How to Build a SaaS Product: Everything You Need to Know (and Do)

The SaaS market is growing rapidly. As companies accelerate digital transformation and shift to leaner, cloud-first operations, SaaS has become the default model for delivering scalable, cost-effective software. By 2032, it’s expected to exceed one trillion U.S. dollars, with the annual growth rate rising from 18% to 20%.

More and more companies are opting for the SaaS model due to its cost-cutting benefits, improved scalability, and enhanced security. So, if you’re curious about how to build a SaaS product, this article is here to help.

In this guide, you’ll learn how to turn your SaaS idea into a scalable, profitable product. We’ll cover:

• The key advantages of SaaS over traditional software, and why now is the time to build
• The main types of SaaS products and which models align with your business goals
• The essential steps to building a stable SaaS product, from concept validation to launch
• Key factors in SaaS application development, including tech stack selection and team structure
• How to estimate and manage SaaS costs to stay on budget and maximize ROI

Let’s begin with the definition of the SaaS model.

What is a SaaS product?

Software as a service (SaaS) is a model where software applications are hosted on the Internet rather than on an organization’s in-house servers. Users typically pay a regular subscription fee to access a SaaS software product through a web browser or a dedicated application.

This approach offers several advantages over traditional on-premise software. The primary benefit is that users can access the application from any device with an internet connection without needing to install anything. They can also start or stop using the product at their convenience simply by canceling their subscription.

From a business standpoint, SaaS application development brings significant cost savings by eliminating the requirement to establish IT infrastructure. Moreover, it simplifies software updates, allowing developers to work on improvements without disrupting users. This ensures uninterrupted software usage and no loss of revenue during the update process.

Many modern products are built using SaaS application development platforms, which provide the tools and cloud infrastructure needed to create SaaS apps with minimal overhead.

How does SaaS work?

Software as a Service delivers software over the Internet instead of installing it on individual computers. The software runs on powerful cloud servers, such as AWS, Azure, or Google Cloud, and users access it through a web browser or app. This setup makes it easier for both users and providers to update, scale, and manage software.

Many of these solutions are created using a SaaS application development platform, which helps teams build SaaS apps quickly and efficiently.

Behind the scenes, SaaS companies usually choose one of two ways to build their software: multi-tenant or single-tenant architecture.

Multi-tenant architecture

In a multi-tenant system, many customers share one version of the software. Everyone uses the same app, but their data is kept private and separate. This model is cost-effective and easy to manage. It allows updates and new features to reach all users at once.

Ultimately, multi-tenant architecture allows for fast scaling while keeping costs low, which is why it’s often chosen by startups and fast-growing apps.

Single-tenant architecture

In a single-tenant system, each customer gets their own version of the software and their own database. This offers more control, stronger data security, and easier customizations, but it costs more to run and maintain.

Therefore, companies with special requirements, like strict compliance or enhanced data security, often choose single-tenant architecture.

Benefits of SaaS development

• Recurring income: SaaS products offer a steady income stream thanks to their subscription-based model. This makes it easier for businesses to plan ahead and invest in growth.
• Low initial costs: SaaS development eliminates the need for hefty investments in hardware and software infrastructure. This simplifies the adoption of SaaS products for customers and reduces entry barriers.
• Scalability on demand: SaaS can easily scale to accommodate a growing user base without requiring significant infrastructure investments. This is especially beneficial for startups and expanding businesses.
• Global customer reach: SaaS software is accessible from anywhere with an internet connection. This allows businesses to reach a broader market.
• Automatic updates: SaaS providers roll out updates and improvements to all users. This ensures your product always stays up-to-date with the latest features, security fixes, and bug repairs without the need for manual updates.
• Security: SaaS products benefit from centrally controlled hosting and regular security updates, reducing the risks of piracy and hacking. Additionally, subscription-based access discourages unauthorized copying since it doesn’t grant access to the product.

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Benefits of SaaS development

Recurring income

SaaS products generate predictable, recurring revenue through subscription pricing models. This consistent cash flow supports better financial planning and long-term growth. It also improves business valuation, making SaaS especially attractive to investors and founders seeking reliable income without relying on one-time software sales.

Low initial costs

SaaS application development reduces upfront costs by eliminating the need for physical infrastructure or software licenses. Customers can start using the product with minimal investment, which lowers barriers to entry and speeds up adoption. For businesses, this means faster go-to-market times and improved accessibility for a wider audience.

