IDEA-TO-LAUNCH GUIDE TO SUCCESSFUL SAAS SOFTWARE DEVELOPMENT: BEST PRACTICES

The mere existence of SaaS software development is the embodiment of the otherwise ephemeral notion of a win-win scenario: 

1. Users get the best of sophisticated software at a cheap monthly subscription rate with plug & play  integration
2. Investors can use a myriad of solid KPIs to make informed decisions on [CAC, MAU, churn rate, MRR], gauge risks and reap profits accordingly
3. Product owners get to materialize their idea and ensure the satisfaction of users and investors
4. Governments get taxes, economic growth and a well-regulated economic player

The unstoppable growth of the SaaS public cloud apps market only confirms the beneficial formula of this model of tech service delivery: the segment was worth $152 billion in 2021 andt is expected to grow to $176.6 billion by the end of 2022. Moreover, if this 16% growth seems radical, the market is expected to grow another 17.5% in 2023, reaching $208 billion in annual sales.

However, about 90% of SaaS businesses will fail within the 3 years of opening. Many let blind trust in their “brilliant” idea lead them into spending money where there’s no market-product fit, fail to plan their cash flow, and disregard the red flags of churn rate being higher than growth rate.

As a software development partner with over a decade of experience in helping build SaaS projects, we have compiled this insider guide for Software-as-a-Service companies.

What is SaaS Development?

SaaS software development is the process of developing software products on a SaaS cloud computing delivery and licencing model, wherein users get access to a product on a monthly subscription via the internet, while the servers, storage, O/S, networking, middleware, runtime, and app development are taken care of by the provider.

Shopify, Adobe, SalesLoft, DropBox, and Wix are some popular examples of SaaS providers.

IaaS and PaaS cloud computing delivery models are the other 2 major licensing and delivery models for cloud computing. They suggest more responsibility on the part of the user — and less on the part of the provider.

The Classic Set of SaaS App Features

As digital transformation seeps into every industry and market segment — be it B2B, B2C or C2C — there’s a SaaS solution for pretty much every major function. Sales and marketing automation, supply chain management, car rental, accounting, healthcare management — there’s a program for every niche.

This means that all of them are different, as church management is drastically different from restaurant management.

Nonetheless, the below features are a staple for a vast majority of programs — irrespective of the segment they serve.

User Onboarding Screen

On average, a SaaS company will spend around $205 in CAC — so before a person even onboarded, your team and investors spent quite a bit to get them to this stage. This is why UX/UI design of the onboarding screen is so critical.

These are some of the options you may opt for to smoothly and seamlessly introduce a user into your product with little bounce-rate on the way:

• Product tour
• Interactive walkthrough
• Tooltip
• Checklists
• Gamified onboarding scenario [quiz, easter egg hunt]

We also suggest you use progress bars and allow users to skip any educational activities so that they don’t lose interest because of the work you are making them do.

Access Management SaaS Feature

Identity and Access Management has to do with user experience as much as security of a SaaS application.

You may opt for a multi-factor authentication [MFA], single sign on feature [SSO], or a zero-trust policy. You may also choose to have RBAC, ABAC or PBAC user access control types [Role-Based Access Control, Attribute, and Permission-Based].

A lot of these decisions will be mandated by the industry business model you are serving: be it B2B, B2C or C2C or governmental institutions, which may have extra layers of security embedded into the application.

User Profile Management

The user account will have a few must-have fields like personal data and preferences and settings.

Account history and communication may also be part of the user profile in some SaaS solutions.

Admin & Merchant Profile

Big eCommerce platforms like Amazon and eBay have merchant accounts as well as user accounts. Merchants will have a different outlay, as they will use invoicing, billing, store management options, wherein buyers will have their purchasing history and delivery preferences.

Admin profiles and merchant profiles will also have some personal data like name, surname, DOB and billing information, but they will also have a myriad of other fields and screens depending on industry and functions.

Analytics and Reporting

Analytics and reporting functionality will usually have some dashboards and visualization of key trends, figures, statistics for your account’s activity:

• History of sales / purchases
• Comparative YOY graphs
• Top sellers / Features items

For example, if this is a HealthTech application, a patient’s version may have a graphical history of all visits, reports on medical invoices over a period of time, or prices for recommended doctors. A doctor may have a number of patients per month, insurance types, or diagnoses.

