SaaS Application Development: benefits & challenges for startups

Investing in SaaS application development can help you earn billion-dollar revenues.

Don’t believe it?

Just take a quick look at the top 10 biggest SaaS companies in the USA in 2022.

10 biggest SaaS companies in the USA in 2022

Adobe Inc., Salesforce Inc., and Intuit Inc. have been valued at more than $100 Billion in market capitalization. If you go down the list, Snowflake, Autodesk, and Workday have generated over $35 Billion market capital. All these SaaS applications have produced huge revenue in 2021. 

So developing a Software as a service application is indeed a worthy investment to make. SaaS market is enjoying an impressive annual growth of 18%. And this fast growth is opening new business scope for SaaS startups that want to build cloud-based solutions for businesses and consumers.

And with the penetration of smartphones, the scope of SaaS is also extending to mobile apps. Hence, SaaS application development is now turning into a billion-dollar business concept.

If you are going to start your business as a Software as a service company, then we have good news for you. In this article, we will share a guide to SaaS application development. 

Here, you will know

  • What is SaaS application development?
  • How is Software as a service application different from other applications?
  • The Rise of Mobile SaaS Applications
  • Top Benefits of SaaS application development
  • SaaS application development process
  • Challenges in Software as a service application development

So, let’s get started. 

What is SaaS Application?

SaaS is Software-as-a-Service based application or software that works on cloud technology. It allows users to connect and use the SaaS application over the internet through a web browser. To put it in a nutshell, Software-as-a-Service (SaaS) is a web or mobile application hosted on a cloud server and allows users to access it from any device and location. 

Examples of SaaS applications

  • Salesforce
  • Canva
  • Dropbox
  • Microsoft Office 365
  • Google Suite
  • ZenDesk
  • Slack
  • Box
  • AWS (Amazon Web Services)

What is mean by SaaS application development?

SaaS development is the process of creating Software as a service applications for web, or mobile platforms. It involves design, development, testing, and deployment of the SaaS application on the cloud server.  

How is SaaS application different from other applications?

In principle, all SaaS applications are either the desktop software or web application. But not all web apps and software are SaaS. To get a clear understanding see the below table

SaaS Application   Web Application
 Works on a cloud-based server  It is hosted on a web domain server, not on cloud
 Doesn’t need IT infrastructure  Works from a remote server
 Based on software licensing and delivery model  Built on a web user interface
 Server supports multi-user access  Can’t handle large multi-user access
 Generate revenue from the services offered  Can’t offer multiple services


Now, we have an interesting thing for you. 

The Rise of Mobile SaaS Applications

Since SaaS has been running in the market for a very long time. It has been primarily built for web platforms. But, with the rapid disruption of mobile app usage. Mobile devices have become a highly profitable platform for SaaS businesses. 

Whether it is B2B or B2C, every person prefers mobile apps for accessing or browsing anything online. Software as a service applications are mostly developed to work as web applications. 

But since businesses and consumers are adopting the mobile-first approach, the rise of mobile Software as a service applications is coming into trend. Here are the latest market reports that highlight how big the market of mobile SaaS applications is and growing tremendously. 

Size of the small-to-medium business (SMB) mobile Software as a Service (SaaS) market worldwide, from 2016 to 2021(in billion U.S. dollars)

As per the Strategy Analytics report, the global Mobile SaaS touched $37.9 Billion in 2021 from $20.9Billion in 2016. Showing a rapid growth of 12.7% CAGR in the period 2016-2021. The report further suggests that alone corporate mobile SaaS will reach $7.4 Billion in 2022. 

Hence, it is evident to see the SaaS business is not limited to web platforms. It is now being extended to mobile platforms.

So, today when you plan to create a SaaS application, you have two platforms. Web and mobile both. And since the use of mobile apps is increasing across different industries.

Industry experts suggest this is the best time to invest in Software as a service application development for aspiring SaaS businesses. It will help them to take a competitive advantage in the early stage of the mobile SaaS market. 

Top Benefits of SaaS application development

SaaS applications give huge benefits to both Software as a service owners and users. As a SaaS startup, you don’t need tons of resources or funds to build a complex application. By using cloud computing technology, you can easily build SaaS application and deploy it to the cloud server. 

The main advantage of using SaaS application is that it provides real-time access to instant online services on any device and saves significant cost. Below are some of the top benefits of why you should invest in Software as a service application development.

#. Cost-efficient Solutions

Since Software-as-a-Service is built on a cloud server, it can be easily deployed and launched. SaaS providers do not have to develop a large-scale IT infrastructure. They simply need to create the Software as a service application and deploy it to the server. 