Scalability on demand

With SaaS, scaling is simple. Cloud infrastructure allows your app to grow seamlessly as user demand increases—there is no need to rework servers or hardware. This makes SaaS ideal for startups and fast-growing businesses that need flexible resources without large infrastructure expenses.

Global customer reach

SaaS apps are internet-based, allowing users to access them from anywhere in the world. This global reach opens up new markets without the need for physical distribution, making it easier for companies to expand internationally and support a worldwide customer base.

Automatic updates

SaaS platforms allow providers to deliver updates, new features, and security patches automatically to all users. This reduces maintenance for customers and ensures that everyone is running the latest version, minimizing bugs and vulnerabilities without requiring manual installs or IT involvement.

Security

SaaS products are centrally managed, making it easier to enforce strict security standards, monitor threats, and apply updates quickly. Access is typically tied to user accounts rather than software copies, which helps prevent piracy and unauthorized distribution, especially important for protecting intellectual property and user data.

Types of SaaS applications 

To understand how to build a SaaS product that resonates with your target audience, explore the main types of software-as-a-service on the market.

• Customer relationship management software, or CRM for short. These SaaS apps for businesses help build customer connections and improve their marketing strategies. A famous example is Hubspot.
• Content management system (CMS) SaaS offers content management and publishing capabilities. WordPress.com is a prominent example of a CMS SaaS.
• Enterprise resource planning software or ERP. These complex solutions help big enterprises manage different business processes, including manufacturing, commerce, reporting, sales, supply chain, human resources, etc. The most well-known examples include Oracle Netsuite, Microsoft Dynamics 365, and SAP Business One.
• Accounting solutions. They simplify and automate accounting and financial processes in your organization, often including billing and invoicing. Zoho is one of the first SaaS billing tools that come to mind.
• Project management software. Trello and Jira are examples of solutions that assist businesses in managing workflow and engaging with team members in a shared workspace by dealing with task assignments, resource allocation, and project tracking.
• Vertical SaaS tools. These solutions are created for a particular industry. Alternatively, they can be designed to optimize specific business processes. We should also mention Veeva for pharmaceutical management, BioIQ for MedTech, or Guidewire for insurance.
• E-commerce software solutions. Online retailers need such products to manage products, inventory, shipping, and taxation. The most popular e-commerce software products are BigCommerce and Shopify.
• SaaS marketing tools. These instruments are used to help organizations execute their marketing strategies and campaigns and track the success of their business. They include analytics tools (Google Analytics), social media management platforms (HootSuite), SEO toolkits (SEMrush), etc.
• SaaS tools for remote collaboration. This SaaS product type embraces different kinds of solutions, such as cloud storage and file-sharing applications (Google Drive), time-tracking tools (Harvest), online chats (Slack), and video conferencing instruments (Google Hangouts).

Common SaaS use cases

Customer support & self-service portals

SaaS is ideal for support platforms because it allows businesses to scale service without expanding headcount. Centralized updates, integrations, and real-time access let teams manage tickets, chats, and knowledge bases from anywhere. Behind the scenes, robust APIs power these connections, enabling seamless data flow across systems. 

Explore how Syndicode builds custom APIs to support scalable, user-friendly support solutions.

B2B workflow automation

SaaS platforms streamline internal processes like HR onboarding, procurement approvals, or compliance tracking. With cloud access, built-in permissions, and real-time data, businesses can automate manual workflows, reduce errors, and increase transparency.

These kinds of internal tools are a core focus of Syndicode’s enterprise software development services, designed to meet the needs of growing and complex organizations.

Inventory & Order Management

For growing e-commerce businesses, SaaS inventory tools sync stock levels, automate reordering, and connect sales channels—all without local infrastructure. Real-time data access and centralized control reduce fulfillment errors and stockouts. The SaaS model allows continuous updates, scalability, and integrations with third-party platforms like Shopify, Amazon, and shipping providers. 

These capabilities align closely with Syndicode’s online marketplace development services, built to support scalable, high-performance commerce operations.

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How to build a SaaS product: Main steps

Now, let’s look at specific actions you should take if you wonder how to build a SaaS product for your business.