System Integration & API management

B2B SaaS solutions depend on their technical ability to sync with other business programs. 

Zapier is one of those third-party systems that helps businesses integrate their apps with more than 5,000 contracted partners via webhooks. There is a free pricing plan, but enterprise level solutions come at just under $900 per month if billed monthly:

Joining the Zapier pool of apps smooths your integration for their customers. It’s a good marketing activity for universal SaaS products, like sales or email automation programs. 

If you are in a niche market, developing your own integration solution or a custom API management system with a key supplier can allow a new business to get onto an email newsletter of a major industry supplier at little cost.

Billing & Invoicing

This feature may get really sophisticated for those developing SaaS applications in the B2B segment.  Each screen will have multiple data fields like order ID, PO number, items, cost, shipping cost, supplier name, date of order, or date of shipment. Filtering and sorting options are often part of these dashboards, where users can choose dates, and filter or sort data as per specific filters.

Bill creation, management, sending and storing are just a few of the features of such modules.

In a B2C SaaS system development, these may be pretty straightforward with a few pricing plans and a payment integration.

Notifications & Communications

When building SaaS applications, businesses need to also think of methods to acquire, retain, engage, entertain, reward, and upsell to users.

Push notifications, in-app messages, alerts, pop up messages, SMS reminders, and email confirmations are just a small fraction of the features that enable these missions.

Those products that are limited in budgets and/or are only looking to A/B test an MVP before investing more into a custom feature development, may also use a notification Software as a Service like Beamer:

Factors to Consider When Developing a SaaS Application

These characteristics set SaaS application development apart from other software development projects:

Downtime Intolerance

SaaS businesses serve multiple clients, many of which will be businesses serving other clients. So if their service goes down, reputation and legal losses are inevitable and exponential. 

High availability is a pre-requirement that many top SaaS development companies have in their SLA agreements. The best practices to keep systems running over 99.9% of the time include usage of autoscaling, load balancers, implementation of multiple application servers, and vigorous monitoring framework.

Robust Application Security

Depending upon the complexity of your application, you may have hundreds of thousands of users, thousands of merchants, and dozens of admins all having access to a select number of features and their customizations.

AppSec best practices include access management activities, perimeter network control [proxy, firewalls, IDS/IPS], data protection techniques  [encryption], and incidence management methods [forensics, logging, and monitoring].

Multi-Tenancy

Multi-tenancy allows SaaS developers to create an architecture where multiple groups of users with common characteristics and access can use software instances simultaneously. 

In a multi-tenant architecture, users get access to a dedicated share of an instance with its own data, user management and config settings.

Subscription-Based Billing

Many of the SaaS companies survive on a subscription-based billing model, which was the initial default setup for all SaaS products. Under this model, users can purchase access to a software application by paying a subscription fee per month or by the year.

Now more SaaS businesses embrace more advanced monetization techniques on top of this basic one, including charging  extra for access to premium features, tiered access systems, or charging by the user. 

Automated User Provisioning

Identity lifecycle management of a SaaS customer enjoys the benefits of Automated Provisioning, whereby user access gets granted, changed and upgraded automatically without manual intrusion. 

This smoothes out the onboarding, upselling process, and tier upgrades as well as user profile deletion or deactivation.

Single Sign-On

Single Sign On or SSO is often embedded into the IAM framework of a SaaS solution. This Federated Identity Management technical concept allows users to use the same set of credentials to log in to different services.

From the SaaS software development perspective, a lot goes into addressing this security commodity [including adaptive authentication, IP whitelisting, and which device trust features are used].

Elastic Infrastructure

Elastic architectural infrastructure accommodates for ups and downs in compute capacity usage by preconfigured VM images and connectivity that is delivered on a self-service basis.

SaaS Technologies and Architecture

In the majority of cases when we talk about SaaS software development deployment, we talk about cloud infrastructure: be it hybrid, private, public or multi-cloud environments. This means that most of the services will be available to users via cloud — over the internet.

Architecture-wise, microservices or serverless architecture is a preference, as high availability and scalability are critical to any SaaS solution. Therefore, a monolith architecture would be a poor fit.

When we speak about tenancy, multi-tenant as well as mixed-tenant set ups are dominant, while some SaaS solutions exist that employ a single-tenant setup, providing an individual set of commodities to an individual user.

