SaaS, an acronym for Software-as-a-service, is a software delivery and licensing model. It is a trending topic of discussion in the IT market today. From covering a large user base to enabling organizations to attain incredible business advantages, SaaS has been a one-stop technology living up to the expectations of a versatile audience.

If we talk about the numbers, the SaaS market size has grown from $103 billion in 2020 to $123 billion in 2021. (Source: Statista)

SaaS is growing exponentially and emerging as a revenue-generating technology trend.

However, it can be complex at times to comprehend the concept of SaaS in order to develop your own product.

How do we get ahead in this direction?

This blog will walk you through everything you should know before developing a SaaS product.

Let us read.

What is SaaS?

To elaborate on SaaS, you need to recall the times when companies would deploy large local servers to run a Software application being used by its professionals in different peers. It was a complex, expensive, and time-consuming process.

So, how does SaaS differ from what used to be done before?

SaaS has made organizations independent of what are called local servers. The SaaS has replaced the utilization of local servers and transformed the delivery of services through the cloud.

A SaaS product can be a web or mobile application used by individuals or organizations to avail particular kind of services.

History of SaaS

When we say that SaaS is a modern-age Software delivery model, we do not mean that it has come into existence just a few years ago and you need to make haste before it becomes more competitive.

The roots of modern-age SaaS originated in the mid-90s when the internet was still evolving and trying to reach new heights of digitization through cloud computing and remote applications. It made leading organizations realize that there can be an alternative to highly complex and tough to deploy local server and software services that can also be available remotely using the internet.

In 1999, it became all real when Salesforce built the first-ever SaaS to provide a Customer Relationship Management (CRM) platform using the cloud to facilitate businesses remotely.

Why Should You Create a SaaS Product in 2021?

There are plenty of reasons why any aspiring business enthusiast should make a move to SaaS. From technological advancements to economic benefits, SaaS is a complete package of the needs of a 21st-century organization.

Not only SaaS is preferred for its rich-featured capabilities but also for increasing demands for remote infrastructure.

At a time when people would go to the banks to perform different banking operations, the advent of ATM machines was considered a revolution in banking. Soon, we got machines where people could not only withdraw but could also deposit their money.

Now, with the expansion of the internet over almost every single process, we have SaaS-based digital payment applications that have prompted a dramatic decrease in the number of people visiting banks.

Considering the aforementioned demonstration, we can say that developing a SaaS product has become a subject of need rather than a choice.

Whoever follows SaaS will be competitive and recognized in the market. So, if you want to remain a choice for your customers, you can create SaaS products for their needs.

What Are the Steps to Build a SaaS Product?


steps to build saas products

To transform your idea of creating a user-oriented and up-to-the-mark SaaS product, you would need a subtle plan of implementation. There can be a number of things to consider when you create business software for your customers.

Market Analysis

Before you make real investments from your end in anything, it is essential to do your research about the scope of opportunities and possible outcomes from the market you are stepping into. The same goes for SaaS product development. There are already thousands of customers using the SaaS model to serve their customers. The scope of SaaS is that dynamic that every second application being developed based on this phenomenon is unique in itself. We can say that SaaS is expanding the arena of enterprise mobility with innovation.

The only thing that is making one SaaS product getting ahead of another is the art of understanding what is available and what is left to be done.

Discuss Fundamental Requirements

SaaS products provide a complete package of features that empowers the business dynamics of any organization or individual using them. The most common and fundamental features of every SaaS product are security, multi-tenancy, multi-platform, and data protection. Before adding new features or functionalities to your product, it is essential to consider carving the fundamental structure thoroughly.

Thereafter, you can work on things like finding the identifiable features or USP of your products.

Plan Your Budget

To manage your finances before indulging in any particular investments, it is significantly important for everyone to streamline their budget to the different needs of the products. Even after developing the product, it would take more of your expenses to market, launch, and distribute the product.

Create a Clickable Prototype

To visualize and analyze the SaaS product better with the help of a prototype development company, it is highly considered to create a clickable prototype that would include different screens of the application. Designers can add buttons with different screens. It may provide a clear picture of how your idea of a SaaS product would look in reality.

Decide Your Pricing Model

Choosing the right pricing model helps your SaaS product boom your growth right from its launch. But, how do you get it right?

To finalize the pricing model for your product, you need to make sure that it presents value to the targeted audience. What every customer buying a product seeks is the best cost-to-value ratio. They would not want to invest their resources in something that would be kept idol most of the time or does not provide adequate features in an adequate value.

There are five ways to charge your customers while selling a SaaS product;

Usage Pricing

This pricing model works on the phenomenon of, the more you use, the more you are charged.