1. Confirm your idea’s viability
2. Create a concept and plan the product
3. Develop a business plan
4. Define requirements for building the SaaS platform
5. Select a technology stack
6. Assemble a SaaS development team
7. Build a SaaS app and perform after-launch maintenance

Validating an idea for a cloud-based product is crucial to ensure you build something that meets real needs and has a potential market. This way, you avoid investing time and money in something that no one will buy.

Here are the main steps to properly validate your idea:

1. Research the market. Get an industry overview to gauge the demand for similar products and identify your competitors. Analyze your findings to uncover the latest SaaS application development trends and identify any gaps or areas in the market that your SaaS product can address.
2. Identify the target audience. Determine who your product will serve precisely and outline their pain points, needs, and preferences. Conduct interviews and surveys to determine if the problem you intend to solve with your product is indeed a real pain point.
3. Evaluate the existing products in the market and assess their strengths and weaknesses. This will help you define your unique value proposition (UVP) and strategize how to create a SaaS product that can disrupt your specific domain.

After completing these steps, you can start shaping your product concept, which will serve as a blueprint for development, marketing, and execution. It should include the following components:

• Problem statement: a brief description of the problem the product addresses and how it solves it.
• Value proposition: an outline of your SaaS product’s unique benefits and value.
• Target market description: details about your target audience, including demographics, job titles, industries, and any other relevant information.

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“Don’t find customers for your products; find products for your customers.”

Seth Godin, entrepreneur, author, and speaker

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Step 2. Select features of the SaaS product

To excel in the SaaS business, it’s essential that you provide users with features that set your solution apart from similar products. Before diving into SaaS application development, conduct a competitive analysis to define the functionality customers want, increasing your chances of becoming an industry leader. 

Here’s how you can identify and prioritize features:

• Identify your business goals;
• Identify user needs;
• Write opportunity statements;
• Brainstorm feature ideas;
• Prioritize features.

To prioritize features effectively, consider customer needs, impact on the core value proposition, and feasibility. We recommend listing all the features you’d like to include in your product and then using the MoSCoW, RICE, or Kano model to identify critical, performance, and delighter features. Focus on delivering the most value early in the SaaS development process.

That said, the essential functionality depends on the type of SaaS app you are developing. However, there are common must-have features, which include:

• User authentication
• Data security (e.g., a password policy, data masking, access controls, etc.)
• Intuitive user interface (e.g., quick actions, mobile gestures, etc.)
• Customer support (e.g., knowledge base, chatbot, in-app messaging, etc.)

To start, prioritize delivering the core functionality to create version 1.0 of your product. This will allow you to test the feasibility of your business idea and determine how to build a SaaS application efficiently and cost-effectively. 

Step 3. Choose a monetization model

Picking the right pricing model can be tricky. As you build a SaaS product, you’ll want to offer real value while keeping your product competitive and your business sustainable.

Here are some of the most popular pricing models to consider:

• Per-user pricing. This model is typical for team-based products such as CRMs, project management tools, etc. It implies charging customers based on the number of employees using the solution.
• Tiered pricing. If your cloud solution has more than one use, you can offer several packages with different features at different prices. This way, you can grow your revenue by providing your product to multiple buyer personas. Besides, the model enables customers to choose the most appropriate solution.
• Per storage pricing. This model is pretty simple. Customers pay the cost based on the amount of storage they need. You may offer a certain amount of storage for free and paid packages for customers who have reached their limit.
• Feature-based pricing. With this model, the features available for customers define the price of your cloud-based application. This option gives them clear motivation to upgrade their packages. This way, they get access to the additional functionality they need.
• Pay as you go. Here the price for your product varies based on the frequency of its usage. The more sought-after the SaaS product is, the higher your revenue will be.
• Subscription. It is the most transparent model. You offer only one product with specific features for a certain price.
• Freemium. With this model, customers get some functionality for free. At the same time, advanced features are available in paid packages.
• Ads-supported pricing. This pricing model is similar to the previous one. However, you get revenue from advertisements rather than paid features.

Helpful metrics

If you want to know how to create a SaaS application that will help you grow your cloud business, keep in mind two metrics defining the success of your SaaS business. These are customer acquisition cost (CAC) and customer lifetime value (CLV). 

To grow your business, you should keep CLV higher than CAC. With proper pricing, CAC will get lower owing to better positioning. On the contrary, lifetime value is increased due to better customer retention.

Step 4. Choose the right technology stack

Picking the right tech early on makes it way easier to figure out how to build a SaaS product, handle growth, and keep things running smoothly as your user base expands.

