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How to develop SaaS Application?


Software as a Service (SaaS) is a new approach that is replacing traditional software license purchase. That is why the SaaS delivery model has gained a lot of popularity in the last decade.

According to research conducted by The Insight Partners, “the SaaS market accounted for US$31.57 billion in 2015 and is estimated to expand at a CAGR of 18.6% between 2016 to 2025, accounting for US$ 172.20 billion in 2025.

Its popularity is expanding rapidly due to the number of benefits it offers.

If your organization is coming up with an idea of developing the software, the SaaS application development can be the best option for your business.

In this guide, we will discuss what is a SaaS application, why should you develop SaaS application, how to build it successfully and how to migrate your existing app to a SaaS model.

Contents of the Article

What is a SaaS application?

A software that is licensed with the Software as a Service business model is termed as SaaS application. These apps are an excellent option for small to medium businesses because it proves to be more cost-efficient than using traditional in-house software.

SaaS apps eliminate the financial risks of costly software as it takes significant time, human and budget resources. However, it embraces various spheres and includes different business apps, for example, payroll, office, HRM, CRM and resource planning software.

Services of Software-as-a-service applications are hosted in the cloud, therefore, they don’t need to be installed on the computer physically. To use SaaS applications, users don’t have to install anything on their devices. Updates and maintenance are executed by the host side and seem invisible to the user. The SaaS product is not sold with a lifetime license, instead, it is distributed to users using a subscription model.

Anyone can develop SaaS applications with a small budget and using cloud-based technologies and storage. Let’s discuss the advantages of developing SaaS applications.

Why should you develop SaaS application for your business?

Here are some of the reasons why you should consider a SaaS business model for your business apps.

  • Scalability and Flexibility
    If you want to be successful, you need to be flexible. If you are a business owner, you can adjust to changes in your business. SaaS applications allow you to select the delivery model and modify it as requirements change. It is easier to get new users, integrate with other apps and turn on an additional set of components.You can experiment in a less risky environment by trying on a new project, user base or acquisition. As your SaaS development provider manages the backend with the cloud, you don’t need to be concerned about the infrastructure.

    With flexible subscription-based licensing, SaaS apps can scale easily and scaling is required to manage massive amounts of data from multiple sources.

  • Speed factor and ease of use

    Deployment and selection of a business application has never been easy. Cloud applications can deploy faster, thereby bringing down the administration and installation efforts. The ability to build and deploy quickly will allow you to stay on a competitive edge and pace up the business benefits.

    SaaS business model generates value to its users faster and provides companies the flexibility that is required to bring in change when they need it.

  • Reduced Application Costs

    Reducing the cost of business apps can benefit everyone, from the Chief Experience Officer to individual business units, including the IT staff. Provided the lower maintenance and infrastructure costs, SaaS business apps can reduce the percentage of your business unit’s budget that is dedicated to IT spending. It means you can invest in other competencies while using secure and scalable business applications.

    The subscription-based model not only provides great flexibility in terms of the licensing but feature-rich SaaS applications are also easy to use and are developed tailored to the business needs and requirements.

    If you want to extend the capabilities of your SaaS application, your development partner can easily add them with the help of development tools and technologies. It helps in saving time and costs and bringing down the investment risk. The additional features will have automatic upgrades, meaning that these apps will continue to run smoothly when the app or underlying platform is upgraded.

  • Time Management and Performance
    Time to deploy a cloud solution is comparatively less as compared to on-premise systems. You can deploy a cloud-based system across various regions, avoiding the total cost associated with those rollouts.You don’t need special hardware to run SaaS applications that means you will not be wasting time in setting up and procuring IT infrastructure and VPN access across multiple sites.

    Unlike on-premise setups where the performance is significantly dependent on the in-house servers, cloud-based applications are developed so that the network performance is adaptive and meets the business and users’ requirements.

    As and when your business grows, you will outgrow the server’s capacity and will have to buy and install hardware and even hire many IT employees to handle the server.

    With SaaS, service providers take all the burden of availability, performance and security, which implies that these systems are a secure and seamless option that any business willing to grow should consider as an essential improvement.

How to develop SaaS Applications?

SaaS application development is different from the conventional approach to software development in many ways. SaaS app development journey should be well organized as it can prove to be a deciding factor in your company’s growth.

