SaaS Software Development: process, challenges & benefits

Software as a Service (SaaS) continues to be the fastest-growing industry in terms of delivering robust business solutions. At this point, let’s figure out what its pros and cons are, how to overcome challenges concerning SaaS software development, and to build a well-thought process of SaaS business. Also, you get informed about the tips for selecting the SaaS software development company.

SaaS software development services are primarily designed to automate the work and reduce the operating costs of the business. However, today, most people leverage SaaS solutions on a daily basis. A common occurrence when SaaS services are used for customer communication, image editing, CRM, analytics, ERP, and much more. In short, for everything. 

Still, developing a performance-focused SaaS app is not easy. Thus, here we’ll talk about the SaaS software development services, starting from the basic understanding of the model and diving deep into the development details. Once you’ve read this article, you’ll be armed with the information you need to make smarter SaaS business decisions.


  1. What is SaaS Software Development?
  2. Advantages of SaaS
  3. Challenges of SaaS Software Development
  4. Process of Software as a Service development
  5. How to choose a company for SaaS Development Services?
  6. Conclusion
  7. FAQ

What is SaaS Software Development?

Software as a Service (SaaS) is the business model, in which the customer (the company or individual) uses ready-made software that is deployed on the provider’s platform. The product works on a subscription basis and is centrally located on a remote cloud infrastructure. 

Under this model, control and management of the main physical and virtual infrastructure of the cloud, including the network, servers, operating systems, storage, or even individual application capabilities are carried out by the provider – SaaS software development company.

SaaS technologies have made it easier for enterprises and software vendors to efficiently deliver the required functionality and capabilities to end-users, ultimately driving the popularity of SaaS solutions over on-premises software products. Besides, the sudden impact of the pandemic around the world has only increased the popularity and use of SaaS solutions due to their flexibility for the remote workforce. 

Also, get to know extra information on how machine learning helps businesses to operate their supply chains more efficiently and be resilient enough, even in the face of day-to-day volatility.   

Advantages of SaaS

If turning to statistics, according to Gartner, the annual growth rate of SaaS space is projected to exceed 17% in 2022. What’s more, according to BetterCloud, SaaS apps account for 70% of total company software usage. And this is not surprising: they help employees to do their work faster and increase their productivity. This way, among the major advantages of the SaaS development platform, we can underline the next:

  • Get access to advanced software apps. Users can run most SaaS applications directly through a web browser without having to download and install software, although some applications require plug-ins. This means that you do not need to purchase and install special software for your users.
  • Provide cost savings. SaaS software leverages cloud-based capabilities to lower on-premises infrastructure costs. In addition, users don’t need to spend a lot of money on expensive software. Instead, they can pay for a subscription for the features they need and stop paying if they no longer leverage the service. You save money as the SaaS automatically scales to match your usage.
  • Increase the mobility of your employees. You don’t have to worry about developing applications to run on different types of devices, because the service provider has already done it for you. Consequently, SaaS enhances the mobility of your employees, since users can access SaaS applications and data from any computer or mobile device that is connected to the Internet.  
  • Security is ensured. There is no need to hire qualified professionals to solve security problems that may arise. A properly selected SaaS software development company ensures the security of your information, regardless of the type of device that leverages the data.
  • Focus on the core business. Whereas for traditional software, the user has to take care of things like updates, performance, reinstallation, load balancing, etc. With SaaS software development services, the user does not need to know the underlying complexity of the tools and update the system. Overall, it helps the company to concentrate on solving the core business activities. 

Challenges of SaaS Software Development

It would be a mistake to think that building a SaaS application starts with actually developing a SaaS platform. First of all, you need to fully understand the idea of your project, its audience, and most importantly, the challenges you might cope with.

Challenges of SaaS software development services
Image source: FreySoft

We’ve identified the most common SaaS software development challenges and how to prevent them.

1. Target audience 

Despite the trend of vertical development, it is not recommended to choose a too specific niche and its audience. As a provider, you need to update your application regularly and constantly optimize it. If the audience were too narrow, your SaaS business would be unprofitable. 

The solution to this issue is the ability to expand functionality, or rather horizontal development. This is one way to attract a more versatile customer. For it, conduct a business analysis to understand demand, competition, and trends in functionality.