At Syndicode, we prioritize the project discovery process. This involves carefully selecting the technologies that enable the SaaS application development team to create a dependable, scalable, and secure solution within the shortest possible time frame.

Here are some of the go-to web development technologies we use for modern SaaS product development:

• Back-end technologies include programming languages, frameworks, libraries, and other tools required to build a SaaS app’s server side. Tools like Node.js, Django, and Ruby on Rails are great picks for fast, flexible SaaS development.
• Front-end refers to buttons, menus, links, graphics, and other web page elements users interact with. Syndicode uses advanced technologies like Angular.js, React.js, and Vue.js in SaaS application development.
• Databases. PostgreSQL is the primary data store for all cloud-based solutions we deliver. We also use MySQL and Redis, an in-memory data structure store.
• Hosting and infrastructure. Speaking about the cloud hosting providers, we opt for Amazon Web Services (AWS). In addition, Digital Ocean allows our software developers to deploy and scale software-as-a-service applications that run simultaneously on many devices. Among other services, our SaaS developers use Azure, Heroku, and GCP.
• SaaS mobile app development uses Swift and Objective-C for iOS, Java or Kotlin for Android, and Flutter or React Native if you want to go cross-platform.

Tech stack	Strengths	Weaknesses
LAMP (Linux, Apache, MySQL, PHP/Python/Perl)	Well-established and widely used; Cost-effective, with many open-source tools available; Good for content-heavy applications	Isn’t as scalable as newer stacks; Performance can be a concern for high-demand applications
MEAN (MongoDB, Express.js, Angular, Node.js)	Simplified development due to full-stack JavaScript; Scalable and efficient for real-time applications; Popular for dynamic web apps	Not ideal for CPU-bound tasks
MERN (MongoDB, Express.js, React, Node.js)	Excellent for single-page applications (SPAs); Simplified development thanks to JavaScript throughout; High developer productivity	Not ideal for features like real-time data synchronization
Ruby on Rails (RoR)	Rapid development and developer-friendly syntax; Good for startups and prototyping; Improved quality due to focus on convention over configuration (CoC)	Performance issues with very high loads; Not the best choice for computationally intensive tasks
Serverless (AWS Lambda, Azure Functions, Google Cloud Functions)	Clean and readable code; Excellent for complex and data-driven applications; Robust ecosystem and active community	Limited to certain use cases; Vendor lock-in concerns

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Step 5. Create a product roadmap

Now that you have established a product vision and identified and prioritized features for your product, it’s time to estimate the project scope and start building a roadmap. It will provide you with guidance on how to build your SaaS product, ensuring alignment with your vision and user needs.

• Set milestones for SaaS application development, including the release date for the Minimum Viable Product (MVP) and subsequent releases. Start by clarifying your overall objectives for the SaaS application.
• Identify key phases. These typically include ideation, MVP development, beta testing, feature enhancements, scalability improvements, and ongoing maintenance.
• Determine timeframes for each milestone. Consider factors like tasks’ complexity, resource availability, and dependencies between milestones.
• Visualize the roadmap template, outlining the timeline and key milestones. You can use Gantt charts, spreadsheets, or specialized roadmap software.
• Plan beyond the MVP. Outline the subsequent releases and iterations beyond the MVP. Specify which features and enhancements will be included in each release.

As you move forward and learn more about your product and market, revisit your roadmap and adjust it.

Read also: Software development process. Main things

​​Step 6. Develop a business plan

A solid business plan helps you stay focused, win support, and show investors you know exactly where you’re headed. Here’s what you’ll want to include:

• Executive summary that provides an overview of your SaaS business, including your product, target market, value proposition, and financial objectives.
• Company description, its mission, vision, and core values. Explain why you’re uniquely positioned to succeed in the SaaS market.
• Market research, including insights into industry trends, competitor analysis, and your target audience’s needs and preferences.
• Product description, including its unique features and how it addresses specific pain points and offers value to users.
• Sales and marketing strategy covering details on customer acquisition, lead generation, content marketing, SEO, paid advertising, and sales channels.
• Product development roadmap with an explanation of how you plan to build a SaaS app and evolve it over time.
• Financial projections, including profitability estimates and funding requirements. Specify if you’re seeking external funding and explain how you plan to use the funds to grow your business.
• Team members and their roles, qualifications, and expertise. If your team’s missing a few key players, share how you plan to fill those roles.
• Milestones and Key Performance Indicators (KPIs) to track the progress of your business. These could include user acquisition goals, revenue targets, and churn rates.
• Risk analysis and mitigation strategies with contingency plans.

