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An Ultimate Guide on How to Build a SaaS Application

Victoria Puzhevich
Published: August 30, 2022

Providing services online is more than just a marketing trend for many companies. This opens new opportunities for businesses, allowing them to quickly grow their customer base, expand to new markets, and increase revenues. Software developers have also started to recognize the value of moving online. Those companies that have been long offering their solutions in the form of licensed software are transforming them into SaaS applications, enhancing them with cloud technologies.

The adoption of SaaS cloud technologies is happening rather fast. According to the State of SaaSOps research by BetterCloud, the average rate of SaaS apps used by companies has grown 5 times from 2017 to 2020. Moreover, it’s expected that by 2025 only 15% of all companies’ software will be non-SaaS.

Today, businesses from any industry can empower their digital solutions with SaaS from retail to marketing, to finance, to healthcare. In this article, we’ll look closer at SaaS and explain what SaaS applications are, why many businesses opt for SaaS application development services, and how to build a successful SaaS product.

What is a SaaS Application?

Software as a service or SaaS is an alternative business model that is quickly gaining traction among software providers. Using this model, software developers host their applications in the cloud and provide them to the end-users on-demand. It means that software providers don’t sell lifetime licenses to their programs anymore, instead, they offer their services on a subscription-based model which is paid yearly or monthly. Meanwhile, SaaS users don’t have to install any software and can access it under a single account from several devices via an Internet browser or APIs.

More and more businesses consider converting their software to SaaS as this model makes their products available to a wider audience. For example, such techno giants as Atlassian, Salesforce, HubSpot, DropBox, Adobe Photoshop, and many others have become more accessible for SMEs as well as individual users as they have to pay only a small fee for utilizing high-quality and feature-rich products.

Types of SaaS Applications

SaaS applications can be found in a great number of industries. Nevertheless, this model doesn’t work with all kinds of services. For example, if a company provides a one-time service, it’ll be quite challenging to convince its customers to buy a monthly or a yearly subscription. This way, SaaS is a great option for the companies that offer their services on a regular basis.

Usually, SaaS applications are divided into two major groups – B2B (business to business) type apps and B2C (business to customer) type apps. Let’s have a closer look at the two types and which SaaS apps can be developed for them.

SaaS applications for B2B

There is a wide range of applications that can be built SaaS for B2B services. They usually include:

  • Enterprise resource planning systems (ERPs) – is enterprise software for managing complex processes in companies. It can include various modules, depending on a particular company’s demands, e.g. inventory, supply chain, accounting management, CRM and HRM systems, and many others.
  • Customer relationship management software (CRM) – is a popular SaaS solution many businesses choose to effectively maintain and manage their customer base. This type of software helps businesses monitor marketing campaigns, quickly serve their customers, track product delivery, and much more.
  • Human resources management software (HRM) – is the software used by resources departments for managing staff from gathering data about present and potential employees, to benefits management, to the estimation of employees’ performance, and more.
  • eCommerce apps – this software allows online e-commerce businesses to manage their services and workflows, including supply chain management, inventory control, payment processing, automated invoicing, and everything needed for a successful e-commerce platform operation.
  • Project management tools – SaaS project management tools are a popular solution many businesses opt for to effectively estimate and manage their projects. These tools allow teams to stay on track with the latest project updates while keeping the project budget and timeline under control.
  • Collaboration tools – since the Covid-19 pandemic outbreak, online SaaS collaboration tools soared in popularity. Many teams moved online and started using video conferencing platforms, collaborative software such as Google sheets, messaging working apps, and more.
  • Marketing software – is a SaaS application that helps marketers create, launch, and track their marketing campaigns on various platforms online. Using marketing software, businesses can monitor their performance online and better adjust their offerings to customer demands.

SaaS applications for B2C

As mobile internet has become a common phenomenon and more and more people started accessing it daily from virtually anywhere, the number of online services started quickly expanding and growing in popularity. Today, the most frequently used general public cloud-based applications are:

  • Streaming platforms – American streaming services like Netflix and Spotify are used far beyond the US borders. People from all around the world can watch videos and listen to music from practically anywhere. Of course, streaming services aren’t limited only to these tech giants and there are many more global and local platforms that offer this type of service.
  • Graphics, video/audio, and text editors – online translators, image and video editing services are used by thousands and thousands of people for various purposes from blogging to personal needs, to work.
  • E-learning apps – learning on the go is an efficient use of time for many e-learning app users. Therefore, online learning apps attract major audiences, allowing their followers to master their skills while they’re outdoors. E-learning apps generate substantial revenues and many startups consider this niche when building their SaaS solutions.

Advantages of Software as a Service

Conventionally licensed software is drastically losing its competitiveness in comparison to SaaS solutions. This happens mainly because both SaaS providers and SaaS users gain plenty of benefits from this type of software. Here is why SaaS is so popular.