SaaS users can anytime access the Software as a service application without installing it on their desktop. This helps in reducing time and effort. And eventually, it decreases software maintenance costs. 

#. Better Scalability

Software as a service application development provides better flexibility and scalability to SaaS providers. Since SaaS solutions are placed on scalable cloud infrastructure, you can easily integrate third-party apps. 

If there is any service or feature that your customers need, you can simply integrate required APIs and enable that specific service. 

SaaS applications help business stakeholders to improve their growth through better user analytics data. You can track user behavior and provide them with their preferred options. 

For example, if you are a data storage-based SaaS app like dropbox. Then, you can offer them a free starter plan. Afterward, you can ask to purchase premium service.

#. Wide User Accessibility

SaaS applications can be accessed from any device which supports web browsing. Your customers can use your SaaS from desktop computers, laptops, tablets, or smartphones. This gives a great advantage to both Software as a service providers and SaaS customers. 

SaaS companies can provide their cloud-based services to any device user. And users can also avail of the service from any computer device that supports browsing apps. And since the use of mobile apps is increasing, consumers and businesses now prefer using Software as a service on mobile apps. Therefore, we see why upcoming SaaS startups are investing in custom SaaS app development. 

#. Robust Security and Privacy

When it comes to security and privacy, SaaS applications stand out best. Software as a service application development uses SSL and TLS encryption as its standard security protocols. This ensures that SaaS apps are protected from unauthorized access and safeguard users’ information.

In addition to this, SaaS apps work on cloud services. So, it stores the entire information on cloud storage which is fully protected from cyber attacks. This cloud storage or server is solely maintained by the company itself. 

Hence, you can easily rely on them when it comes to the security and privacy of data. AWS, Google, Microsoft, and Oracle, are the popular brands that provide Software-as-a-Service. They have a big cloud infrastructure and IT resources for securing users’ data on their cloud servers. 

You might feel excited knowing the benefits of SaaS applications. So let’s have a quick look at the

SaaS Application Development Process

SaaS Application Development Process

1. SaaS Ideation and Validation

SaaS product development is a complex software development process. Its scope is huge. Thus, you should have a clear vision of what SasS product you want to develop. You can provide multiple services through a Software as a service application. 

Hence, the first phase of the SaaS app development process is to define your SaaS concept. Conduct in-depth research into the SaaS market. Get good business insights from leading market statistics platforms. This will help you understand what is currently in demand in SaaS market. 

Don’t forget that the SaaS industry is big and highly competitive. You have to find out an incredible SaaS product idea that stands out as unique and effective in the market. For better outcome, you should better consult a professional SaaS application development company that can help you with SaaS conceptualization and find effective Software as a service solutions.

And once you have the SaaS product concept, validate this by analyzing its technique requirements and user’s perspective.

2. UX/UI Design

This phase might be crucial for you. SaaS applications involve various features and functions to provide services. If users do not feel convenient and comfortable using your SaaS app, they might leave your site. Therefore, the UI/UX design of SaaS apps matters a lot. 

To ensure you design a user-friendly SaaS application, first, create a wireframe and do prototyping. This will give you an overview of your application. You can also take SaaS UI/UX design ideas from popular SaaS applications in the market.  

3. SaaS Application Development and Testing

This is the real task. At this stage, you will start the development process to turn your SaaS product into a live platform. Developers will do coding and programming. And once the final product is ready. They will take your SaaS application through rounds of testing and Quality assurance. 

Here, you have to pay extra attention. If you are developing a SaaS application as a web app, you should ensure the app works well on desktop platforms. And if you are creating mobile SaaS application. Then, you should conduct a proper test to ensure the app performs nicely on Android or iOS platforms. 

4. Product Launch and Maintenance

After getting your SaaS product ready, you have to deploy and launch it on the web. To launch your SaaS application, you can use GitHub, AWS Code Commit, or other cloud service platforms. launching SaaS applications is entirely a technical process.

5. SaaS Maintenance and Scaling

SaaS application development doesn’t end at the development stage. In fact, the real work begins after this. Software-as-a-Service is dynamic and flexible. You always have to monitor its performance and work. Therefore, you need a dedicated plan for SaaS maintenance and SaaS growth strategy. 

Since the competition in SaaS business is continuously growing due to digital transformation, you have to keep a watch on the user behavior and market trends. For example, adding new features, updating old versions, providing consistent customer support, etc. 

Challenges in SaaS Application Development

Challenges in SaaS Application Development

1. Integration of APIs and Third-Party Services

One of the common challenges that you might face during SaaS development is the integration of third-party services. 