Step 7. Choose the right SaaS product development team

When it comes to hiring software development specialists to build a SaaS product, you have three available options:

1. Hiring freelancers

This option will work for you if your main concern is how to build a SaaS product most cost-effectively. However, it comes with some reliability concerns. The quality of services provided by individual freelancers can vary widely. If you hire a specialist whose work doesn’t meet your standards, you may end up spending additional time and money on revisions.

2. In-house development team

Hiring an in-house team gives you full control over the SaaS development process, but it also comes with big costs. Think salaries, hardware, software licenses, and more.

3. Outsourcing your SaaS project to a software development company

Outsourcing SaaS software development can help you avoid the operating expenses mentioned earlier. In return, you will get a dedicated team of highly qualified software-as-a-service developers, UX/UI designers, quality assurance engineers, and project managers experienced in delivering reliable cloud-based products. They will ensure that your cloud solution adheres to industry standards and is tailored to your specific business needs.

Step 8. Build your SaaS product

The SaaS development process is commonly broken down into the following stages:

• Discovery session allows your development partner to get familiar with your project and business. They need it to define the project scope and provide you with accurate time and cost estimates.
• UX/UI design involves creating wireframes and clickable prototypes to visualize your product.
• Development is writing the actual code of an application. Your SaaS development team may approach it differently, but the Agile approach is highly recommended for startup projects or projects where any uncertainty is present.
• Quality assurance is necessary to ensure that each product feature works as it should and that the system has no bugs or glitches.
• Deployment and launch processes make the solution accessible for both search engines and real users looking for your services.

After your product is live, set up performance monitoring and promptly address bugs and issues. Actively collect feedback from your users through surveys, customer support interactions, and user analytics—this will guide your future enhancements.

SaaS application development at Syndicode

At Syndicode, we have been developing SaaS applications for almost a decade. One notable example of our expertise in software-as-a-service development is Kinderlime, an educational management tool. 

Our team successfully addressed high-load issues, created a new API for both the Kinderlime website and mobile app, overhauled the platform’s user interface and experience, and introduced new features.

These enhancements helped Kinderlime to become one of the fastest-growing SaaS and mobile child care management platforms. Eventually, it caught the attention of industry leader Procare Software, leading to its acquisition.

Another SaaS development project we take pride in is SwiftComply, a B2B compliance management software. Our specialists restructured the product for scalability, ensured seamless integration between the client’s offerings, established a secure payment gateway, and incorporated numerous microfeatures to enhance operational efficiency and user experience.

The result? SwiftComply now serves businesses across more than 400 cities in the USA and continues to win the trust of American citizens.

Challenges in SaaS Application Development

SaaS software development manifests a company’s willingness to keep up with technological advances. However, several risks associated with the cloud can slow down the development/migration process for some businesses.

Data protection

More than 51% of organizations report cloud data protection as more challenging than on-premises. The common causes of data loss are

• Accidental deletion due to human error or negligence. SaaS vendors will add, modify, and delete data regardless of the action context when requested by someone having valid credentials;
• External hackers and malware. Viruses and malware creators continue developing new tactics and methods to target critical data of organizations and individuals;
• Malicious insider activity. Employees can willingly or accidentally reveal sensitive data and put their organization at risk.

To keep data safe, most SaaS development teams rely on access controls, backups, security policies, and training employees to avoid common risks. Syndicode additionally emphasizes data channel protection and thorough quality assurance.

Integration issues

A cloud-based application must communicate seamlessly with other apps to provide an excellent user experience. However, inadequate integration can cause data silos and impact operational effectiveness.

High cost is another issue businesses face when trying to avoid the previously mentioned problem by leveraging custom SaaS application development.

Lack of support from the solution owner will substantially complicate the integration process and maintenance.

That’s why picking the right third-party tools and planning integrations early is just as important as building the product itself.

Updates

One of the common SaaS drawbacks is the partial system’s unavailability during updating or releasing a new version. You can avoid surprises by scheduling updates and giving customers a heads-up ahead of time.

Another way to avoid downtime is to use a blue-green deployment strategy, which keeps the system live while rolling out updates.

Should you migrate your web application to SaaS?