Firstly, you need to understand the idea of your project, know who your target audience is and why would they use your product. You should research similar products on the market and understand how to make money with your app.

When you think about SaaS application development, you will get plenty of both paid and free tools available in the market.

You may easily get confused about which technology stack to pick for your project. Let’s have a look at some of the tips that can help you choose the right stack.

  1. Project Scope: Some technology stacks are more relevant for startups and some
    for enterprises. Choose something that will hold your future growth.
  2. The Expertise of Your Technology Team: Your technology team needs to be comfortable using the technology, as you will be running on a deadline. Ensure that some technologies have steeper learning curves than others.
  3. Maintainability: You will require a team of developers to update the code as production moves on.
  4. Time-to-market: If the project requires a lot of testing and development, there are chances that you will not be able to launch the product on time.
  5. Budget: Do the estimation of how much you can spend to develop SaaS applications. You might need to purchase licenses or subscriptions for some tools, whereas some of them are open source and free to use.

Here’s a complete step-by-step guide on how can you develop SaaS applications successfully

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Step1: Ideation

The first step to developing a SaaS application is to either have an idea or explore challenges and then come up with a technological solution to resolve it.

To develop SaaS application, you first need to understand all of its functions. In fact, you must see how it will work, seem and be used by customers. You should determine the unique feature that will help your app stand out and have an ideal reason for using the SaaS model.

Then, you need to identify who will be using your SaaS app. It’s essential to answer this question because your proposition directly relies on your buyer persona. The app can be used by different age groups and each individual may have different requirements.

Once you have identified your target audience, you must know what they want and research SaaS application development trends.

Step2: Research SaaS application trends

Tracking research trends is essential to achieve success. Understanding trends can help you enhance your app and keep it significant.

Following are some of the top SaaS trends that you should watch out for in 2020:

  1. Artificial Intelligence 

    Artificial Intelligence is one of the most potential trends in SaaS because of its self-learning and autonomous behavior. AI technology optimizes business processes, boosts productivity and automates repetitive tasks to support human capabilities. In business scenarios, artificial intelligence offers a high-level degree of interaction and responsiveness between technology, customers and businesses. It has driven AI-based SaaS trends onto a new level.

    Assistants, including Cortana, Siri and Alexa are the best examples of the SaaS model and depend on speech recognition and technologies. AI can disrupt the SaaS landscape in a number of ways, enhancing the key characteristics of the SaaS model. When SaaS is combined with AI skills, it allows businesses to achieve better value from their data, personalize and automate services, supplement human capacity and enhance security.

    Machine Learning can be used in SaaS to automate responsiveness in customer service applications and reports, such as AI-enabled chat operations with live chatbots. It can also be used to automate the SaaS’s onboarding process.

    The software can be easily used with technologies like Natural Language Processing to process human speech patterns automatically. It can be implemented across customer service functionality to address client requirements and enhance customization.

    AI-enabled SaaS paces up internal operations and processes, facilitating businesses to get answers to questions rapidly, make quick predictions and speed up the overall responsiveness level.

    With AI-based automation and the ability of ML to identify patterns, SaaS security is improved by the quick identification. AI-optimized SaaS applications present an opportunity for businesses to augment their internal processes with automation, enhance the level of responsiveness throughput and personalization and address customer service processes efficiently.

  2. The growing need for API connections 

    API has always been a significant part of software development for the last many years. With the introduction of SaaS solutions and adoption by the market, the need to integrate them into the current business ecosystem emerged. Some organizations may want to move all their data to the cloud platform. However, many companies would instead combine it with existing infrastructure to improve it. Earlier, SaaS providers had no complete integration solution.

    They used to redirect their clients to a third party for integrating the cloud solution into their existing system. It was good for the SaaS developers not to reinvent the wheel by relying on third-party APIs.

    However, more and more SaaS vendors tend to offer greater integration skills instead of redirecting clients to third-parties. Therefore, if you want to invest in a cloud vendor’s services, you should ask the below questions to ensure a seamless integration:

    1. Is my data secure during the integration process?
    2. What capabilities is the provider providing me to integrate SaaS into my current business ecosystem?
    3. Can the provider also integrate my existing legacy system?
  3. Vertical SaaS 

    Vertical SaaS is another essential SaaS trends to watch out for in 2020. Vertical SaaS is defined as a type of Software-as-a-service cloud computing solution created for a specific industry, for example, insurance, retail or auto manufacturing.