User-Count Pricing

In this pricing model, users are charged differently for different user counts such as $5 for a personal account, $20 for 10-20 users, $50 for 20-50 users, etc.

Tiered Pricing

In this pricing model, the product offerings company may segregate the pricing in different tiers such as personal, professional, and enterprise packages. For each tier, there would be features as per their scope of work and usage.

Flat-Rate Pricing

In this model, the product is offered with all of its features at a constant price for all users. There are no additional costs included. The reason due to which some people do not recommend this pricing model is, there can be times when some of the product’s features will never be in use by a particular audience.

Per-Feature Pricing

This pricing model works on the concept of pay for what you use. We can consider it an apt solution to the issue of idleness caused by flat-rate pricing.

Anyone can choose any pricing model. However, the rightest and most prolific approach is doing a parameterized research of your customers and make a call.

Choosing Technology Stack

An efficient and feature-packaged technology stack enables your SaaS products to remain scalable and sustain longer in the market. From programming languages to databases, every single unit of the product architecture will play a key role in establishing a strong foundation of your product’s presence in the market.

Let us explore how you can build the technology stack of your product.


To create the user interface of your product what users would interact with, you can use technologies like React, Angular, or Vue.js.


To add events to the frontend of your SaaS product, you would need to add a strong backend which you can create using programming languages like Ruby on Rails, Node.js, or Django.


You can choose a reliable, consistent, and easy-to-operate database for your versatile on the basis of different parameters such as PostgreSQL, MySQL, or NoSQL.


Once your product has been developed, you can avail the services of a cloud hosting provider where you can deploy your application online.

Develop an MVP

A large number of companies prefer creating a minimum viable product (MVP) so they analyze and scrutinize the initial performance of their development as per customer feedback. MVP Development is often considered a smart approach for building a product that meets the minimum but most fundamental needs of the customers and if things go well, you can scale up its capabilities.

Launch & Get Feedback

Launching a product is about making it available for the targeted audience. But, what if you do not get adequate engagement? Thus, the branding aspects should always be implemented while launching your SaaS product. If you have developed an MVP, you should put a particular emphasis on the feedback you get from your customers.

What Are the Cost-Driving Factors in SaaS Product Development?

So, how much money do you need to spend to develop a SaaS product? No, we cannot tell you the constant cost of creating a SaaS product as it is a lot more complex and fluctuating.

The cost of developing a Software product relies on several crucial factors like the following.

UX and UI Design

The user experience plays a dynamic role in promoting a pro-customer image of your SaaS product. The more interactive your interface is, the more engagement you will get with your application. To carve your product in such a way, you would need competent designing professionals who understand the expectations of your customers well and implement required prerequisites more efficiently.


The existence of SaaS is all about the dedicated space on the server. The choice of the right server will determine the sustainability, efficiency, effectiveness, and security of your product. Since the services of the product are availed through the server of the hosting provider, it has to be established considering the varying needs of the service provider which would let you save significant amounts of money.

Monitoring Software and App Maintenance

There are lots of post-development expenses for SaaS development companies. Since the entire service delivery model is conceptualized on the cloud, you have to monitor all errands. Serving your customers remotely using SaaS products can be complex at times. Monitoring and maintaining the product can be costly but it is always vital for the sustainable growth of your business.

Development and Tests

The resources you hire to develop and test can cost differently on the basis of project complexity, experience level, geographical location of the service provider, and technology stack. Thus, it becomes important to hire a team of professionals that understand your niche and objectives of the product so you can make the process worthwhile.

Types of SaaS Solutions

There are already a large number of SaaS products available in the market. Every product would have its own niche, usage, and objectives. However, there are some fundamental structures of every SaaS product through which it meets the requirements of its customers.

Let us comprehend the types of SaaS products.

Packaged Solutions

This type of SaaS solution focus on complex applications of similar niche such as supply chain management system, customer relationship management, human resource management, etc.

Collaborative Solutions

The purpose of these applications is to indulge the smooth and flawless operation of remote processes. Examples of such SaaS products include Google Docs, Google Drive, One Drive, YouTube, TeamViewer, etc.

Management and Enabling Tools

This type of SaaS product is designed and developed so it can be deployed on a designated network to track and monitor information. Examples of such SaaS products may include Google Analytics, Point of Sale software, etc.