SaaS adoption continues to rise, and many businesses migrate their data to the cloud. Shopify, Dropbox, Slack, and Zoom are some of the largest organizations that benefited from SaaS development services.

The greatest advantages of SaaS as a business model are

• Predictable revenue due to subscription-based operation;
• A shorter sales cycle compared to the traditional process since a customer can start using your services straight away;
• A better customer experience as your product doesn’t require installation and manual updates.

Business considerations

To really benefit from SaaS, you’ll likely need to rethink how your business delivers and supports the product. 

First, you must shift from selling a product to offering a service. Therefore, powerful and appealing software must be accompanied by service providers — help desk, marketers, sales, etc. 

Next, you must reconsider how you deliver your product to the customer. Consider the following to make your migration successful:

• Customer value. Your pricing strategy should focus on the value your product brings to users and keep a pulse on their value perceptions;
• Customer loyalty. Attracting new customers is vital for business growth. However, a good retention rate allows you to generate predictable revenues and grants you a chance to upsell products and services;
• Analytics. It would help if you had metrics to measure success and make informed decisions. The essential ones are monthly and annual recurring revenue and customer churn.

Technical considerations

You’ll probably need to refactor or rebuild parts of your app to make it cloud-ready. Here is how to build a SaaS product from an on-premises one:

• Outline architecture. You have to split your existing solution into parts to migrate them one by one gradually. Select a fitting pattern and choose the tools and frameworks for migration.
• Reshape your services. Your software services must be sized and shaped to give you a scalable and resilient cloud solution.
• When it comes to migration, you’ve got a few options: single-tenant (aka silo), layered, or data-first. Each has its pros and trade-offs.
  • The single-tenant model requires no refactoring and offers high data security and customization.
  • Layered migration implies incrementally migrating your solution to a multi-tenant model, which gives you better control.
  • Data migration migrates data storage to a multi-tenant scheme, leaving the remaining layers to a single-tenant architecture.

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Cost of building a SaaS solution

The cost of SaaS app development can vary widely depending on several factors, including project scope, the technology stack chosen, and the rates of the specialists involved. 

For a clearer idea of costs, it’s best to chat with your SaaS development partner directly. However, if you’d like to make a rough estimate on your own, we have a detailed guide on software development project cost estimation. 

Here we’ll list the key steps to consider:

1. Start by outlining what you want to build and mapping out a rough development plan.
2. Estimate the resources needed for SaaS application development, including hiring and maintaining a team, tech stack ownership or licensing, and SaaS infrastructure cost.
3. Estimate development time by breaking down the project roadmap into individual tasks and estimating the time necessary for each task completion.
4. Allocate a budget for marketing and promotional activities to launch and promote your product.
5. Estimate ongoing operational expenses, such as server maintenance, customer support, software updates, and user acquisition costs.
6. Once you’ve crunched the numbers from each step, you’ll have a solid estimate of what your SaaS application development might cost.

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A word about the SaaS pricing models

SaaS products typically use flexible pricing models that align with how businesses grow and consume value. The most common are:

1. Subscription-based pricing
   This model charges customers a recurring fee—monthly, quarterly, or annually—for access. It ensures predictable revenue for providers and budget-friendly payments for clients. It also builds loyalty by spreading costs over time.
2. Tiered pricing
   Offers multiple plans with increasing levels of features, usage limits, or support. It allows businesses to start small and upgrade as needs grow, making it ideal for startups and SMBs scaling over time.
3. Pay-as-You-Go (usage-based)
   Customers pay only for what they use—common in infrastructure, API, or analytics services. It’s cost-efficient for businesses with variable or seasonal usage patterns.
4. Per-user pricing
   Charges based on the number of active users. It’s easy to understand and scalable, especially for collaboration or CRM tools used across teams.
5. Freemium + upsell
   Offers basic features for free, with advanced functionality behind a paywall. It attracts users quickly and converts them over time, reducing acquisition costs.

These models give businesses control over spending while aligning pricing with actual usage or value gained, making SaaS both affordable and scalable.