Tech Stack Used for SaaS Software Development

The reasons for choosing this or that framework or programming language may come from all places — so the languages and frameworks used are all over the place too. Some of popular tools and technologies include:

Programming languages

.NET, Python, Node.js, HTML, Java, CSS, Angular, React, Ruby, Django, PHP, Kotlin, Swift

Datastore & Message Queues

PostgreSQL, MySQL, MongoDB, SQL Server, RabbitMQ, Apache Kafka

Servers

AWS, GCP, Microsoft Azure

Visualization

Angular, Redux, React, TypeScript, Cordova, Ionic, AG-Grid

QA Automation

Playwright, TestComplete, Cypress, Puppeteer, Jest, Gatling, Locust

Businesses will choose a tech stack to develop a SaaS application based on their existing team expertise, short term and long term business goals, industry best practices and budgets.

Steps of SaaS Software Development – How to Develop a SaaS Product

SaaS software development life cycle includes Discovery, Design, Development, Deployment, Integration, Testing and Maintenance stages.

Let’s review some of the major, not-so-technical milestone phases of SaaS application development.

Do Your Market Research & Be Ready to Take “No” for an Answer

Around 92% of SaaS businesses will fail within 3 years. So when approaching any business idea it’s worth putting your enthusiasm on a leash until you need it to convince investors.

Product owners are usually best guided by facts, figures, stats, market trends, and consumer research.

These factors increase probability of a successful experience for product owner:

1. Solid experience in SaaS product launch marketing and development.
2. Digital marketing background in influencer marketing, social media ads, Google ads, or email marketing.
3. Extensive network of angel investors, venture fund, or personal savings to bootstrap.
4. Profound software development experience and/or a strong team.

If you have none of these characteristics, this product and market research phase is critical and should have a sobering effect. During this step you should have answered these questions:

• What’s your addressable market, Ideal Client Personas, prime target country locations?
• Is there competition or were there attempts to create similar products? Why did they succeed / fail?
• What are the USPs of your SaaS solution as opposed to existing offerings?
• What’s your ICP’s customer journey, pains and gains? What issue do you help them solve? Is this an imaginary issue that they have plenty of roundabouts to solve or a burning “just-take-my-money” one?
• What are the immediate monetization models and pricing points for your product and how does it compare to others? How do you plan to upsell if all goes well?
• What features will you aim to develop as your MVP and what goes next?
• What legalities do you need to comply with to launch your product?

Depending on your SaaS development background, budgets and timelines, product owners should step into this exercise ready to back off. Lack of market-product fit, team issues and cash flow problems are top reasons for failure for SaaS startups — so any facts hinting at these hiccups must sound a bell.

Strategize the Monetisation Plan

Subscription plans for SaaS software are fairly straightforward. You have a monthly price and an annual price [which comes at a discount of 5-15% ]. 

Getting money for an annual subscription is great, as you have the lump sum up front, but on the other hand, you will need to serve this user for the rest of the year with no more input to your cash flow. This concern can prompt you how big the discount for annual subscription should be. If you have every faith in your product’s performance, have a solid referral and influencer campaigns set, you may opt to go for a smaller discount for an annual subscription.

Freemium pricing is also worth a thought, as long as free trials. We recommend making free trials short — no longer than 2 weeks, as people take it for granted and never come round to testing the product. The shorter the trial period, the more pressure they have to take advantage of the offer.

As your SaaS business matures, you may want to diversify your revenue streams, offering upsells, access to unique features, charge tiered rates per user or data storage used. But considering all options initially is the best practice, as it signals ambitions and clear vision to investors.

Get Ready With the Cloud Infrastructure

When building SaaS applications, choosing a cloud service provider is one of the major technical decisions you will make. Whether you opt for AWS, GCP, or Azure products may depend on your previous experience, close proximity to a cheap AWS zone or team member background. You can always go multi-cloud later, but migration is a complex project, so choose wisely.

The rest of the tech stack needs to be thoroughly considered and compiled on the industry’s best practices. Are you going to do both: Android and iOS applications? What architecture are you going for: microservices or SOA? Is it mobile-first design for a SaaS solution for people on the go?

Once you have got your tech stack and team structure figured out, it’s time to move on to MVP development.

