How to Create a SaaS Application: an Ultimate Guide

In 2024 the global software as a service (SaaS) market was more than three hundred and fifty-eight billion dollars. The greatest part of global revenue comes from the USA, according to multiple software market trend research reports. In 2034, it is projected to be more than 1.2 trillion dollars.

SaaS Application products can be far superior to local software on an organization’s internal servers. All users need is a personal device and Internet connection from any part of the world. This increases the reach of the SaaS product among the target audience. Other benefits are also in store:

• Few entry costs- SaaS development doesn’t require buying and supporting expensive hardware.
• Stable income- SaaS providers give access to apps by subscription. Regular income allows them to plan how much money to invest in their business development.
• Protection- Regular updates and centrally controlled hosting are effective against hackers and pirates. Subscription-based access also protects the SaaS product from unlicensed copying.
• Reliability- SaaS startups and other organizations deploy their services on cloud servers worldwide. If one fails, the others continue operating.
• Automatic new versions- A SaaS product doesn’t require the user to update it manually, it’s always up-to-date in functionality, and errors are quickly fixed.
• Easy scalability- Expanding enterprises and SaaS startups can change the scale of the system as needed: decrease and increase resources without investing a lot of money in infrastructure.

Those who are seeking experienced SaaS software development teams that tailor their custom development services to the specifics of SaaS startup business, follow Agile methodologies, use Continuous Integration/Continuous Deployment (CI/CD), and release new app versions every two or three weeks, can turn to Belitsoft.

What Are the Main Types of SaaS?

A vertical SaaS and a horizontal SaaS are two basic types of this product. The first type specializes in narrow niches. For example, in healthcare, this is electronic health records (EHR) software for medical facilities. The second type is broad, it is useful for many industries at once. The most popular types of horizontal SaaS Applications are:

• Content management system, or CMS for short, — a system for a website creation and managing. The well-known examples are Drupal, WordPress, Joomla, etc.
• Customer relationship management system aka CRM. Organizations manage user relations and their marketing purposes with tools such as Salesforce, HubSpot, Zoho and others.
• Enterprise resource planning (ERP) solutions like Microsoft Dynamics 365, Oracle NetSuite, and Workday play an important role in managing all the business processes (from manufacturing and sales to human resources and supply chain).
• Project management systems (Trello, Jira, ClickUp, etc.), can be named the right hand of enterprises for the work of teams coordinating and distribution of resources in a common workspace.
• Via e-commerce software solutions such as Shopify, WooCommerce, and others online retailers can manage products, shipping, and inventory, analyze sales.

How to Build a SaaS App from Scratch?

Before investing time and money into developing a product, you need to validate an idea for a SaaS product. Software-as-a-Service startups and more established companies should determine — is this product really in demand?

You should research existing competitive products, compare the need for them, and what’s missing in them. Prioritization of features based on individual user needs will give value to your SaaS product and make it unique, and it will have the capability to fill market gaps. 

Once this issue has been researched, the following strategic measures have to be taken:

1. Create the Requirements for the SaaS Product and its MVP

SaaS Application requirements are a set of documents that provide a high-level description of the product’s design, functionality, target audience, and the issues they address.

You must pay attention to the strategy of determining the main features and core functionality of a minimum viable product (MVP) to check whether your business idea is really feasible. 

The main functions of a software-as-a-service MVP depend on its “vertical” (finance, healthcare, or something else) and on the pain points of users.

Low-fidelity prototypes or wireframes allow you to recreate intricate user stories. When some of the functionalities extend the user flow, you’ll be able to pinpoint the prioritized backlog. 

There is also a set of common basic functionality for MVP — an intuitive interface, user authentication, data security control, customer support in the form of a chat bot, etc.

2. Select the Pricing and Revenue Models

To reach the optimal pricing policy, A/B testing can be employed by SaaS Application teams. Competitor monetization benchmarking also serves to find flaws or take and enhance the best practices. What monetization models to consider?

• Subscription. It’s the most straightforward model. You provide just one product with definite features for a definite price.
• Tiered pricing. In case your cloud solution serves more than one purpose, you can sell a number of packages with varying features at varying prices. Thus, you can increase your revenue by making your product available to various buyer personas. The model allows customers to select the most suitable solution.
• Pay as you go. In this model, the cost of your product differs in accordance with the frequency of its use. The more in-demand the SaaS product, the more will be your earnings.
• Per storage costs. Users are charged the price depending on how much storage they require. You can provide some storage for free and offer paid plans for customers who have exceeded their quota.
• Per-user pricing. It’s the common model for team products like CRMs, project management tools, etc. It means that you charge customers depending on the number of workers who use the solution.
• Freemium. In this model, some functionality is provided to customers for free. Advanced features are offered in paid packages.
• Ads-supported pricing. This model is nearly the same as the above, only in this case you earn money with ads instead of charging for premium features.
• Feature-based pricing. Your cloud app price is determined by features that are available to consumers.