Sample estimate of SaaS development cost

For example, let’s estimate the cost of developing a basic project management and collaboration platform tailored for small to medium-sized businesses. This hypothetical SaaS application includes the following features:

Feature	Implementation time
User authentication and role management	2-4 weeks
Project and task management	6-10 weeks
File and document sharing	4-6 weeks
Team chat and messaging	6-8 weeks
Dashboard and reporting	4-6 weeks
Mobile app (iOS)	8-12 weeks
Integration with Google Workspace for email and calendar synchronization	4-6 weeks

The technology stack for this SaaS app development includes:

Frontend	Backend	Infrastructure and deployment
ReactJS for the web application	Ruby on Rails for the server	AWS for hosting and cloud services
Swift for the mobile app	PostgreSQL for the database	Docker for containerization

Let’s say the team was hired in Eastern Europe. Its composition and costs:

• Product Manager (1): $10,000-$16,000
• UI/UX designer (1): $9,000-$13,000
• Front-end developers (2-3): $25,000-$45,000 each
• Back-end developers (2-3): $25,000-$45,000 each
• QA engineers (2): $15,000-$25,000 each
• Mobile app developer (iOS) (1): $25,000-$47,000

The cost of AWS services can vary widely based on usage and the specific AWS offerings you choose (e.g., EC2 instances, RDS, S3 storage, etc.). A rough estimate for a small to medium-sized SaaS application might range from $1,000 to $3,000 per month.

Thus, the total estimated development cost for developing a SaaS platform (excluding AWS) ranges between $174,000-$396,000.

Please note that this estimate doesn’t consider other expenses such as legal and compliance, marketing, ongoing operational costs, or post-launch support.

Future trends in SaaS development

The SaaS industry is shifting to meet growing demands for smarter, more flexible, and industry-specific solutions. Key trends shaping the future include:

• Vertical SaaS—platforms built for specific industries such as healthcare, construction, and legal. These solutions offer faster onboarding, deeper feature alignment with niche workflows, and easier compliance with industry regulations.
• AI-powered capabilities are increasingly integrated into SaaS to automate repetitive tasks, deliver predictive analytics, and personalize user experiences in real time.
• Composable and modular architecture—businesses are replacing all-in-one platforms with connected microservices and API-based tools. This model allows for greater flexibility to adapt to changing needs, faster integration of best-in-class services, and easier customization without vendor lock-in.
• SaaS governance and optimization. As software stacks grow, companies are focusing on managing user access and data security, avoiding redundant tools, and controlling and optimizing SaaS spend.
• Low-code and no-code tools let non-technical users build apps and workflows. This enables faster internal development and reduces dependency on engineering teams.

A forward-thinking SaaS application development company will incorporate these trends into its product strategy, creating more intelligent, agile, and user-empowered SaaS software.

Summary: How to develop a SaaS application

We hope this guide gave you a clear answer as to how to build a SaaS product without wasting time or money. Here’s a summary of key points:

The SaaS model offers numerous advantages compared to traditional software. This includes recurring income, low initial costs, scalability, global reach, automatic updates, and robust security.

The crucial steps to building a robust SaaS product include:

• Validating your idea to ensure market fit.
• Selecting must-have features and prioritizing their development.
• Choosing the right monetization model to balance value and compensation.
• Crafting a technology stack that ensures scalability and security.
• Creating a roadmap to guide your product development.

Got a SaaS software development idea you’re ready to build? We’d love to help you bring it to life. Syndicode’s track record includes building multiple cloud solutions across various industries. It means we know how to build a SaaS solution that meets the most rigorous business requirements.

If you have any questions about SaaS development or custom software engineering, simply fill out our contact form. Our dedicated representatives will promptly provide you with the answers you need.

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Frequently Asked Questions

• Why is SaaS popular?

  SaaS is getting more popular every year—and for good reason. Firstly, SaaS products save costs by eliminating the need for in-house infrastructure and maintenance teams. Additionally, they are accessible from any device with an internet connection, anywhere. They can also scale effortlessly and receive updates automatically, making them a smart choice for businesses and individuals.

• What is the difference between SaaS and traditional software?

  Unlike old-school software that needs to be installed on every computer, SaaS runs in the cloud and works right through your browser. This simplifies distribution, maintenance, and updates, as all users receive them automatically without manual installations. This also means that SaaS product users subscribe to it on a recurring basis rather than owning it outright. However, SaaS products may offer limited customization options compared to traditional software, as it can only integrate with other cloud-based products.

• Why does the SaaS business model work?