MVP Development, Testing & Feedback-based Modifications

A minimum viable product version is essentially the most basic prototype of it with just one or two core features. This stage of Software as a Service Product development allows the product owner to gather feedback from stakeholders, testers and users, as well as to persuade investors to come onboard — all in the short period and at reasonable cost.

When it comes to the cost of MVP development for SaaS, it’s sensible to budget anything in the range of $70,000-$100,000 for a basic set of functionalities, assuming you manage to find a reliable software development vendor with a remote team based outside the US or EU.

While it’s a “rehearsal” version of the product with only essential features, it’s critical to design and build it with the best DevSecOps practices and robust scalability potential in mind.

Developing the Final SaaS Product

When all feedback is gathered, modifications are implemented and a positive consensus is reached to take the product development further, the final team recruitment takes place.

Developers, testers and DevOps engineers work according to the SaaS product development roadmap inline with Agile methodology to build the full set of initial features for launch.

Continuous Deployment and Continuous Testing practices should be embedded into the SaaS application development lifecycle for frequent feature release, accelerating time-to-market.

SaaS Product Marketing and Promotion

SaaS product marketing has a few vital starting points that define the entire promotional approach:

1. Is it a B2B or B2C product?
2. How niche/large is the addressable market?
3. How saturated is the offering on the market?

Answers to these questions will outline two key fundamental aspects in how you will acquire customers:

1. Main channels of the promotion and client acquisition
2. Monetization and pricing model ideal for your SaaS product

In the best case scenario, marketing talent on your team will cooperate closely with the product owner, project manager, stakeholders and designers to be able to finetune your product to the research-based ICP’s best interests.

The freemium model and free trials are quite often the vehicles to nimble acquisition. Email marketing list needs to be collected at least half a year in advance to ensure a basis for successful launch.

Launch of the SaaS Product, Maintenance & Updates

When drafting the SaaS product launch marketing plan a professional will work in close cooperation with the software development team.

At minimum, the following milestones should be achieved by the marketing team before launch:

1. An email database with high pertinence to the product should be collected for the launch campaign of at least a couple thousand emails.
2. If referral marketing is part of your SaaS marketing strategy, all software tools must be integrated and tested.
3. Same goes for influencer marketing.
4. A landing page as well as social media presence should be established with solid following and retargeting audiences collected.
5. A robust feedback and review engine should be in place to both: create a great rating on the App Store as well as to address the burning technical issues with the next release.

There are multiple ways to approach your marketing and it’s up to your niche speciality, budgets and team expertise to leverage any / some of them. Conference attendance and podcasts all work to extend your network for the offline launch party.

Updates and maintenance are performed in close collaboration with the marketing team, so an internal engine of feeding user feedback to the DevOps is essential.

SaaS Development Team Composition

How is a SaaS development team structured?

There’s not much difference to the regular application development team, though the role of the business analyst and project manager goes up. They need to keep finetuning the product inline with the customer feedback.

This is the minimum SaaS product development team composition:

• Product Owner
• Product Manager
• Solution Architect 
• Business Analytic
• UX/UI Designer
• Developers 
• QA 
• DevSecOps

The software engineers you hire for a SaaS project will be a few depending on the size, timeline and budgets and be versed in the tech stack required.

Cost of Building a SaaS Application

Asking the cost of a SaaS software development project is like asking how much a house will cost from foundation to chimney.

The cost of a house construction depends on the location [which dictates the cost of labor, materials and their delivery], size, ambitions, and timelines.

The cost of developing a Software as a Service solution depends on these key factors:

1. Complexity of the solution, budget available, deadlines, tech stack.
2. In-house vs outsourced team [in some countries employee benefits and taxes are prohibitive, so many SaaS businesses turn to Eastern Europe, Asia, and LatAm markets for talent].
3. Expertise and background in SaaS software development available to the project [this aspect is the most intangible of all, however can be a powerful acceleration index for the project].

With all of the above considerations, there’s a fine balance businesses have to manage in this respect: delivering a high quality code with all necessary security features and a per hour rate that is lower than that of a Silicon Valley company.

Dev.Pro — a SaaS Development Partner that Accelerates Growth

SaaS projects are always work-in-progress, so when it comes to outsourcing its development, it’s more about partnership than mere task-by-task offshoring.

The Dev.Pro team has helped develop one of the global leaders in sales automation software solution SalesLoft among other relevant experiences.

Discuss your SaaS development needs with our team for a free project estimate after a 15 minute intro call.