2. Security

As a SaaS development company and the vendor to your clients, you need to provide all the necessary guarantees to ensure optimal support and security, including backup, intrusion protection, data encryption. This way, your SaaS business gets a stronger reputation and loyal users. 

Further, when it comes to payment transactions, data privacy is critical than ever. Developers need to examine all technical issues concerning payment transactions, set automated and manual tests to ensure the properly-executed process. For many companies, this is one of the major arguments in favor of choosing the SaaS development platform.

3. A zero-downtime deployment strategy

All-time availability to the app is what the user wants and needs in our era when leveraging the product. Ensure your development team keeps a zero-downtime strategy onboard so that when the new version is released, the system be fully accessible to the user. This way, the service is fully responsive and stays available all the time. 

4. Third-party integrations

Integration of tools like cloud integrations, third-party payment integrations, will help you provide a better product experience. But here we recommend leveraging SaaS consulting since any mistake in the integration process can make your product vulnerable due to security issues, poor performance, difficult communication, etc.

All in all, different tasks await you at each stage of the SaaS software development process. In these terms, be practical about the budget and project timeline. Many companies face unexpected costs or delays in product delivery due to underestimation of development work. The best way to ensure this doesn’t happen to you is to make partners with a trusted SaaS development company.

Process of Software as a Service development

SaaS software development stages include the next:

The stages of SaaS software development services
Image source: FreySoft

1. Competitive research and analysis

This phase includes identifying your SaaS product requirements and your target audience’s needs. Once you contact a trusted SaaS software development company, its teams gather the related data from the market, your competitors and get to know your product features well. This ensures further best-way SaaS consulting to achieve your business goals.

2. Choice of the tech stack

Based on the data from the previous step, the SaaS development company identifies the tools and resources needed for the implementation of the product. That is the selection for the front-end and back-end development, the back-end storage database, and the application server. Find more about the roles and functions of the participants of software development team structure in our recent article

The main aspect to consider when choosing a technology stack is the scale of your project, the maturity of the technologies, and integration with third-party systems.

Need help choosing a technology stack for your SaaS project? Leave your contact information and our technical experts will help you make the right choice!

3. UI/UX Design

The development team makes a UI prototype (a schematic sketch of the SaaS service) to clearly understand what visual components and where within the platform will be located. Also, you get informed about the users’ roadmap, how they interact and navigate through the software. After getting your approval on UI/UX design, the development phase starts. 

4. SaaS MVP

To verify the SaaS product’s idea and its functionality, the best approach is first to develop a minimum viable product (MVP). Within the obtained data and metrics of the MVP, you can prioritize those service characteristics that are important to users and identify unclaimed ones; get feedback on the quality of the product, and find out which direction of development will be the most optimal. As a result, this guarantees a stable base for further full-scaled production of the SaaS platform.  

5. Testing and modifying

The choice of software development model within which your SaaS product will be created is based on many factors. Cover the 8 variations of methodologies you can apply within your development process to select the best-suited one for your case. 

During the modifying phase, make sure that you share a common vision of the product’s features and requirements with your SaaS development partner. What’s more, the inclusion of QA from the start brings potential problems and clangs to the surface. This way, we recommend turning to the SaaS DevOps services for continuous development, monitoring, testing, and fast ROI. 

6. Launch and support

The final step in the development process is to deploy the SaaS application. The vendor provides you with professional maintenance to solve possible technical problems or if you need any assistance.

How to choose a company for SaaS Development Services? 

SaaS development services may be of different types. The most popular ones are CRM, ERP, HR, accounting and billing, e-commerce, email marketing, data, and project management. Depending on what you need, you should make the choice of a SaaS vendor.

Here are the key criteria for selecting a trusted SaaS development company:

  • The variety of expertise and pool of talents 

When choosing the right partner for SaaS development, it is important to evaluate the skill set and available experts that you need for the process. The right team of engineers can help you cover all aspects of SaaS development. Keep in mind, not every company has specialists in all technologies. This way, you should narrow your developer search based on the deep evaluation of particular tech and domain expertise.

  • Experience in SaaS development services

Initial research on the company’s previous SaaS business experience is essential to ensure that your goals will be met with the vendor’s technical solutions. Target a SaaS development company that has the right team with a vivid portfolio in your type of project. 

A company’s portfolio will help you gain a reasonable understanding of their process of work and methodology for the project. This will allow you to estimate whether they can align with your premises or not.

