How to Build a Standard SaaS Application

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Recently, software applications that we all know and love have been switching to a SaaS model, and new apps have been joining the scene from just about every industry. You might be asking yourself, what is SaaS anyway? SaaS is an acronym for Software as a Service, which is essentially a way to provide the programs we use to execute tasks remotely (not stored on the local device) through a browser. It is seen ‘as a service’ because the software is typically provided, maintained and updated as part of the package. Robust customer support is often a large part of the deal as well.

If you happen to be a long time user of the Adobe suite of creative software, Oracle, or what was once Google SketchUp (now Trimble SketchUp), you will have noticed in recent years that the service model has changed. Previously, you would pay for and download a one-time version of the program, complete the installation on your device or local company server and then have access to that specific version for as long as you needed, until newer versions with enhanced features came along that made the previous one obsolete. At this point you would have to buy and download the new version, delete the old and repeat the process. This has all changed with SaaS. If you’ve tried purchasing an Adobe Creative Cloud license recently, you will have been given the options of various subscription packages, as opposed to a download. By signing up for a month or year of access, you are able to log in to your account through a browser application and use all key features of the program to complete your projects. When any updates are made to the software, they are pushed directly through to the platform you’re using. No need to renew or download anything else as long as your subscription is active.

There are two main categories that SaaS programs can fall under. These are Traditional and White-Label SaaS applications. Traditional is the most common, exemplified by apps such as Google’s G-Suite programs and Adobe Creative Cloud. These all serve a specific purpose determined by the creator and are branded with their labelling — you always know it’s an Adobe or Google product that you’re using.

With white-label apps, the application serves a specific purpose, but can be adapted to suit the user’s needs and branded accordingly. The creator has no visible claim to the product, hence the idea of a ‘white’ label. This is often seen in custom-built website apps, where the final product has no trace of creator branding and can appear as if it was fully developed for and by the user.

Why Would You Want to Create a SaaS App?

In comparison to standard software applications, a SaaS model can provide lots of benefits for both the creator and the end user. It is important to note that not every software product will make sense as a SaaS application. With whatever you endeavour to create, the first step will be to define the use case, validate the market and decide what platform is best. As a rule of thumb, extremely niche markets or those where customers are unlikely to repeatedly and consistently use the software (enough to validate purchase of a subscription) do not lend themselves to a SaaS model. It is also helpful to do an analysis of the competition to identify what they may be doing that customers enjoy, or what key needs they’re missing out on. What gaps exist that your software can fill? Understanding the benefits SaaS can bring may also help you better decide if it is right for your project.

Some of the reasons developers tend to like creating software as a service are as follows:

• It is relatively easy to release a product and continually release updates
• Since the cost of subscribing as opposed to purchasing a perpetual license is quite low, attracting a larger customer base is easier.
• Once customers are retained (back to the importance of ensuring SaaS is right for your market), there is a continuous stream of revenue from repeat subscribers.
• Source code is more secure with this model

On the front end, there are tons of benefits for users as well:

• No need for excessive storage space for a bulky program on the local device.
• The program and saved work can be accessed from any device and any location.
• SaaS is easily scalable for companies, as there’s no need to purchase additional spots or install the program on new devices. New users simply need a login and to be added to your team or project.
• In-house maintenance and support are not needed as customer service is provided by the product team.
• Data sharing between users is made easy.
• No long term cost commitment. If the user no longer needs the program, they can simply cease renewal of the subscription.
• Many SaaS products allow a brief trial period where new users can test the software for free before committing to a purchase.
• Cloud storage of data means greater security.

How Do You Build a SaaS Application?

Once (and only after) you have done the research and decided that a SaaS application would be best for your audience, actually building the app can be done in just a few guided steps.

1. Choose a technology stack for your project.

A technology stack is the structure on which all software is developed. It comprises four main tools as listed below. In order to select the most appropriate stack, you will want to consider the size of your product and your specific capabilities.

• Frontend Development — typically HTML, CSS and a JavaScript framework (React, Vue, Angular)
• Server-side Development — PHP, JavaScript (Node.js) or Ruby on Rails
• Backend Data Storage — generally uses a relational database: MySQL or PostgreSQL
• Application Server — Apache and Nginx are most commonly used

1. Select and define your pricing model.

There are four main ways that cost can be derived with a SaaS product. Each has its own best use cases depending on the project.

• Freemium — in this model, the majority of the audience is brought in through attraction to a free version of the product that offers all the core features. The more dedicated users are then encouraged to upgrade their subscription to encompass more premium services for a one-time or monthly fee. Dropbox is an example of this, where the standard service is free but you have to pay for additional storage space beyond a set limit.
• Transaction/Selling fees — this is a commission-based model where the owner receives a cut of any money made by users through the platform. A good use case for this would be an e-learning software that allows users to create and monetize virtual courses. The software creator would be eligible to receive a portion of all fees paid to access courses.
• In-App Advertising — we may be most familiar with this model as there seems to be advertisements built into every program we use these days. Access to the app is free, but users will occasionally or continuously view ads or videos for different products and services. The app creator is paid by the marketers for ad clicks and views. This can be seen on the free versions of apps like Spotify.
• Subscription — this model may be the one most thought of in relation to SaaS programs. A subscription model gives users the option of signing up for a monthly, quarterly or yearly subscription after a brief trial. As discussed previously in this article, Adobe Creative Cloud is a prime example of this pricing model.

1. Develop an MVP

In any business pursuit, creating a minimum viable product before diving into the full thing is a smart idea, but in software development it can truly be the difference between a successful launch and a failed idea. Creating an MVP allows potential users to test the software before a full release and provide feedback on its functionality and viability for their needs. This gives you important information and the time to implement changes before your product launch.

1. Market the product and analyze its use.

Once your software is ready for general consumption, be sure to get it at the front and centre of your target audience. The first few months will be critical to track user data and closely monitor support requests. Hopefully the major bugs were all handled during the MVP phase, but as noted before, this type of software will require service and support and your users will come to expect feature updates over time. By better understanding how customers are using the program, you will be able to develop new features that they can appreciate.

How Much Will it Cost?

If you’re going the route of building a SaaS application on your own, good for you! The information in this article up to this point should have given you a pretty clear understanding of how to go about the process. Do keep in mind that developing a SaaS tool is not a one-time job. There will need to be continuous upgrading and maintenance to keep users happy and engaged.

If you’ve decided that building an app isn’t your forte, but you would like to have one developed for your business, cost output will be an important item to consider. Unfortunately, the cost of software development is never a straightforward calculation, as there are so many variables that can apply. Developers in different regions of the world often charge vastly different rates, with North America being on the highest end (estimated up to $180 per hour), Asia and South America coming up on the low end between $15 and $45 per hour and Europe covering the middle ground with a range from $40 to $75 per hour in the East, up to $90-$120 per hour in the West and North.

The time it takes to develop your app will depend on the size of the app, the number of integrations it needs to support, what features it includes and, of course, the experience of the developer. It is important to go through all the steps laid out in this article and discuss these items clearly with potential developers before embarking on the project to ensure alignment and gauge the time and cost requirements. You may even be able to adjust your expectations based on your allowable budget.

Regardless of how you go about it, SaaS has proven to be a strong and swiftly growing contender in the software product arena. That makes it a smart business move for any product developer or service company on the market to engage repeat customers in a mutually beneficial way. The time to start developing your idea is now.