the SaaS Software Development Monetization Models?
- How TurnKey can help you find awesome software developers for your SaaS software development
- Final Thoughts
What is the main concept behind SaaS-based software?
Software as a service is a software development model whereby software management, application, and engagement are enabled through cloud infrastructure. Here, software users access the program through the web as an internet-based service. This is in contrast to the traditional software delivery method that requires users to physically purchase the program and manually install it on their computer before being able to use it.
The SaaS model’s highlight, cloud operability, means that users are absolved from the difficulties of managing the software and other hardware requirements.
Before SaaS became mainstream, you had only one major way to use software: purchase the software from a vendor with a license key. This is popularly called on-premise software delivery. (And it sucked…)
But on top of the purchase and upload, running the software demands certain hardware requirements to function. Sometimes, you may need to hire engineers to maintain the software, and if a new version is released, get out your credit card. You’ll need to purchase the newer version and start the installation process over again.
These days there’s no longer a need to constantly buy software updates, hire engineers that routinely run maintenance checks, or buy heavy hardware to execute the program. All of these are done by the developers via a cloud system.
Perhaps its most helpful to explain SaaS using an example:
- The 2016 version of Microsoft Office, which is a software suite loaded on a CD, won’t function smoothly on an old laptop with, say, only two gigs of RAM. You’d have to buy a newer system with better specifications to run the program efficiently.
- But this isn’t the case when you use a SaaS alternative like Google Docs. You can still use Google Docs smoothly on an old laptop without any pressure to buy a new program version. Every update is automatically reflected whenever you access the program through a browser.
[To be fair, it is important to note that after 2019, Microsoft Office is now a SaaS program based on the Microsoft Azure cloud. So even mighty Microsoft became big believers too!]
Moreover, for most SaaS programs, rather than purchase a license key, users pay a fraction of that amount in subscription fees to have access.
For all the above reasons, SaaS has become incredibly popular, and most organizations are switching the bulk of their software purchases to SaaS-based products.
The numbers don’t lie: in a reported survey, 88% of the respondents said they are using SaaS for their business operations. A quarter of the respondents anticipate that their organizations will begin migrating all their applications to the cloud within the next year. And by 2025, 80% of businesses expect all their systems to be SaaS.
In the same vein, the global SaaS market has maintained an upward growth trend. Statista has predicted that the global SaaS market will surpass $208 billion by 2023 after recording consistent highs since 2015.
Pros of SaaS software development
In the tech world, everybody’s key objectives are efficiency, faster delivery, ease of use, and (when possible!) affordability. The good news is that SaaS helps solve these.
Check out some of the pros of SaaS software development.
#1. Greater scalability
Cloud systems are very flexible environments that enable easy adaptability, aiding scalability in SaaS products. Using APIs, cross-platform integrations are seamless, allowing for continuous improvements and additional functionality.
With this, SaaS software can easily and quickly adapt to match users’ increasing demands and evolving expectations.
For the users, scaling is also convenient and quick because they are typically required to do nothing, especially from a technical standpoint. In case of an upgrade, a user can simply switch to a higher plan that offers more functionality.
#2. Enhanced security
SaaS platforms use some of the most advanced encryption technology to guarantee security. Security standards can be multilayered, with database providers integrating security measures to safeguard client data. Vendors can also implement additional security measures for further assurance.
In most cases, the end-users can also initiate a security protocol like 2FA. The point is that SaaS-based software enables a much broader array of security options than on-premise software.
#3. Increased automation
SaaS applications are often embedded with machine learning and AI technologies that enable streamlined automation with very little human involvement. As a result, SaaS-based software can save the cost of hiring a large workforce.
#4. Better accessibility
On-the-go accessibility should be a top priority for every organization in the modern –in other words, remote! – corporate world; the recent Covid epidemic and its effects further underscore this truth. Accessibility is a prominent factor that has pushed the adoption of SaaS applications.
A SaaS system can be accessed from anywhere and by anyone with authority to do so. All they need is an internet-enabled device and a stable internet connection.
#5. Easy upgrades
Waiting for a year or more to buy a newer version of the software with improved features can impede business. With SaaS programs, updates are implemented as often as necessary, and the user may not even be aware.
You only need to log in and find a new feature that wasn’t present just an hour ago; no noise or annoying warnings for you to update or get disconnected.
#6. More efficient database
SaaS-based software is hosted on cloud databases, making operations much more efficient. Downtime issues are almost nonexistent on cloud systems, and software maintenance is much easier to do from anywhere.
#7. No special hardware requirements
Users don’t have to worry about system requirements, which could incur additional expenditures if the software requires high-end workstations.
The software is not installed directly on your device, so a decent computer with reliable internet access can run a SaaS program in most cases. This saves corporations truckloads of money that can be better spent on other, higher value areas, like lead generation.