    Companies with a specific specialization are finding Vertical SaaS to be a cost-effective and industry-specific option that allows them to improve the customization of certain features. It results in more upselling opportunities and lower customer acquisition costs.

    Vertical SaaS offers the following benefits to businesses:

    1. Pre-defined metrics and KPIs
      Vertical SaaS is integrated with KPIs, pre-defined metrics and analytics that businesses can use to address and evaluate long-term and daily performance and processes.
    2. Enhanced Data Governance
      Vertical SaaS can address data governance processes via the inclusion of industry-specific compliance capabilities to provide the additional benefit of improved transparency.
    3. Customer Intelligence
      Vertical SaaS allows businesses to obtain industry-specific customer intelligence and data that plays a significant role in getting customer-focused insights.
    4. Migration to PaaS
      As the SaaS industry grows and innovation increases, many providers start focusing on customer retention on top of customer acquisition. In 2020, it is expected that SaaS may migrate towards the areas of PaaS – developments that enable businesses to develop custom apps as add-ons to their original services.

    Step3: Document your requirements

    Once you have done enough ideation and researched the market trends for your SaaS application, you need to document requirements to build an MVP. It contains the core essentials of your app that are needed to function at the most basic level.

    Writing documentation is not an easier task, you need to have a thorough understanding of what your project requires. Write the functional specification in the document or build a series of user stories. Irrespective of what approach you take, something that is common across each of the different approaches is that they entail the system requirements for each piece of functionality in the system you want to develop.

    Lack of organized requirements documentation can affect the delivery of your MVP. Therefore, take your time to ensure that the requirements to build MVP are precise and clear. If you are a non-technical person, it is better to hire a business analyst/ consultant who can help you convert your idea into technical requirements that a developer can understand.

    Step4: MVP (Minimum Viable Product)

    Another important step after documenting requirements is to build a minimum viable product. It comprises the core features required to perform at the basic level. An MVP allows you to understand if your proposed product can solve the problem for which it was created. If it gets successful in solving these tasks efficiently, it is worth to move it into development. Therefore, you can develop SaaS applications that can solve challenges better than competitors.

    When you create an MVP for your SaaS product or application, you can pick different tools/technology stack and test several approaches specifically to the selected approach.

    When selecting a technology stack to develop your SaaS MVP or product, you will need to consider various factors that may include, but are not restricted to the following:

    • How mature is the technology or programming language?
    • Does the technology support features you require?
    • Can technology be easily integrated with other products?
    • How large is the developer resource pool?
    • Is the technology suitable for my MVP?
    • What is the roadmap for the programming language?

    Step5: Find Developers and Start Development

    As you have validated your idea, documented the requirements and picked up a technology stack and programming language, the next step to consider building a SaaS platform is to find the team of SaaS development service providers who can convert your dream into reality.

    SaaS applications usually manipulate data, consume web services and provide information in the user’s web browser. Due to these characteristics, building a SaaS application requires multiple skillsets.

    You would need developers that include, but are not restricted to:

    • Front end development
    • Database queries and interaction with datasets
    • Experience with one or more javascript libraries
    • Business rules development and server-side queries

    You would also require developers who have a record of developing and implementing SaaS apps at scale. You can find developers nearshore, offshore or domestically.

    Once you have a SaaS development team you want to work with, you should make sure to maintain constant communication with them to clarify uncertainties in requirements and check the progress of the project.

    You should consider various essential components of your SaaS application such as the database you want to use, scalable cloud storage to deploy your app, content delivery networks and queuing systems.

    It is essential to adopt agile development practices to achieve maximum flexibility and perform thorough testing to complete building the application.

    Step6: Production and Maintenance

    After the SaaS application development is completed, the next step is to deliver and deploy the SaaS application. It depends on various factors:

    • The product is well-tested. The development team has checked the quality of the final version of a SaaS application thoroughly.
    • A product is released from dev servers to production servers.
    • After delivery, Quality Assurance Team has tested the production server.

    Cloud hosting providers, including Amazon AWS, Microsoft Azure and Google Cloud, make it easy to provision web servers that can deploy your SaaS solution. The cloud server can scale on-demand and are equipped to deal with surges in SaaS application users.

    For example, using Azure, you can quickly configure development, test and production servers that can integrate with your development pipeline and roll out automatic releases.

