SaaS Application Development – What Is SaaS & How To Kickstart Your SaaS Journey?

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SaaS Application development
November 26, 2020 | 12 min read

Unless you are living under the rocks, it’s hard not to notice that software-as-a-service (SaaS) is one of the most popular business models in the world today.

Although SaaS applications have been around for a while now, entrepreneurs or business owners still have many questions on whether these apps are a viable option for them. Being a custom software development company, we are eager to share our expertise in custom SaaS development.

Read the article as we explain what SaaS is, why businesses are moving to the cloud, and how your business can benefit from SaaS. Then, we’ll look at the top SaaS companies that have been successful using this approach, different types of SaaS solutions, and lastly, how Scalex can help you build one. 

What is SaaS – Understanding Software as a Service 

Software as a Service, also known as SaaS, is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the internet. Using such a service, customers don’t need to install and configure the applications since the software provider handles them.

In the software on-demand SaaS model, the provider gives customers network-based access to a single copy of an application created specifically for SaaS distribution. The application’s source code is the same for all customers, and when new features or functionalities are rolled out, they are available for all customers. Depending upon the service level agreement (SLA), the customer’s data for each model may be stored locally or in the cloud, or both. Organizations can also integrate SaaS applications with other software using application programming interfaces (APIs).

SaaS has become one of the well-known applications in the world of cloud computing. Over the last decade, SaaS has been replacing traditional on-premises licensed software for customers ranging from small shops to multinational tech giants. By empowering organizations to host and license their software application from the cloud server, SaaS application development has become a go-to solution these days.

Why SaaS – Reasons to prefer SaaS for your business

The value and need for SaaS products have evolved and grown tremendously over the years, and we can see the trend continue for years to come. 

The continued shift from traditional on-premises license software to subscription-based SaaS models, with the increased need for new software collaboration tools during COVID-19, is driving SaaS growth. As a result, software as a service remains the largest market segment and is forecast to grow to $104.7 billion in 2020. It comes from the fact that nearly all software market segments are being driven by SaaS implementation.

As stated in Statista, the global public cloud software as a service (SaaS) market is forecast to reach 157 billion U.S. dollars in size in 2020, more than doubling the market size in 2014.

SaaS MarketCompanies using Cloud-based apps with the SaaS business model are increasing in number, the reason being it is based on the subscription model and has numerous benefits. Age-old business applications are now going out of the present IT plans of many businesses. The ability of fast deployment with lower investment risk has made business owners choose SaaS solutions over other traditional choices. 

Today, most businesses across the globe are struggling to sustain themselves in the market while managing the workforce due to the coronavirus pandemic. Such transformation has posed a big question in front of the organizations – “How to manage the IT infrastructure while everyone is working remotely?” 

The answer is simple – SaaS development. The increased need for collaboration software during the COVID-19 pandemic has driven further growth of the SaaS market. The effects of the global economic downturn are intensifying organizations’ urgency to move from legacy infrastructure operating models.

Modern SaaS technology trends allow building platforms that can connect apps, integrate the internet of things (IoT) solutions, and analyze big data. IoT and big data are considered to be the most popular technology trends. That is why learning how to build a SaaS product is a highly worthwhile investment.

Advantages of SaaS

SaaS solutions have a high potential for improving the business. Below we’ve singled out a few core advantages of a SaaS architecture for users and developers.

No hardware and maintenance – The most significant advantage of SaaS software distribution over traditional software delivery methods is that it saves organizations from heavily investing in hardware and installing, configuring, and running apps locally. Organizations also don’t have to worry about maintenance, support, and licensing stuff. The apps are ready to use as soon as a subscription is confirmed, translating into quick deployment and rapid prototyping.

Scalability and Flexibility – The main advantage of SaaS applications is adding capacity. SaaS apps are highly scalable, allowing businesses to access more features and services as they grow. Businesses can subscribe to a SaaS offering and pay-as-they-go, while in most cases, they can handpick the features and only pay for the required features.