#8. Cost efficient
The conventional licensing approach involves a one-time license charge that, in most cases, is out of reach for startups and small and medium-sized businesses.
The SaaS model, however, offers very practical and flexible subscription plans that don’t place any financial pressures on users.
Additionally, users can opt out at any time and discontinue payment when they no longer have a need for the program.
#9. Recurring and long-lasting revenue
The SaaS-based business model is very attractive for startups and high-growth companies as it creates a consistent flow of income via time-based subscriptions.
This is more beneficial than the on-premise model, which requires software developers to rely on the purchase of software or a one-time licensing charge to generate income. Then future fees are simply tied to lower maintenance contracts.
Cons of SaaS software development
Although software as a service (SaaS) has many advantages for companies and users alike, it’s important to remember that nothing in life is perfect; indeed, even the SaaS model has its drawbacks and challenges.
Let’s consider the possible disadvantages of SaaS to keep you prepared.
#1. Complex regulatory compliance
Companies often host their software on third-party servers, and compliance with data protection laws is challenging when your company’s sensitive information is kept in a provider’s data center.
It could be even more challenging if you have data from across different jurisdictions. Moreover, if you sell your product internationally, you will be expected to comply with all of the different regulations across countries.
Your organization will need to become familiar with the regulations that apply to your industry, communicate clearly with your service provider, and be proactive to forestall any regulatory breach.
#2. No internet, no service
Every once in a while –such as a catastrophic weather event – your internet connection may slow down or be highly unstable.
SaaS usually doesn’t work effectively when not online; thus should you suffer a deep degradation in your power supply; SaaS software will not work as advertised.
#3. Possible integration issues with internal systems
Integration issues mostly arise if you’re implementing a SaaS solution for the first time. For example, there could be difficulty with synchronizing the SaaS program with existing on-premise software or even other SaaS tools you use.
It is important that you are aware of this possible challenge and ensure that the developers run compatibility tests before deciding on the best SaaS software development approach.
Differences between a SaaS application and a web application
People often talk about SaaS and web applications as though they mean the same thing. Rookie mistake.
The misconception reflects the simple belief that every application that runs on the internet must be a web application.
Basically, a web application is a program or software that is delivered through a web browser and is hosted on a remote server.
A SaaS application may also be delivered through a web browser, but its operability is not limited to browsers—it can also include a mobile or laptop app.
So let’s find out the major differences between a web app and a SaaS app.
SaaS applications are hosted on cloud systems and are enabled through cloud computing.
Web applications are typically hosted on local servers.
Accessible via a web browser or program interface.
It can only be accessed through a web browser.
The backend is multitenant: This means that various users share the infrastructure, which enables easy and quick maintenance. This model also makes it highly affordable.
This backend is single tenant: Here, every client has a distinct database, and the infrastructure is unique to individual clients.
SaaS applications are highly scalable as you can quickly adapt to the growing needs of your users.
The infrastructure enabling web applications doesn’t support instant adaptation or scalability. You may need to upgrade your plan or change the service provider to scale. This could lead to some downtime and extra costs.
How SaaS software development can be applied
SaaS applications are becoming the norm in the tech world, and more diverse SaaS application types are continuously being developed to meet market demands.
In terms of business applications, SaaS can be used for any software development need, but it is not a perfect fit for everything. For instance, deploying SaaS for applications with minimal or one-time use cases may not make economic sense. This is because nobody will want to pay a recurring charge for an application they rarely use or need only once.
It’s important to note that the SaaS model can be used in B2B and B2C scenarios. Let’s examine a few different examples.
Applicability of SaaS in a B2B model
Here are some B2B business types that are highly suitable for SaaS development:
- Project management tools: Microsoft projects, Evernote, and Trello are all successful popular project management tools based on a SaaS applications development model. These cloud-based tools allow businesses to manage routine operations and other activities efficiently.
- Marketing software tools: Marketing tools are crucial for implementing business marketing plans, converting clients, and generating revenue. There are currently many SaaS-based marketing programs that are versatile and highly automated. Adobe's Marketo is a good example of a market leader in this space.
- CRM tools: The customer relationship management niche is one of the biggest adopters of the SaaS development model. Various top CRM tools, like Salesforce, Zoho, Freshworks, etc., are all SaaS-based. In fact, SaaS seems to be the unofficial standard for the industry.
- ERP systems: ERP (Enterprise Resource Planning) systems are robust cloud-based applications that include a wide range of features for enhancing and automating a company’s operations. The business operations managed by ERP are inventory, accounting, HR activities, compliance, procurement, project management, shipping, etc. Popular SaaS ERP tools include Oracle and SAP’s S/4HANA Cloud, etc.