From a user perspective, SaaS products are:

  • Accessible – cloud-based applications can be reached from anywhere, any time, and from any device, once there is a stable internet connection.
  • Automatically updated – with SaaS solutions, users don’t have to deal with downloading the latest application versions and waiting till they get updated. Application providers can run automatic software updates in the cloud so that the users won’t experience any application downtimes. This way, cloud-based solutions are available for their users 24/7.
  • Scalable – depending on the subscription, users can quickly scale up and down their SaaS solutions within several clicks. Therefore, they can flexibly adapt the utilized software to their current needs and reduce the costs, avoiding paying for the features they aren’t using.
  • Reliable – placed in a cloud network, SaaS solutions become available even if one of the cloud servers goes down. Moreover, these applications are usually well-protected from cyber-crime as they are stored on the clouds with high regulatory compliance requirements such as PCI, HIPAA, and Sarbanes-Oxley, and have strong levels of protection, e.g. multi-factor authentication, cloud identity and access management, data loss prevention, security information and event management, disaster recovery, and more.

From business perspective SaaS solutions:

  • Allow entering a wider market – SaaS applications can be accessed by any kind of business or user from any part of the world. That’s because these applications usually don’t target any specific markets and are maximally clear and user-friendly for their customers.
  • Expand customer base – as SaaS solutions aren’t limited to one location or language, they effectively attract large audiences. Apart from wide SaaS dissemination they are also cheaper. Even complex and feature-reached SaaS solutions become available to businesses with limited budgets due to their minimum fees based on the subscription plans.
  • Ensure stable and continuous revenue – subscriptions have proved to be a more sustainable revenue source as businesses and individual users have to pay only a small amount monthly instead of buying a full licensed version for a considerable sum. As a result, users tend to keep up with the SaaS solutions for longer as this doesn’t strain their wallets.

How to Develop a SaaS Application

Creating a SaaS application is a quite complex and time-demanding process. Therefore, it should be well-planned and include a strong team of dedicated experts. There are four important steps software developers should follow to deliver a successful product.

Step 1: Planning

At this stage, stakeholders can do much to contribute to the success of the planned solution. Even before turning to a development company, they can thoroughly investigate the market, study the potential user audience, define the aim of their solution, and consider the main features they would like to include in the application.

Eventually, the stakeholders should come up with a clear idea of their app and a rough draft of its features, tech stack, budget, and development timeframe.

Some more things to consider when developing a SaaS solution are the tenancy model and the pricing strategy.

The tenancy model determines the number of tenants who are going to share the database and computing resources of one app. In a single-tenant architecture, each client has its own database, computer resources, and app infrastructure. The multi-tenant architecture involves multiple users sharing these components while having separate accounts.

The pricing strategy is about the fees for using the SaaS solution. There is a great diversity of pricing models stakeholders can consider including in their application, some of them are:

  • Freemium model – when a company provides free and premium subscriptions to its users. This way, the company attracts its audience with free offerings and then tries to convert the free users into paid ones by introducing a wider range of options for a small payment.
  • Pay as you go model – this model is a viable option for those companies that want to flexibly scale their solutions by adding the features they need. The more features customers add to their solutions the more they pay for the service.
  • Tiered pricing – tiered pricing consists of pre-set packages users choose based on their requirements and budget. The revenue in this type of pricing is more predictable for the service providers, that’s why many opt for this pricing model.

Step 2: Design and development

The design and development stage is the major part that covers the requested application development process. It can be divided into three phases – documentation preparation, application design, and architecture development.

During the documentation preparation phase, the development team and stakeholders have several meetings to clarify the project details and prepare various tech and legal documents such as a software development contract, a non-disclosure agreement (NDA), software requirements specification (SRS), risk assessment plan, cost estimate, and more.

The application design involves the creation of the application mock-ups and thinking through the requested solution’s UI/UX design. The app should strive to provide only important features that are easy to access either from a mobile phone or from a computer. This way, the users can conveniently access the app at home, at work, or when going anywhere.

During the architecture design phase, it’s essential to choose the proper tech stack and the cloud. A tech stack is formed depending on the application’s technical requirements and can include several programming languages, frameworks, and libraries. The most common languages and frameworks for SaaS development usually include:

When considering the cloud server to deploy the requested solution, product owners have to consider their flexibility, scalability, security, and pricing.

Step 3: Testing and Deployment

When building SaaS applications, software developers most often opt for the Agile approach where application testing goes along with the product development. This way, they ensure that the resulting product won’t have any major or blocking issues and will be ready for market launch.

Developing applications in Agile interations is a common practice, especially when it comes to the creation of complex solutions such as cloud-based software. Therefore, many software developers prefer starting with an MVP. MVP is a minimum viable product that includes the most important features that can satisfy the basic requirements of its users. MVPs are easy to test and launch to the market. Moreover, with MVP software developers can create solutions that closely match the end-user and customer business requirements.

Step 4: Maintenance and Optimization

Once the SaaS application is available to the users, software developers focus on its performance and seek ways to optimize the requested solution. They can add or remove certain features, identify the aspects that could be improved for the application to run smoothly, and more.

If a company already had a developed solution and it’s decided to develop and switch to a SaaS, the migration from on-premise to cloud will be a major part of the work. It will include defining the migration options, amount of data that should be transferred to the cloud, server type, downtime issues, and more.


Creating a SaaS application is a challenging but highly rewarding undertaking. That’s because businesses and their customers find many advantages in using cloud-based software. It offers its users mobility, flexibility, and lower pricing while for businesses it means a stable income and rapid expansion to new markets. SaaS development requires much experience and expertise. Therefore, those businesses that consider building their applications SaaS need a dedicated software development team who really knows their job. We are ready to offer you skilled in SaaS development, and full-fledged teams with much experience in the international software development markets. Don’t hesitate to contact us to discuss your cloud-based development project.