Cost efficiency – Unlike on-premise solutions offering a license for an upfront cost, the SaaS model has different subscription plans. There is no need to buy and maintain expensive hardware using a SaaS service. It’s common for SaaS solutions to offer paid subscriptions. So, the company pays for the required functionality and can stop paying if the business doesn’t need the service.

Compatibility and Accessibility – SaaS solutions can be accessed through a web browser on almost any device, which results in excellent cross-platform compatibility. This allows users to access information anywhere, even using their mobile devices, boosting productivity and efficiency.

Security – The SaaS vendor’s livelihood depends on data security, so it is only natural that safeguarding the app is paramount. SaaS providers usually have their servers scattered in multiple geographical locations and have automatic backups, ensuring a higher level of security than your enterprise itself would be able to provide. According to Gartner, 95% of cloud security failures are due to human error. The cloud is secure, and your data is safe. 

Automatic updates – Since everything is hosted in the cloud, there are no local updates, and the service provider is responsible for the automated deployment of updates. Because the SaaS provider manages all updates and upgrades, there is no wait time for new features and enhancements, and are delivered as soon as they’re ready. This saves businesses from the hassle of testing updates before deploying them.

App Integration – SaaS applications can be integrated with other platforms and systems using APIs. This allows organizations to integrate their systems with the SaaS provider using their APIs. Businesses can choose the offerings of SaaS providers that have better integration with other systems and leverage their existing IT investment.

Stability and Predictability – SaaS application development is a promising scenario for startups. A SaaS company can expect to attract a considerable customer base with reasonable up-front fees and then rely on a fairly stable and lasting source of revenue.

Higher Customer Lifetime Value – It’s much easier to offer upgrades and expanded services mix to users of your SaaS products. So you can scale SaaS applications quickly and boost your revenues.

No Piracy – Since it’s not very easy to pirate cloud-based software, SaaS helps companies reduce the piracy of their software.

SaaS products provide an excellent solution with remarkable benefits to businesses struggling with traditional and inefficient in-house systems. Because of said benefits, SaaS is a rapidly expanding niche. Many entrepreneurs and developers are getting into the realm of SaaS Application Development to help enterprises solve their issues.

Top SaaS Providers in the Market

After analyzing several ranking reports of the top SaaS companies globally, we have listed the top 5 SaaS providers to give you an idea of what these organizations look like. We’ve curated a list of the strongest, fastest-growing, and biggest SaaS companies in the world.

Google
Google is more than just a search engine. G Suite and Google Analytics are the most potent business collaboration tools in the market today. Anyone with a Google account can use these services for free. However, more than 4 million businesses are paying for additional features that include unlimited cloud storage and 24/7 phone support. 

Microsoft
Microsoft owns over 100 different cloud products used in a variety of different software. It also offers Dynamics CRM, SharePoint collaboration, and even SQL Server databases on demand.

Slack
Slack is a collaboration and chat tool that allows internal messaging, video conferencing, and productivity bots. Slack has witnessed one of the most explosive growths in the history of SaaS businesses. There are more than 1500 apps in their directory.

Adobe
Adobe is a pioneer among product-based SaaS companies. With 20+ desktop and mobile apps, it facilitates various features like design, video editing, web development, photography, and more for around 15 million subscribers.

MailChimp
MailChimp is a marketing software company that owns three major products. Its main product – MailChimp, is an email marketing platform that allows you to schedule automated emails and track their results.

Among other most prominent examples of SaaS providers are – Salesforce, Oracle, Amazon, IBM, and HubSpot.

How to Kickstart your SaaS Journey?

Setting up a SaaS company requires a tailored approach to ensure seamless integration and rapid installation for customers’ systems. Building a SaaS application necessitates a strong product focus and lower implementation costs to provide the customer with a better deployment experience.

The stages of a SaaS business

For every SaaS business, there are three primary stages – Setup, Growth, and Stabilization. 

Stages of saas developmentSetup – The setup stage is where companies build a foundation. This is where you’ll be working on the product and marketing it to new customers. Setup is also an ideal time to identify your target audience, create an effective marketing and sales strategy, and consider your options for customer support.