The aforementioned types of SaaS solutions can include;

  1. Customer Relationship Management (CRM)
  2. Enterprise Resource Planning (ERP)
  3. Accounting Software
  4. Project Management Software
  5. Email Marketing Software

What Are the 5 Most Popular SaaS Products?

top 5 saas products

With the booming market, many SaaS products have emerged largely in recent years. From communication tools to cloud storage platforms, SaaS development companies have not left any stone unturned when it comes to meet the growing demands of customers seeking more and more remote solutions.

Let us highlight some of the most popular SaaS products that we use today.


Slack is an IRC-based communication platform used by organizations for indulging in internal usage. The tool consists of many capabilities to engage in smooth interaction between all peers of the organization. There can be public and private channels set up by businesses to allow professionals to send or receive workspace-related communications.

The daily user count of Slack crossed 12 million in September 2019. (BusinessWire)


Launched in 2007 by two students of the Massachusetts Institute of Technology, Dropbox has provided its users a centralized space on the cloud where they can store their files or any form of data to a specific folder and can share it in their network as well.

With a large user base of more than 700 million registered users, Dropbox earned $1.91 billion in 2020. (Backlinko)


Salesforce has received global recognition for being the first SaaS product. Its CRM platform has ruled the market of marketing automation for years. With a large-scale audience, the company has extended its arms to different Software industry domains i.e. mobile app development.

In the last 20 years, Salesforce has grown at a CAGR of 51.22%. (Backlinko)


Zoom is unarguably the world’s online video-conferencing application. In the times of COVID-19, there has been a dramatic surge in the userbase of Zoom and its popularity. From personal, organizational to governmental institutions, Zoom has found its audience in every group of communities. Subsequently, it has emerged as a premier SaaS product.

In the fourth quarter of 2021, Zoom’s revenue was recorded at $882 million. (Backlinko)

Office 365

Microsoft combined all of its utilities into a single product. You can download it to your computer and sign up or log in using your Microsoft account. Users may need to use the internet to upgrade their functionalities over a monthly period. Office Online is a free form of Office 365 which runs online. Office 365 has become a popular SaaS product being used as an advanced and multi-featured alternative to the conventional Microsoft Office.

The number of companies using Microsoft Office 365 in the United States of America as of June 2021 was 7,31,663. (Statista)

The market of SaaS products is continually growing and transforming. Such insight into a technological domain has led many to take interest in investing in SaaS product development.

Top 7 SaaS Trends in 2021

To get ahead in the ever-evolving market of SaaS products, you can not miss out on its trends. In the fundamental idea of business, following the trends does not only help you to become trending and competitive but also enhances your technological capabilities.

Artificial Intelligence for Business Needs

With the advent of virtual intelligence, SaaS has become more user-oriented and data-centered. It has paced the utilization of data to initiate volatile and non-volatile business operations.

Blockchain and SaaS

Blockchain is enabling organizations across the world to engage in immutable storage of data. It is contributing significantly to the technological transformation of business processes utilizing the amalgamation of Blockchain and SaaS with a Blockchain development company.

Vertical SaaS

To streamline the execution of end-goals, companies are utilizing vertical SaaS that focuses on a unidirectional niche of identical audiences. In general, it serves the purpose of a large audience expecting the SaaS product to meet their common requirements.

Digital Payment

It would repetitive to say that SaaS has touched almost every niche that is somewhere using digitized services. Payment services are one of the most common and popular examples of SaaS in practice. We can say that hyping the evolution of digital payments belongs largely to the rapid development of SaaS in recent years.

Open API

Public or open APIs are available for developers who can use or integrate them with external applications. SaaS developers can utilize an open API and implement the existing SaaS model as per the project requirements and integrate external code with ease.

A Remarkable Brand

SaaS has emerged as a progressive, advanced, capable, renowned, and credible technology. When you consider such a technological model to create your products, chances are more to attain positive results. Though, you may still take the help of a branding services company to do what they are good at.

Mobile-First Experience

Since most of the SaaS products are web-based, a mobile-first experience is more than a choice for any customer-oriented cloud development company. The mobile-first experience enables the product developers to meet the demands of a large audience that would use the SaaS product on mobile devices.

All the trends we have discussed in this section would certainly evolve but their fundamental purpose and existence would always empower the development of SaaS products.

Things to Consider While Building a SaaS Product

What should you do before creating a SaaS product? What should be the right approach? Developing a SaaS product can be more complex if you do not follow the below-mentioned procedures.

Let us have a look.

Begin With An MVP

Why do we want to develop an MVP before when we can also develop a complete product? The reason is, it reduces the risk. If you are asking an MVP development company to create a SaaS product for you, they would provide you a ready-to-use product that would contain the most fundamental features. You can launch it and receive feedback from your customers about its performance and user experience. It may provide you a subtle understanding of what your product can or can not deliver.

