How Much Does It Cost to Develop a SaaS Product?

Today, SaaS products are booming and have a massive demand in the market. After the coronavirus outbreak at the beginning of 2020, companies needed to adapt to remote work, making cloud-based tools highly sought-after.

As per Statista, the software as a service (SaaS) market is expected to reach 195 billion U.S. dollars by 2023. Building a SaaS today is more rewarding than ever before.

Commencing the designing and development process of a SaaS product without having clear feature requirements, product scope, etc., will end up taking a long time and effort to develop. This will result in a significant increase in development costs.

Hence, it is essential to analyze your project to discover the core features, scalability, tech stack, external services requirements, etc., to know the cost of developing a SaaS product.

This blog will give the idea of SaaS product development cost based on the development process.

SaaS Product Development Process and Cost Breakdown

Product Planning

The first step of the SaaS product development process is to specify your product vision, including its target audience, pain points it will address, competitors, etc.

You must build an elaborative report with extensive research, defining exact requirements, pricing models, security protocols, feature lists, monetization models, etc.

A well-planned project develops way smoother, faces fewer obstacles, and is cost-efficient. The SaaS product development company you hire will conduct the research by charging as per their average hourly rate.

Discovery Phase

At this stage, you need to discover the context of your product and its value in the market. You must build the prototype and proceed to MVP development based on the data.

The best approach to developing a successful SaaS product is to validate your project idea before spending on building a fully-fledged product. You can create a Minimum Viable Product (MVP), which contains the fundamental features of the product, maintaining its core value.

An MVP is launched in the market to gather valuable customer feedback and find out how it will perform in the market. Developing an MVP will require an average team of a UI/UX designer, a frontend developer, a backend developer, and a QA engineer, and cost between $30,000 and $120,000, depending on the product features and scope.

If you want to know how to develop an MVP, read our blog, A Step-by-Step Guide to Build a Minimum Viable Product (MVP).

Development Process

The actual product development begins after you are sure of your product idea. At this SaaS app development stage, you need to focus on interactive and user-friendly UI/UX design.

Since you have already collected customer feedback through MVP, you can optimize the feature list accordingly. The SaaS product development company will undertake the necessary steps of developing your product, including cloud storage, API integration, incorporating multiple different libraries, tools, etc.

This is the most prolonged process among all the stages, which takes anywhere from three months to half a year. Considering all the development parts, including, Frontend, Backend, Database and Hosting, it can cost anywhere between $35,000 to $80,000.

Testing and Product Launch

Before delivering your build, a SaaS-based product development company will run tests to check its functionality to ensure it functions as intended. A QA tester will test the iteration of the code, including performance, compatibility, integrations, security, etc., to refine the code and avoid errors.

Testing is an iterative process, which is crucial to make improvements in your SaaS products. In some regions, a QA specialist will cost around $30/hour- $60/hour or more.

Product Maintenance

After you launch your SaaS product, it will need constant support and updates since cloud-based applications function as a service. Moreover, proper maintenance of the application will help in consistent functioning without any breakdowns.

SaaS product maintenance is a constant process and requires a couple of developers and a QA specialist. Therefore, you need to set a budget, estimated from $25,000 to $35,000 per month, depending on the hosting expenditure and developers’ charges.

Actionable Ways to Start a SaaS-Based Product Development Company at Reduced Cost

Hiring offshore SaaS product development services can help you cut costs, which will be efficient in the long run, as the cost of hiring developers varies as per region.

Below we have given the rate for hiring SaaS product developers from different areas to help you make an efficient choice.

Note: The cost mentioned above is the average estimation. If you want to know the actual price of hiring SaaS developers, send the query to the company you are considering hiring.

Moreover, the longer the development will be, the higher the cost of SaaS development. Therefore, SaaS MVP development is recommended to reduce the cost of developing your SaaS. Additionally, you will understand the importance of each feature and launch quicker. You can use the revenue earned from your MVP to build the next version of your SaaS product.

If you want to know the cost of developing an MVP, read our blog How Much Does it Cost to Develop MVP?

The Bonus of Hiring SparxIT For SaaS Product Development

Are you interested in SaaS product development? SparxIT can help you design, develop, and deliver your SaaS product within the timeline.

SparxIT has satisfied its customers with its quality products for more than 15 years. We are a team of more than 250 professionals, having industry-relevant experience in delivering a diverse range of SaaS solutions that you can check in the portfolio of past projects.

If you have a business idea, send your details to us, and we will help you validate it.

Final Words

SaaS applications are popular for various reasons, including flexibility, accessibility, universal acceptance, and increased business efficiency.

Especially for startups, the SaaS model is crucial as it is highly cost-efficient. The SaaS product development cost depends on the project’s complexity and the development team. The estimation of building a SaaS product can cost anywhere between $50,000 and reach up to $250,000 and beyond.

We help you achieve your business goals. Contact us if you have any queries or want to hire SaaS developers.