Applicability of SaaS in a B2C model
SaaS is not only great for business operations, but it plays equally well with B2C programs and applications such as:
- E-learning tools: One of the greatest benefits of adopting SaaS development for e-learning is the ability to scale fast and easily as your audience increases. People can also have authorized access to the content at all times with zero-to-minimal downtime. Some examples of SaaS E-learning platforms include Canvas, iSpring learn, Docebo, Duolingo, and more.
- Streaming services: Many consumers use streaming services like Netflix, Vimeo, Twitch and Spotify every day, especially for listening to music or watching videos or playing video games. All of them are SaaS-based streaming applications. And none of them would be possible without the advent of cloud technology.
How to prepare for SaaS software development
Already thinking that SaaS is the way to go for your next software product? Here are the most important steps to consider before going into the development stage:
#1. Explore the market
The easy part is always the ideation stage, where you conjure up the concept and dream of its massive success. But hope and assumptions are never good strategies for any business.
You have to deeply analyze the market to evaluate the economic viability of your SaaS-based idea. You need to know if the SaaS development model is most relevant to the needs of your users.
#2. Learn your target audience
Every application has an audience profile (since you won’t have much success if you try to develop a tool for the entire world.)
Therefore, you should deliberately identify your target market—individuals more likely to utilize the software after it launches.
This is important as it helps shape your marketing strategy and gives you insight into how to develop the product according to users’ needs and demands.
#3. Identify the ideal user experience
It’s not enough to have a beautiful SaaS product. The question is, does your target audience find the product usable?
That’s what determines the acceptability and success of the product. First, identify the perfect user experience and then work backward from there to outline the features and functionality that will enable such ease of use.
#4. Hire a reliable SaaS dev team (or just call TurnKey!)
A bad release can destroy any great product idea, which is one reason why hiring bad developers can be devastating for any company. Indeed, according to one survey, hiring a bad team and tech problems are among the top 6 reasons startups fail.
The truth is, there are tons of acclaimed SaaS developers out there, but if you aren’t careful, you could end up hiring ones that just don’t fit your existing culture or understand your vision. So what do you do? Stick with renowned experts and hire the pros here at TurnKey.
Partnering with TurnKey guarantees collaboration with some of the best and most experienced SaaS developers worldwide. You get a custom-built team that is 100% committed to your roadmap and are fully integrated into your existing product organization.
The SaaS software development lifecycle
SaaS software development demands a different approach because its operational and management processes differ from building on-premise software. Let’s highlight the key parts:
#1. Idea creation
Because your SaaS product will need to rely on recurring subscription fees, you really have to create ideas that will compel a user to pay for this service every month. In other words, you have to craft a product that users see so much value in that they renew each month.
At this stage, you must be able to answer the following questions:
- How is the product going to work?
- Who is the target audience?
What services do you intend to offer, or what problems would the software solve?
Are there any competitors? If yes, what are they not doing right?
- What is the economic viability of the idea? Can we generate recurring revenue?
A clear and objective answer to each of the above questions will give you better direction on what you should do and how to do it.
#2. Requirements definition
You should clearly understand what you want to build at this stage. The next step is identifying the required resources to help make your product idea a reality.
This includes finding service providers, creating a realistic budget estimate for your SaaS development, outlining the key tech requirements, building out a team, making a product roadmap, and more.
Be sure to reach out to advisors and investors for expert advice so that you can craft the most realistic requirements documentation possible.
#4. Find and hire a software development team
The next step is to find and hire the most talented SaaS software developers to bring your idea to life.
Of course, there are various hiring models for development teams (we have discussed these models extensively in a previous post). Ultimately, the project size, budget, and software type will determine which hiring model is best for you.
However, we always recommend hiring an offshore development team. This is because it offers numerous benefits that are hard to beat with any other approach, including lower costs, access to a much wider pool of talent, faster speed to market, greater diversity of perspective, and much more.
Notwithstanding the hiring model you adopt, here is a quick checklist you should know before choosing a development team to collaborate with.
- Ask to see a portfolio of representative work.
- Probe their experience developing SaaS Software.
- Understand their key technical strengths (and weaknesses)
- Ask for references
- Organize a technical assessment to objectively
- evaluate their programming skills
Or you could just partner with a firm like TurnKey, and we’ll do all the heavy lifting so you can focus on what you do best: building great software.
The design stage is the start of the technical process. Here, the key objective is to get the user interface right because this will directly impact the success of the initial launch. The design should be user-friendly, easy to navigate, and flexible for mobile and desktop users.
You may consider developing an MVP or a wire-frame design to better understand what the final release will look like. The MVP should also be subject to controlled testing and user review to incorporate real feedback into the process.
This step is straightforward; the SaaS development team begins working to create a usable product.
