Quick Summary

Are you the creator or co-creator of a SaaS product? OR are you a serial entrepreneur with a novel startup concept? And do you want to know how much does it cost to build a saas platform? Then, take a few minutes out of your busy day to dive deep into the ocean of calculating the cost of building a SaaS application. In the last decade, SaaS applications have transformed the software industry.

It has boosted a startup culture capable of developing a product on a shoestring budget. In this blog, you can learn more about the exact cost to build a SaaS application. This article investigates how much it costs to build a SaaS application by taking into account factors such as complexity, development stages, solution type, team type, and geographical location.

Latest SaaS Development Trends

• SaaS products are quickly rising to the top of the list for companies looking to increase accessibility and agility while gaining a competitive advantage. It is fairly simple to use, with no installation hassles or security concerns.

• What, however, will propel this market forward in 2024? Artificial Intelligence (AI) and everything related to the autonomy of self-learning are two of today’s most well-known trends. Integrating AI into SaaS opens up a world of possibilities, beginning with superior personalization and gaining data intelligence, both of which are critical for modern businesses. Google, Amazon, GitHub, and Zoom all incorporate AI into their SaaS products in some way. Today, AI is a widely used technology in their companies.

• Another popular subcategory of this trend is Machine Learning, which involves learning by applying solutions to numerous similar problems using mathematical statistics, probability theory, and numerical methods. Netflix, for example, actively employs ML in its recommendation service. A mobile-first approach, which is already prevalent in the IT industry, will remain prominent. SaaS products delivered via the cloud are no exception.

The Stages of SaaS Application Development and Their Costs

Let’s take a look at how to build a SaaS in four simple steps to answer your question how much does it cost to build a saas platform. Furthermore, we will consider the SaaS development costs in detail for each step.

1. The Validation Process:-

• Before beginning the development process or even assembling a team, you must streamline the product’s vision and validate its concept. What is your product, who is your target audience, and what problems does your SaaS system solve? What are your rivals’ names? The more research you conduct at this point, the more nuanced and elaborate your final report will be.

• Planning is essentially a more practical validation in which you determine the scope of your project, potential security protocols, and a pricing model. There are several ways to monetize a SaaS product: monthly/yearly subscription, usage-based pricing, or freemium.

• This stage should take approximately 100 hours to complete. It may appear to be a lot now, but in our experience, well-planned projects progress much more smoothly and encounter fewer obstacles. At this stage, the cost of developing a SaaS programme is $0 if you do all of the research yourself, or the average hourly rate of a Business Analyst if you decide to hire a third party to assist you.

2. Product Discovery and planning:-

• In SaaS cost, Product discovery usually takes between one and three weeks. We can estimate the cost of this phase at $1,600-$4,800 by multiplying 40-120 hours by the hourly wage of at least one specialist, say $40/hour.

• Entrepreneurs who are developing SaaS applications for the first time frequently begin with a minimum viable product (MVP). It essentially consists of the key SaaS components as well as at least one unique functional tool. Regardless of how limited, all app features should provide value and meet the needs of customers in the simplest and quickest way possible.

• The advantages of this approach include a shorter time-to-market, the ability to quickly test ideas and get customer feedback, and the low cost of developing a SaaS product. You can begin with a single tool and, based on user feedback and demand, pivot or make adjustments, introduce more advanced features, and eventually run a full-fledged SaaS platform.

• At this point, we recommend hiring a consultant or experienced SaaS developers. They will assist you in making some of the initial critical decisions, such as eliminating all unnecessary MVP features, refining the essential ones, selecting the most appropriate technologies and solutions, and so on. The experts will also assist you in comparing your solution to competitors, estimating the project budget, and planning the application development process.

3. The Development Process:-

• To know the SaaS software development costs, the development process is now the most important part. According to our experience, special attention should be paid to UI/UX design because SaaS products should be one-box and customized at the same time, which is difficult to achieve in practice. And the simplest way to please everyone is with a user-friendly design, intuitive controls, and a stylish and concise appearance. In a nutshell, everything that UI/UX designers do for a living revolves around anticipating user needs.

• The release of the MVP will also help here because it allows for the collection of feedback from customers and helps to understand which functions were used the most frequently and which were used less frequently and can thus be removed.

• Because SaaS products use cloud storage, multiple libraries, and tools, their architecture is typically quite complex. As a result, most businesses rely on third-party hosting providers and make extensive use of API integrations.

• It should be noted that before deployment, the project must meet the technical specifications, security guidelines, and regulations, as well as service-level agreements. Development is the most time-consuming and difficult stage because it requires highly advanced skills from developers. It can take anywhere from three to six months.

• The following is the cost of developing a SaaS software product: the hourly rates of one designer, at least two developers, and a Project Manager (say, $60/hour) multiplied by three months of work yields a rough estimate of $33,000.