Know More About What Your Users Think

Before you make some real development, you must understand your users and their needs. Many SaaS product developers fail when they become overenthusiastic about implementing their plans and forget that any idea can become a bad idea if it does not match the thoughts and needs of customers.

Developing the SaaS Product With an Agile Approach

The agile approach of product development and management focuses on delivering more value to the customers in less span of time. You can develop your SaaS product using this methodology if you consider that bringing the core of your project needs terminology like Agile to be implemented. So, is Agile not a good choice for SaaS product development? No, agile is good. However, the implementation of agile is more about utilizing its best in your project.

Challenges of Developing a SaaS Product

SaaS software development is as complex as advantageous it is. SaaS is full of opportunities but there are many challenges that would always question the success of your product. You need to ensure that product does well on these crucial standards.


The more scalable your SaaS product is, the more it booms with time. Scalability provides the scope of success for your product by allowing an expansion of features.


With the growing essence of data, security becomes a more indispensable component of every SaaS product. If you consult a CRM and ERP development company to build a SaaS-based product, you must ensure that they implement fundamental security standards in the project.


While planning your product, you must devise the reliability factor. Overlooking the essence of reliability in any project will lead to unprecedented failure.


To make your product earn the money, you can include add-ons. Choice of pricing model can play a role in helping you to ideate a monetization plan as per your product’s features. If you do not indulge in a favorable monetization strategy, you may end up getting less of the financial advantages of the product.

Advantages of SaaS Application Development

The development of SaaS applications has facilitated both product developers and customers across the domain.

The process has come up with some crucial business-oriented advantages as the following.

Speed of Development

Several elements of the SaaS product can be pre-installed or configured which leads to a simpler and faster development of code.


Because of its unconventional approach to product development and delivery, it does not indulge in many crucial challenges that would exist in Software development before. With a simpler process, the cost of SaaS development has been more affordable.

Third-Party Support & Scalability

SaaS products are popular for their scalability and features. We can say that the most particular capability of any SaaS product is its scalability and support it receives from third-party applications.

Easy Implementation

With application-oriented proof-of-concept and functionalities, the implementation of SaaS products becomes comparatively easier than traditional Software products.

How Can You Migrate Your Existing App to a SaaS Model?


How Can You Migrate Your Existing App to a SaaS Model?

A large number of companies have migrated their products developed on the on-premise architecture to SaaS product architecture.

Here’s how you can do it.

Analyze The Environment Compatibility

The first step is to identify environments, infrastructure, and other crucial resources such as storage, analytics, data generated, networking, and expected SLA that are compatible with the product being developed.

Choosing The Type of Cloud Server

The subsequent step is to choose the type of server you want to deploy your product on. You can go for public, private, or hybrid servers as per the project requirements. For migrating a pre-built, it is recommended to choose the hybrid server that is considered efficient to deal with large workloads and complex issues related to product proficiency.

Get a Cloud Service Provider

Once you have finalized the type of server you want your product to be deployed on, it is time to choose a capable cloud provider. There are several factors to be considered before you make a move to select your cloud provider that includes computing strength, storage capability, etc.

Make Product Ready for a Smooth Migration

It is important to ensure a smooth migration and escape any process complexities that may hamper the product migration from an on-premise data center.


Cloud migration is a process that should be smooth, gradual, and result-oriented. The migration of data has to be seamless and compatible with the existing server.

Implementing Required Alterations in Code

Refactoring the code is a crucial post-migration process that ensures compatibility and resource independence.

Migrating the Data

In the next step, we migrate your data to the refactored product deployed on a new server version.

Remove Existing Database

In the next step, you need to replace the existing on-premise database with a cloud-based database. The process would upgrade the cloud database version assuring the implementation of more advanced capabilities.

How Can Sparx IT Solutions Help You in SaaS Development?

Sparx IT Solutions is an ISO 9001: 2008 SaaS development company that has been developing SaaS products for more than 14 years now. The company has a dedicated team of SaaS product developers that are using the latest trends and technologies in the market.

You can consult our experts to create a brand new SaaS product or migrate a pre-built product to the SaaS model. To make your SaaS product successful, the company helps you with interactive branding services, as well.


If we have to summarize the story of SaaS, we can say that it has taken the trend of remote technology solutions to the next level. The objective of this guide was to help our readers get a complete insight into what SaaS is, how does it work, and how one can take advantage in growing their business. Software and service delivery tend to evolve further with the technological expansion of the market and SaaS is going to play a definite and constructive role in its availability to a larger audience.

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