Especially in payment, if your SaaS application requires an online payment system. Then, you will need to integrate PayPal, QuickPay, Stripe, Skrill, or Braintree into your SaaS app. And integrating these APIs is a complex technical process. They have API documentation for implementing the payment service into a SaaS app. 

How to overcome this challenge: To integrate APIs and third-party services into your SaaS application, you have to go through API documentation. You also should have knowledge of APIs. Hence, the best way to overcome this challenge is to hire a professional SaaS application development company

2. Ensuring Data Security and Privacy

SaaS applications store piles of sensitive data related to your business and customers. Any security breach can lead to a big loss of data and privacy violations. So having not a robust environment for data security might put your SaaS app at risk. 

In addition to this, you have to ensure your SaaS application is compliant with various data regulations and country laws. For example, GDPR and HIPPA. 

If your  SaaS app is found violating any country’s data protection laws, you might have to face legal actions from the respective country. 

How to overcome this challenge: While choosing any SaaS development services, you should check whether the company has knowledge of GDPR and HIPPA compliances. And their developers use SSL and TLS in the security protocol for encrypting the communication between the user and server. 

3. Zero Downtime 

SaaS applications require constant monitoring and maintenance. In case, if you need to update the platform, then a challenge might come into place. And which is downtime. 

During any update or maintenance of your SaaS, your users may not have access to the services. This may cause huge inconvenience to your customers. They need to use your SaaS consistently. Any type of inaccessibility may cause financial loss to them. 

Therefore, it would be your duty to ensure zero downtime during maintenance or updating your SaaS platform. If your customers have to face loss in any form, they may quit losing your SaaS and find an alternative.

How to overcome this challenge: In conventional approach, during maintenance or update, service providers notify their customers about the downtime period in advance. But your customers are using your SaaS for business purposes, this reason can’t work. Therefore, to counter this problem, you should follow a blue-green approach. 

In this method, you release an alternate model of the older version for a short period of time. The previous SaaS version is called Blue and the newer is Green. So during maintenance, you can provide an alternate link or platform to allow your customer to use your Software-as-Service consistently. 

4. Managing Subscription Lifecycle

SaaS incorporates many features and services to offer. Your customers might need to change their plans while using your services. For example,

  • Use trial version
  • Subscribe
  • Unsubscribe
  • Cancel
  • Upgrade 

And to serve your customer’s change requests, you need to constantly work on managing the subscription lifecycle. Plus, you have to manage the data of your subscriber list. Managing all these things could be a challenge for you. 

How to overcome this challenge: There are two solutions to this problem. Either you can create your own subscription system or integrate external APIs. 

How Much Does it Cost to Develop a SaaS Application?

On average, the cost of SaaS application development is between $50,000-$200,000. However, the exact figure totally depends on various factors. For example, the complexity of the application, integration of APIs, per hour rate of the developer, and so on. 

At MobileCoderz, we charge $25 per hour rate for developing a full-stack SaaS product. We have delivered many SaaS solutions for many startups at cost-efficient budgets between $40,000-$150,000

However, the final cost of SaaS application development primarily depends on what type of SaaS application you want to build. In the below table, we have listed the cost of SaaS application development for popular types of Software-as-a-service. 

Type of SaaS Average cost with basic SaaS features Example
 Project management  $60,000  Trello, Basecamp
 Email marketing  $60,000  Mailchimp,


 CRM  $60,000  Salesforce, SAP
 ERP  $110,000  NetSuite,

 abas ERP

 Marketing  $90,000  HubSpot CRM, Hootsuite
 Accounting  $70,000  Sage Intacct, Zoho Expense
 DIY website builder  $130,000  Wix, Squarespace


SaaS is like creating a virtual company. It allows you to connect with millions and billions of users around the globe. This means, your SaaS product has a large size of target audience and business scope. From big to small, every level of SaaS company has achieved great success by providing innovative and problem-solving software-as-a-service to their customers. 

Hence, investing in SaaS application development is an assured success. But, to ensure your SaaS product also av=vice the same success and generates big revenue, you should try to develop your SaaS product under an expert SaaS application development company

How MobileCoderz Can Help You Build Your SaaS Product?

MobileCoderz is an award-winning software development company. We have dedicated professionals and technology resources to build every type of SaaS application for your business model.

We provide best-in-class SaaS development services for web and mobile platforms. MobileCoderz has highly experienced developers and designers who are expert in developing web and mobile SaaS applications.  

If you have some questions to ask regarding your SaaS project, 

Just Schedule a Call and Speak with Our Experts

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