4. Launch, maintenance, and improvements:-

• When talking about SaaS cost, the monthly cost of maintenance and improvements by a couple of developers, designers, and QA specialists will start at $10K. Furthermore, SaaS hosting costs can range from $1,000 to $10,000. Adoric’s monthly expenses, for example, are $7,000.

• All deployment operations must adhere to project specifications, service-level agreements, security and other regulations, and the shared infrastructure of cloud services. It is critical to support the launch of your SaaS product with active marketing and sales efforts.

• You will need to run user testing, fix issues on a regular basis, track relevant metrics and benchmarks, collect customer feedback, and quickly implement changes and test new business hypotheses in the first few months. Monitoring customer behavior and revenue will also assist you in fine-tuning the chosen SaaS model to achieve profitability.

• It is critical to regularly refresh, update, and optimize the service. Developers must implement updates using no-downtime deployment to ensure continuous availability and avoid situations where a portion of the user base is using an outdated version.

Read More – Everything you need to know about developing SaaS products

Factors affecting SaaS development costs

To begin, SaaS software development is determined by the time frame. The second factor is the hourly rates of the specialists. The following equation is used by every online calculator: Total cost to build a SaaS product = Product hours x Cost per hour

The two variables are influenced by a variety of factors.

1. Type, Complexity and scope of SaaS product:-

Every additional functionality, requirement, and third-party integration necessitates additional research and coding effort, as well as testing, which adds hours to your project timeline and dollars to your bill.

The number of project team members is also determined by the complexity of the SaaS app, deadlines, and other factors. Your checklist may include, but is not limited to, the following items at various stages of the development process:

• Business analyst

• Product manager (best performed by the startup founder)

• Project manager (PM)

• Cloud solutions architect

• User experience and user interface designer

• Front-end web developer

• Back-end developer

• Mobile Developer

• QA engineer

• DevOps Specialist

Marketing, legal, financial, and other experts.

2. Features of the product:-

You must list the elements involved in order to determine the pricing of SaaS products. The time and SaaS cost of a product is determined by the features that it offers. At the start of a project, you concentrate on core features while creating an MVP. Once you have customer validation, you can develop a full-fledged product. As a result, the cost varies depending on the number, type, and complexity of the features in both stages.

The following are the features that any SaaS application must have:

• Role-based access management and user permissions

• Security

• Communication

• Analysis Software

• Account management and billing

3. Product development workflow and duration:-

• The SaaS software development costs is determined by the amount of time it takes to develop and deploy the project, as well as the quality of the code. It goes without saying that if the developers’ work falls short and the code is poorly written, it is likely that additional time (and thus costs) will be required for Quality Testing and bug fixes, as well as a poor customer experience.

• Add to that the cost of post-release expenses. SaaS products are not one-time events; they must be constantly maintained and improved. When calculating the cost, everything from hosting services to updates and cloud storage must be considered.

4. Post release expense:-

• Many people believe that once a SaaS product is developed, it’s the end of the story and that there will be no more tasks. That, however, is not the case. Following the development phase, there are post-release costs for enhancements, hosting services, maintenance servers, databases, and integrations. As a result, the total cost of ownership (TCO) will be determined by these and the other factors mentioned above.

• In addition to these considerations, there are some hidden costs to consider. Let us look into them further in the following section.

Different ways to reduce SaaS Development Costs

1. Automation:-

• QA can take up to one-third of the time spent by programmers coding your app. You will be paying for the QA staff’s every working hour if your team tests manually. Errors are easier to detect when the testing process is automated. Spending some time in the beginning to create automated tests will save you money in the long run. These tests will be useful even after your SaaS product is released.

2. Outsourcing:-

• Startups are limited by their budgets and resources. In these cases, outsourcing can be advantageous for startup founders because it allows them to develop their applications at lower costs in markets where developer rates are lower than in their home markets.

3. Third-party services:-

• Third-party APIs can be used for a variety of features or functionalities, including payment processing, login, subscription management, and so on. Use third-party services instead of writing code from scratch for these features. It will help you save a significant amount of money.

4. Flexibility from hosting:-

• After you’ve defined your SaaS application’s specific requirements, look into cloud platforms and their prices and plans.

Conclusion:

• SaaS projects are more relevant than ever as they ride the popularity wave. They are universal, flexible, and increase business efficiency – the benefits are numerous. The SaaS model is particularly appealing to startups. The above-given information will serve as a guide for you to estimate your SaaS software development costs.

• To begin with, there is no need to spend money on supporting software with physical media. A good internet connection is sufficient for cloud services. Hire software developers if you are trying to get a fully functional solution for the growth of your business. The vast majority of SaaS programs are cross-platform, which means they can be used on a PC, smartphone, or tablet all at the same time. Because software development is highly customizable, there is an opportunity to experiment with the project’s format, features, and cost.

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