Here, the front-end and back-end engineers collaborate to build software that meets the functional requirements but also has the ideal user experience that has been previously articulated.
You shouldn’t wait until the final release of your SaaS software before you begin the testing phase. Doing so creates costly delays and can significantly impair your overall product quality.
We always advise that testing should be a continuous process during development. QA engineers should form part of the development team and verify the coding efficiency every step of the way. Unit testing and integration testing are critical to ensure that all the components in the platform produce the desired results when assembled in the final release.
At this point, your SaaS software is ready for launch (congrats!). Here, the program will be deployed to a live setting -aka a production server – so users can enjoy the product.
#9. Maintenance and Iteration
The tech world is fast evolving, and great software today may become grossly inadequate in a few months or years. For example, once upon a time, 512 megabytes of RAM space seemed like the most a user would ever need. Today, 4 gigabytes is hardly enough.
So you must continue ideating and developing to add more functionality so that your product doesn’t become obsolete in a short amount of time.
What are the SaaS Software Development Monetization Models?
Choosing the right monetization model is critical since this will form the lifeblood of your revenue stream (and keep your company afloat!). Some of the most common models include:
- Free Services with Ads: Giving your product away for free and then monetizing through advertising is best if you want to quickly gain many users within a short timeframe. This model also allows you to test your product market fit and conduct a real-time market survey on what’s working (and what’s not). However, the big downside of this approach is that the advertisement may affect the user experience if not done in a tasteful or subtle manner.
- Freemium Model: The freemium model is a hybrid of free and paid. It allows users to access your software's basic features without charge, but it requires them to pay a fee to use the program's more advanced features. This model is best to hook people on your product with a free trial. The trick is then around conversion–how do you give users enough of a good product to get them to stick around but not enough that they don’t feel compelled to pay for the enhanced version? It’s a fine line.
- Subscription Plans: With this model, you make your software available only to users who pay a set amount on a time-based (daily, monthly, yearly, etc.) basis. This is arguably the most popular model for SaaS companies that sell to enterprise customers.
- One-Time Purchase: This is a software distribution strategy where a user purchases the software once and has access to all its features. It is sort of a digital version of the old way of buying disk-based software and is largely unpopular since most software needs to be upgraded somewhat regularly. Additionally, some customers may not be satisfied with this approach because they may be hesitant to purchase a product they have not yet tried. Giving customers a free trial period to evaluate the product before buying is a best practice in SaaS-based pricing.
How TurnKey can help you find awesome software developers for your SaaS software development
The success of a SaaS product comes down to a range of factors, but the most paramount is the strength of your developers—in the world of SaaS software development, you need the pros to weigh in.
But with the scarcity of strong development talent, hiring the right developers with the relevant experience can be arduous, especially for non-tech leaders. This is where TurnKey becomes your best friend.
With many years under our belt building expert SaaS development teams across various industries, TurnKey is best positioned to help you thrive in this cloud-based tech world.
Our unique hiring approach is centered around building amazing development teams that exactly fit the needs of our clients.
We call this Yourshoring because these are YOUR developers that are fully dedicated to YOUR roadmap and that work completely within YOUR culture to achieve YOUR product vision.
The Yourshoring concept is developed to relieve you from the stress of hiring and onboarding developers. It’s offshoring, but your way.
TurnKey’s model is very different from the typical offshoring model. With TurnKey, your development team is 100% under your control. We only step in to get you the right talent for your project. This ensures that you have a development team that is dedicated to your project and process, committed to its success, and integrated seamlessly with your in-house team.
How does TurnKey do this?
- We custom-recruit developers according to your project demands and business needs.
- We ensure the dev team is aligned with your vision and objectives.
- The dev team is under your supervision and answers to you, not TurnKey.
- The dev team is embedded in your company’s culture so that they are emotionally invested in your collective success.
- We are here to hold your hand every step of the way.
It’s hard for any tech observer these days to argue that SaaS software development is not the future. SaaS software models will likely dominate for decades to come, making it critical that any software business knows how to harness its power.
We’d love to help you on your journey.. Reach out here, and let’s partner on building a software development team that will take you to the finish line (and beyond!).
SaaS applications are a class of software that can be accessed online and are developed and maintained in the cloud. This is in contrast to the traditional software delivery method – often called “on premise” software – that requires users to physically purchase the program and manually install it on their computer or server before being able to use it.
SaaS applications are developed, built, and maintained on the cloud so that users can access them from any part of the world while connected to the internet. Developing software using cloud technologies also enables faster speed to market since developers can more easily share and collaborate on code in real time regardless of physical location.
There are many SaaS-based products that we use daily. Some examples include Netflix, Disney Plus, and Snap in the consumer (or B2C) world, and Trello, Slack, Zoom, and Dropbox in the enterprise (or B2B) world.