3. Use the Right Tech Stack

When developing a SaaS Application, it’s wise to give preference to technologies with a well-established history of backing successful products. For example, stable choices generally include React for front-end web development, Node.js for the backend, and market-leading cloud infrastructures such as Azure and AWS. Let’s take a closer look at each point.

• Front end: primarily, JavaScript frameworks, i.e., Angular, Vue, or React are utilized.
• Back end: based on the system, cloud provider, and environment your SaaS product is going to run on, you should pick from a list of full-stack or back-end platforms — .Net, Ruby, Node.js, Java, Python and other programming languages and frameworks.
• SQL databases like MySQL and PostgreSQL are the most common. But column-oriented, key-value, document-oriented, and other NoSQL databases may also comprise a significant part of your system.
• SaaS mobile app development utilizes Kotlin, Java for Android, Objective-C and Swift for iOS, React Native and Flutter for cross-platform.

5. Build a SaaS Application Roadmap

When working on a SaaS Application, it is crucial to understand the scope of the project and consistently move from one stage to another. You can adjust the product roadmap at any time and make changes that the market requires.

• Define the general objectives of the SaaS project.
• Set milestones for SaaS app creation and predict approximate dates for each phase.
• Break down the process of project development into stages: Proof of Concept (PoC), MVP development, beta testing, feature addition, scaling, and technical support.
• Visualize the roadmap in the form of spreadsheets, graphs, and other instruments.
• Plan and define what enhancements will be implemented in new product releases.

6. Develop a Business Plan for Your Project

• Describe your business — what are its goals and values? Think about how your project is different in a good way from others.
• Study your competitors’ failures and successes, trends in your industry, needs and preferences of your prospective customers.
• Describe the distinct characteristics of your SaaS product, its value to customers, how it addresses their specific issues.
• Develop a sales and marketing strategy — generation of leads, creating of valuable content, promotion via SEO, determine sales channels, etc.

Include a SaaS development product roadmap in your business plan with a clear explanation.

• Predict finances — project funding requirements and profitability estimates. If you’re counting on investors and loans, specify what this money will be utilized for.
• Assess your workforce — their roles, expertise and qualifications. Decide whether you should recruit new staff and what staffing model to use.
• Determine key performance indicators (KPIs) to measure progress in your project. Evaluate potential risks and develop an action plan to soften the blow.

Find Qualified SaaS Application Developers

If looking for freelancers for each professional position seems like a waste of time and you don’t have in-house developers, you can entrust the creation of a SaaS Application to an outsourcing software development company like Belitsoft. It offers SaaS startups a wide range of software development services — MVP development, creating custom APIs, cloud migration, etc.

Top-notch specialists also offer SaaS system testing services to ensure your application functionality works as needed. They test SaaS system reliability problems, including how it reacts to the unforeseen and how well it scales.

The Belitsoft team includes UI/UX designers, senior architects, cloud architects, lead engineers, back-end and front-end SaaS developers, scrum masters, delivery managers, product managers, and project managers.

Healthcare SaaS Application Development: What Does the Client Gain?

The services offered to SaaS startups include remote patient monitoring tool development, clinical information platforms, and EHR systems. On top of this, as a SaaS startup, you benefit your clients by offering improvement of various patient care workflows: complication prevention, pre-operative care, etc. 

Artificial intelligence, natural language processing, and APIs are utilized for automatic entry of patient info, rapid identification of prescriptions, and deep reading of clinical records. These apps carry out medical image analysis, and enable data exchange between electronic medical records and CRM. The SaaS app is fully FDA, ONC and HIPAA compliant thanks to encryption protocols.

Finance SaaS Application Development: What Does the Client Gain?

Belitsoft offers its latest expertise in finance SaaS development to startups and businesses that operate in cryptocurrency, online banking, mortgage and lending, insurance services, etc. Experienced developers create secure, stable, high-performance, scalable, and easy-to-use financial SaaS products that can support millions of users. 

They transform customers’ projects into financial web and mobile SaaS software through visual prototyping, third-party API integration, financial software testing, maintenance and updates, and scaling and refactoring with a new tech stack of React/Node.js,.NET/Python, AWS/Azure, and AI. They integrate payment gateways, online chats, and biometric login functionality among others into your SaaS app.

How to Migrate a Current Application to SaaS?

If you are determined to migrate your application, follow the tips below.

1. Start from Migration to Cloud, if Your Existing App Is Local

You have two options — either you leave the development of your app and focus on the migration process only, or you are migrating to the cloud while maintaining an existing app.

The first one is more cost-effective than the second but it has an unfavorable aspect; your customers are working with a legacy application for some period. 

The second one involves two teams working in parallel, therefore, it is more expensive. 

Having selected the correct option, go to the next steps.

2. Evaluate if the Architecture Needs Drastic Redesigning

Custom SaaS applications possess distinctive architectural requirements so that they can scale and be secure. Under SaaS migration, the developers decide on a tenant architecture model.

All SaaS designs usually are either of the two general tenancy types: single-tenant or multi-tenant architecture. Tenants stand for customers who are able to use your SaaS system.