  First of all, SaaS application development services allow companies to save on hardware and software. Second, organizations no longer need to take care of the updates. They will always have the latest software version offered by the SaaS provider. The third reason is accessibility. With SaaS development, customers can access the applications from anywhere, provided the place has an internet connection. The same goes for devices: users can freely switch gadgets without issues assessing the required app. Another benefit of SaaS platform development is enhanced security. Cloud computing service providers adopt the latest security practices to safeguard their customers’ sensitive information.

• How to calculate the cost of SaaS development?

  To calculate the cost of SaaS development, consider factors such as project scope, development team size and location, technology stack, features, and ongoing maintenance. Break down the project into phases, estimate hours, and multiply by hourly rates. Include costs for design, development, testing, and project management. Account for SaaS-specific requirements, such as hosting, third-party services, and potential scalability expenses. Don’t forget post-launch support and updates. Keep in mind that different developers and software development companies may have different rates.

• How to reduce the cost of SaaS development?

  To reduce software as a service development cost, start with a lean Version 1.0, focusing on core features that are just enough to let customers understand what your SaaS web app is about. Gather user feedback and incrementally add features based on insights. Alternatively, consider outsourcing your SaaS development project to a reliable software development partner. This option is less expensive than assembling an in-house software development team and more reliable than hiring freelance developers.

• How to create a SaaS application from scratch?

  To ensure successful SaaS application development, begin with thorough market research and an understanding of your industry, competitors, and target audience. After you determine how to build a SaaS solution to stand out from market rivals, choose the right revenue model. Define the primary and secondary functionality aligned with your software-as-a-service app. Then, choose the right technology stack and partner with a reliable company to create a SaaS application.

• What size team is needed to develop a SaaS?

  The size of a dedicated development team to create software-as-a-service depends on the desired features and their complexity. However, a typical team includes a business analyst to explore your SaaS business idea, a software development team lead to plan and guide the development, a UX/UI designer, back-end and front-end developers, quality assurance engineers, and a project manager. The latter specialist is necessary to facilitate communication between the team and stakeholders and keep you updated about the current state of your SaaS app development project.

• What should I pay attention to and track as a SaaS product owner?

  The choice of metrics to track should be based on your business objectives as a SaaS product owner. Generally speaking, most SaaS businesses find it crucial to track the monthly recurring revenue (MRR), customer lifetime value (CLV), churn, customer retention, and customer acquisition cost (CAC). MRR helps assess the cash flow sustainability, while the other metrics show how effectively you gain and keep customers.

• What is the importance of a Minimum Viable Product (MVP) in SaaS development?

  Starting your SaaS development journey with an MVP will help you minimize risk, validate your product concept, and efficiently allocate resources. Launching a simple first version (your MVP) helps you test the waters with real users before you invest big. It gets your product out there quickly, lets you gather feedback, and shows you which features really matter. In other words, an MVP can help you make informed decisions about further development and allocate resources more efficiently.

• How to get funding for the development of my SaaS product?

  How you fund your SaaS development depends on your goals and how much control you’re willing to give up. The most common options include bootstrapping, crowdfunding, Angel Investors, Venture Capitalists, SaaS accelerators or incubators, loans, and revenue-based financing. Bootstrapping means using personal or co-founders’ resources and offers control but limited initial resources. Crowdfunding implies raising funds from backers who believe in the idea and is best suited for consumer-oriented SaaS products. Angel Investors, VC firms, and accelerators offer capital and mentorship but require equity. Loans provide traditional financing without equity.

• How to manage SaaS product upgrades?

  Rolling out a new feature? Start by testing the idea and making sure it’s something your users actually want. Next, plan releases with your SaaS development team and assign them tasks. Consider beta testing with a group of willing customers to gather feedback, identify issues, and make improvements before the official release. Develop a comprehensive communication plan to inform customers about the upcoming upgrade. Decide on the roll-out strategy: phased, simultaneous, or allowing opt-in for users. Finally, prepare a support team to assist users facing problems during the upgrade and continue gathering feedback after the upgrade is live.

• How to measure the success of a SaaS product?

  You can tell that a SaaS product is successful by tracking metrics like Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC). If your customer lifetime value is at least 3x higher than what it costs to acquire them, you’re on the right track. Further, monitor user retention rates, churn, and expansion revenue. Analyze customer satisfaction through Net Promoter Score (NPS) and gather feedback. Assess user engagement, feature adoption, and monthly recurring revenue (MRR) growth. Keep an eye on customer support metrics and response times. At the end of the day, success means happy customers, steady growth, and a product that pays off.