    The functionality of Azure allows you to auto-migrate between virtual machine instances, that can be helpful in disaster recovery or upgrade scenarios.

    DevOps can help you deploy the product quickly by reducing time-to-market the SaaS product.

    Step7: Marketing the SaaS application

    You can execute this step even before the development of the SaaS application. It’s worth advertising your brand to generate some excitement. Gaining traction around your product prior to the building could be the key to success. For instance, Dropbox created a landing page and promoted it on Social Media that helped them obtain the email addresses of more than 70,000 people.

    Other networks that can help you market your SaaS application include, but are not limited to are:

    • Twitter
    • LinkedIn
    • Facebook
    • Instagram
    • Reddit

    The trick is to use social media channels to generate some buzz around the product and at the same time and build a mailing list that you can reach when the first version of your SaaS solution is ready.

    How to migrate your existing app to a SaaS model?

    1. Evaluate your environment 

      Create a list of your on-premise infrastructure and applications. Any company on the verge of launching into a SaaS migration must take a hard look at their existing product and find out what out of the legacy product is not worth carrying forward. Is every bit of the existing functionality significant and being used? Examine your existing infrastructure and determine each application’s status. Will it need refactoring for a cloud environment or is it cloud-friendly? The effort needed to switch is higher than the output value. Every system may not be worth upgrading.

      Map relationships between applications. The analysis mapping allows you to identify systems that should not be moved without another and those that can be merged. Acting in accordance after determining dependencies indicates minimal disruption to processes.

      The next step is to examine the infrastructure used by these apps once you identify the apps to migrate. It includes the amount of storage required, data generated, analytics, expected SLA and networking.

      Consider the money spent on server management, physical servers and hidden costs. An in-depth analysis of the infrastructure and costs can help you identify how to optimize apps for better efficiency after moving the apps.

    2. Choose the cloud environment 

      While planning to migrate your existing app to a SaaS model, you need to decide which type of cloud is best suited for your applications. The public cloud is just like a common offsite server that is convenient to use and is based on a pay-per-use model.

      On the other side, the private cloud provides a single occupant solution to a company. It is company-specific and provides better control and reliability. However, the company includes maintenance costs and it requires internal IT proficiency.

      However, the hybrid mix is a combination of public and private cloud. It requires hypervisor and cloud software layers and can handle dynamic workloads.

    3. Select the right cloud provider 

      The next step is to identify the architecture needed for the migration after selecting the type of cloud. Define the components you will require and create a list of the apps that you will migrate. Consider storage requirements and computing power when migrating the apps to a SaaS model. You should check if your hosting needs load balancer, database replication or outsourced cluster equivalents to ignore complexities in the future. Choose the cloud provider that will meet all your requirements.

      Make sure to consider all the factors when selecting the provider. Don’t skip to consider quick customer service, better feedback and the assured SLA.

    4. Perform the necessary refactoring 

      Before you move the existing applications, you may need to work on your services and applications to ensure that they would work as effectively and efficiently in the cloud as possible. For example, you may have to refactor the app so that it works well with a different number of running instances to allow dynamic scaling.

      It can save your cloud services costs. Also, you may have to refactor the app for resource utilization to make better use of dynamic cloud capabilities instead of allocating resources ahead of time statically. You can choose to allocate and de-allocate resources as required.

    The above methods can help you migrate your existing application to the SaaS business model without building the app from scratch.


    The market for SaaS applications is emerging at a rapid pace, therefore, it is now the time to come out with a unique application idea. But you need to do proper planning and analysis before developing a SaaS application for your business.

    If you are looking out for the SaaS development service provider, we can help you develop SaaS application with our expertise in the SaaS business model. You can get on a free 30-minute consultation call with our technology experts to discuss your idea. 

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Author’s Bio

Akash Takyar
Akash Takyar
CEO LeewayHertz
Akash Takyar is the founder and CEO of LeewayHertz. With a proven track record of conceptualizing and architecting 100+ user-centric and scalable solutions for startups and enterprises, he brings a deep understanding of both technical and user experience aspects.
Akash's ability to build enterprise-grade technology solutions has garnered the trust of over 30 Fortune 500 companies, including Siemens, 3M, P&G, and Hershey's. Akash is an early adopter of new technology, a passionate technology enthusiast, and an investor in AI and IoT startups.

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