Growth – This stage implies data expansion, bandwidth, and all sorts of technicalities to support users’ accounts. After your product reaches the market, you may experience a great deal of growth. New customers will quickly adopt your product, creating a sudden demand for your marketing, sales, and customer service teams. Your business will need to act quickly to capitalize on this timely opportunity to secure a loyal customer base. An inability to successfully handle growth is where many SaaS companies fail.

Stabilization – This is the stage where your SaaS business model levels out. You make a healthy profit, acquire new users quickly, and experience churn. That’s because you have wisely reinvested in customer service software, marketing automation, and product updates. This level helps you keep pace with customers’ demands and offer a delightful user experience.

Factors you should consider when adopting a SaaS solution

While there are many considerations when choosing to deploy a SaaS model, the following perhaps are the most critical factors you’ll need to consider.

Market Research 

Market research is critical to your SaaS product’s success. It helps you learn more about how your customers think, their purchasing patterns, software proficiency, and more. Market research is also an excellent way to monitor your competitors so that you can maintain a competitive advantage. 

Budget

Business owners must strive to build a holistic solution that caters to the requirements of various departments. Financial considerations come first and foremost. You need to define your product and development costs. 

Technical Specifications

This is where you need to determine how your software will be built. Not every technology and programming language will be the right fit for your SaaS product. Having the right framework for your SaaS product is crucial. It would be best to make sure that you build your SaaS product on top of scalable software architecture, so you can upgrade the product without wasting too much of your team’s time and resources.

Define the MVP

Defining a Minimum Viable Product (MVP) means figuring out the basic core features that will bring value to your customers with minimal costs from your side. An easy way to define the MVP is to answer questions like what problem you are solving, your target user’s persona, what actions users take to solve their problems, and what solutions you can propose.

Security and Performance

While building a SaaS model, it is crucial to ensure maximum security as it is the foundation of a good solution. Consumers’ requirements are constantly evolving, so you should adjust to them. Your software should be built to handle the increasing number of users without slowing down.

There are many factors to consider when choosing a deployment method, and every situation is unique. We hope the above points offer some aspects to consider during your software development cycle and help guide your decision to make the best choice to realize your business objectives. 

Whether you’re building a SaaS product for your niche or the masses, you need a talented development studio specialized in this field. It’s a challenging field because not everyone can build you a user-friendly SaaS product. 

Scalex expertise in building SaaS products 

Scalex has 5+ years of experience in building high-quality SaaS solutions. We have prowess in building software as a service. From the initial stages of planning and implementing to creating a software product, we can do everything. We pay great attention to the business component of each product because a product without users leads to an unrewarding expense of the founder. 

If you have an innovative SaaS idea, bring it to our development team at Scalex. We have a group of first-rate pros with years of experience in SaaS development. We will collaborate with you through the entire SaaS lifecycle and produce what you envision. In the end, you will have world-class software to take to the marketplace. Schedule a free 30-minute consultation call now with our technology experts to discuss your idea.SaaS services

Conclusion

The SaaS industry has gained immense popularity because of the convenience it offers to users. The market for SaaS applications is emerging rapidly; therefore, it is now the time to come out with a unique application idea. Along with the higher demand and competition, you also need to be aware of the dynamics of the SaaS industry and work relentlessly to differentiate your business by offering unparalleled solutions and tremendous value.

As SaaS is a highly profitable business area, the question of how to create software as a service that could overcome the competitive challenge and stay reliable is rising on the agenda. Once you have decided you are going to build a SaaS product, it is imperative to carefully study every aspect involved in transforming your idea into a tangible product. In our next series of SaaS articles, we will provide you with a step-by-step guide on building a SaaS product and the essential considerations involved. Stay tuned!

About the Author

A Digital Marketer at Scalex, Nikita is devoted to her motto - to write simply and clearly about complicated things. Backed up with 6+ years of experience in marketing, she creates informative but exciting articles on technologies.

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