  • The budget 

Your budget expectations matter. A reasonable understanding of the estimated costs increases your potential benefit. To make the project cost-efficient and organize your finances more properly without disruptions, explore the various alternatives of payment methods that fit your spending plan before making any choice.

Be sure to decide on the payment system in advance to avoid any inconsistencies later. A reliable SaaS professional product development company will have clear and flexible payment plans, including full-time equivalent (FTE), fixed price, dedicated teams, blended hourly. 

What’s more, by turning to an offshore SaaS based development company, you can save up to 30-40 percent of your budget depending on the engineers’ rates by country

  • Communication

Communication between your in-house team and the SaaS development company is crucial for creating a quality product. Optimizing communication helps you constantly guide engineers in the right direction and mitigate any risks found in the development process.

To illustrate, at FreySoft, the team sets a scheduled communication plan, mutually agreed upon with the client. We are available during business hours in Slack, Google Hangouts, Zoom, etc. In case of an issue arises, the client can always contact us, and we will help to solve the problem. 


The market of SaaS software development services is still evolving, and there is no better time to implement SaaS solutions than now. Consider all the key points mentioned in the blog to find the right people to create unique and highly demanded SaaS applications. By following these tips, we are confident that you will be able to achieve your business goals and ensure success in both the short and long term.

At FreySoft, we have a holistic approach to SaaS software development services. That enables us to implement all the components required for a successful SaaS solution, in particular web and mobile app development services (Native Apps, PWA, and cross-platform solutions), APIs, efficient storage, and cloud hosting. 

We follow modern DevOps-based software development methods so that you can provide your users with great SaaS products as quickly as possible while ensuring the stability and reliability of your service.

Want to take the first step in building your own SaaS application? We’re here to help.


What are the costs of SaaS software development?

There are several cost criteria when creating a Software as a Service product. They comprise business analysis and design, server costs, monitoring software, development, support and marketing.
The fewer stages are included in the development of a SaaS software service, the lower the price is, however, the higher the risks of failure are. And vice versa. The more the SaaS development company does pre-project analytics, research, audience segmentation, etc., the more expensive is the cost of developing, but the likelihood that your project will “take off” is much higher. 
Overall, based on the mentioned criteria and the rates of provider, the price may vary between $20,000 and $700,000.

How does a SaaS model work?

SaaS is software that is owned, supplied, and operated remotely by one or more vendors. SaaS companies maintain the servers, databases, and functioning of the software to enable the product to be easily used over the Internet by subscribers (users). 
The SaaS service is hosted in cloud storage, on a server that can be located anywhere in the world. And to gain access, the customers pay a certain price for use on a monthly/quarterly/-year basis. Typically, SaaS may have different financial models, but subscription service is the most common option today.

How long does it take to develop a cloud-based SaaS application?

To calculate the time required for creating a cloud-based SaaS application, the vendor will consider the scale of the project, required features, tech stack and the number of involved team members. Typically, it takes from 2 to 10 months (for a functioning version) to develop a mid-sized SaaS application. Building MVP first will take less time and effort, around 3 months.

How do you design a SaaS product?

To retain users of the SaaS product and ensure they become repeat customers, UI/UX design is required to be exceptional, stand out from the competition, and at the same time be convenient for the user. Thus, for creating UX design, we stick to an iterative process. Our developers and designers build and test a prototype, edit and again test an improved product, and so on until the clients and their users get the highly-performed and user-friendly SaaS platform. That is, with each repetition, iteration tends to get closer to discovering the best-fitted UI/UX design.

How secure is SaaS?

Data security and reliability are a top priority for companies moving to SaaS. At the initial stages of partnering, the trusted SaaS provider will discuss the applicable security strategies with their customers. 
Modern SaaS platforms ensure that your company’s data is isolated and open only to the people who have access to it. This way, the development team will provide the same or higher level of security in comparison to solutions running in the enterprise’s own infrastructure.

How do I create a SaaS application?

Building a SaaS application doesn’t start with the actual development process. First of all, you need to fully understand the idea of your project, know who your target audience is and why they will want to use your SaaS platform. That is why the best approach is to find a SaaS development company to assist you with professional SaaS consulting. Its experienced teams can effectively study your competitors on the market and verify your idea as well as how you can make money with your SaaS platform.

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