• Under a single-tenant architecture, one customer can use an instance of the application with a dedicated server, database, and application layers. This is a typical practice for apps supporting highly regulated industries, such as finance or healthcare, on a private cloud to add an extra layer of security. It also provides the tenant with more control and app customization. The limitation of single-tenant architecture is increased expense in terms of cloud vendor fees and maintenance.
• The multi-tenant architecture gives several customers access to one instance of an application, where they all share the same server, database, and infrastructure. They have some ability to configure the app, but they can’t control the hosting infrastructure. This shared infrastructure is more cost-effective and can offer almost unlimited scalability. But the behavior of one tenant has the potential to impact others, so they need to put in place additional security measures to maintain data privacy. Multi-tenancy underpins most consumer-facing SaaS applications.
• When an isolation of the end B2B customers’ information bases is needed, the mixed-tenant architecture comes in handy. SaaS startup owners easily create a new isolated and secured database on a web server as soon as a new client joins. The Belitsoft developers use the mixed-tenant architecture to give the SaaS startups an opportunity of individual approach for tenants. Different tenants get releases with different velocities, due a small business might want updates quicker than minor bug fixing and a large client prefers to double-check functions.

Developers implement any of the tenant architecture models with the design approaches, given below.

• A monolithic architecture is one large network of computing with a unified code base that keeps all of the business issues in one place. To make a change to this kind of application means to change the entire stack by going to the code base and compiling and deploying a new version of the service-side interface. The advantage is that monoliths can be handy at the early stage of a project because of easy code management and deployment. Developers release everything in monolith at the same time. The downside is that making updates is restrictive. 
• In Service-Oriented Architecture (SOA), the apps consist of interconnected services that exchange data among them through APIs. Each service here is a certain business function of the entire system, e.g., login, app processing, payment, etc. SOA is centered on reusability as the same services are reused and leveraged across multiple apps. Compared to a monolithic design, SOA provides more flexibility and spares programmers’ time.
• Microservices architecture is a flavor of SOA. It enables you to split your SaaS software into smaller, loosely coupled services with even finer granularity. That is, if a specific service crashes, it will not impact the whole ecosystem and other services will run as usual. These microservices can be independently created, rolled out, scaled and linked to a specific business capability.
• Serverless Architecture aka Function-as-a-Service (FaaS) means that your provider hosts the infrastructure and manages the servers. You can focus on business logic. Scaling happens autonomously, you use the computing resources where you need them and accordingly pay for them.
• In Event-Driven Architecture (EDA) many app components interact and respond to events. Events are some user interactions or changes in data. EDA favors loose coupling, because components don’t have to be aware of other components directly. EDA fits well in real-time interaction systems, e.g., graph design editors and so forth.

3. Work with the Code and Perform Tests

If the programming language or framework does not support modifying the code for the cloud environment, the developers start over from scratch. If the codebase is decent enough to be migrated to the cloud, developers review code and improve it. This might be about rewriting certain parts of code that were not written following best practices, are insecure, or have too many unnecessary components.

Local apps may lack the components SaaS applications require. Developers add needed elements like admin data panels for support teams and clients. They also add functionality for account management, billing, etc.

The next “to do” point the developers make is merging all parts of code that were optimized independently by each developer in one codebase. And the final cord is transferring the codebase to the cloud platform from the local system.

The app’s performance stability should be evaluated. Then testers make three types of testing: penetration, functional and load testing. They control if all the components work together in an accurate and smooth mode by integration unit testing. Real data are secured because testers use fictitious data.

4. Migrate App, Check Its Stability, and Deploy App to the Production Environment

After the app migration, the Quality Assurance (QA) team performs user acceptance testing (UAT) before the app’s release. During UAT testers check how the app responds to requests of users, how it deals with functional and business tasks, and the presence or absence the weak links in work with real data. After the approval from the QA team, the app can be deployed.

How Do the Custom Software Development Companies Assist?

SaaS startups choose Belitsoft because of its expertise in SaaS application creation and integration for 20+ years. Clients come from diverse industries: healthcare, financial, automotive and others. Among other services, Belitsoft provides:

• Creating end-to-end EPR systems that are specific for certain domains.
• Configuring ready-made performance tools (templates), e.g., lists, labor estimates, expected project results, etc.
• Building and implementing modules in the SaaS ERP for handling complicated projects with reliable methodologies.
• Carrying out specific security protocols to comply with GDPR, PCI, HIPAA and other standards depending on the project’s industry.
• Implementing SSL and TLS encryption for app’s security.

Team specialists offer in-depth tech knowledge in MySQL, Vue.js, .NET CORE, etc., and the capability to release MVPs and complete projects quickly. 

About The Author

Dmitry Baraishuk is a Partner and Chief Innovation Officer (CINO) at the software development company Belitsoft (a Noventiq company) with 20 years of expertise in digital healthcare, custom e-learning software development, Artificial Intelligence (AI), and Business Intelligence (BI) implementation.