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How To Build A SaaS Product?

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Planning to build your SaaS application? Now you can Download SaaS Product Development Guide and get a complete understanding of how you can get started. You can download it for free and read it anywhere, any time. 


You may be already using SaaS products even without acknowledging them. For the last couple of years, SaaS technology has become the talk of the town. According to a report, 86% of the companies will run using SaaS apps solely after 2022. 

Zoom, Google Docs, Trello, and Slack are a few examples that have changed the way businesses operate. So the question arises, how can you hope this train and build a cost-effective SaaS product faster? Is it a good idea to get SaaS product development, and how can it help you make money?

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SaaS Product Market Overview

No longer than five or ten years ago, SaaS products weren’t in-demand. However, today they are gaining popularity, and businesses are investing in SaaS applications. According to Gartner, custom software is the fastest-growing market in 2021, with a growth of 10.5% significant driver of this growth is the adoption of SaaS software.

Outsourcing Product Development has become not just a trend or the future of work but a present reality. To know everything about it, you can download the Outsourcing product development guide now!


Today Entrepreneurs are investing in SaaS, and after 2021 88% of business executives will do so. Building SaaS products in 2022 is a strategic move that is going to pay off soon.

According to Statista, the SaaS market in 2021 reached $145,5 billion and is estimated to be worth $171,9 billion by the end of 2022. Although the US market tops the list of SaaS markets, if we evaluate the market in the long run, then the Asia-Pacific region looks more profitable. 


Steps To Build A SaaS Product

Software as a Service or SaaS is a cloud computing model where software is delivered via the Internet on a subscription basis. In a nutshell, SaaS products allow you to save on costly hardware because the software is stored in remote data centers.

Google Docs is the best-known example. It is a web-based software office suite within the Google Drive service. Doing SaaS business is very competitive, but you don't have to build a cloud-perfect solution to get started.

If you want to know how to build a SaaS product, you need to explore the main aspects of this approach. Let’s guide you through the steps.

Read It Now- SaaS Development Lifecycle: Understanding The Stages & Steps 

Analyzing The Market

The first step you should consider is whether it is a good idea to build a SaaS product you have in mind. Analyzing the market segment will help you to break into it. Before you start building a SaaS product, understanding the market situation is an excellent choice. Ask the  right questions like:

  • Who is your target customer?
  • What are your customer’s pain points?
  • Who are your competitors?
  • What essential or unique features do the competitor's products have?
  • What business models do competitors adopt?

It will enable you to define the high-level market requirements. Then create a target market description that should be appealing to convince the users to choose your SaaS product.

The market analysis helps you explore business opportunities and analyze your competitors’ successes and failures.

The best example of a SaaS product is Slack. The SaaS-based platform generated $902 billion in 2020-2021. Slack has 12 million active users, and 156,000 organizations have subscribed to this platform. Thus, building appropriate strategies for SaaS product development will help you with a cloud solution that will be in demand.

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Developing A Business Plan

A business plan acts as a roadmap for your digital product development. Let us check the crucial points you should mention in your business plan to know exactly how to build a SaaS product.

  • Make a catchy sentence to describe SaaS products that will distinguish you from your competitors.
  • It is better to know the pain points of your potential customers and how your product will solve them.
  • Choosing a marketing strategy for your product promotion will help you read your target audience.
  • Also, define the monetary strategy for subscription plans, advanced support, and upgrades revenue from your SaaS products.
  • Finally, create a list of fundamental goals for the first few months of your enterprise.

The business plan will most likely be subject to change. But it is a prerequisite for making up your mind about how to build a SaaS product successfully. If you are unaware of how to write a business plan, then there are AI business plan generators for your rescue. Shopify is one of the best examples of cloud-based platforms today due to its mission, goals, business model, and product offering.

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Define Your SaaS Products Requirement

The SaaS products perform multiple tasks resulting in various features occurring in the SaaS development. But it has a core functionality that must be implemented in every SaaS product. Let’s highlight these essential requirements.

With Multi-tenancy, each customer shares the application instance and a single database. It is a cost-efficient option with lower maintenance and a larger computing capacity.

The self-service provisioning feature, established by automated processes, speeds up the procedure and makes it more consistent, stable, and scalable.

SaaS Security ensuring includes users’ data encryption and application security. It protects against various security vulnerabilities and security measures including identity management, access control, multi-factor and step-up authentication.

Read Now- Top Considerations When Outsourcing Product Development: A Cheat Sheet

User activity monitoring allows for tracking changes and preventing intrusion. It plays a significant role in data protection and dealing with integrity and access issues.

For more specific functionality, you may learn from your competitors. A  better way is to make a list of features required for your niche by reviewing the competitors’ SaaS products. Differentiate between core features that address customers' problems and nice-to-have ones.

HubSpot is an excellent example of a "fully integrated" SaaS company. The platform has products in every stage of the SaaS business model. 

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Choosing The Tech Stacks

The technology stack has the programming languages, frameworks, and tools used in SaaS product development. Nowadays, you may choose technology from a variety of options.

That is why the question arises of how to build a SaaS product and choose the right SaaS framework.  Yet another issue depends on the demands of your product. Thus, there is no answer to the question of what frameworks and tools you should choose to build a cloud solution.

However, you can aim to have a Mac VPS hosting and get a fast and secure cloud hosting experience reasonably.

Let’s discuss the required SaaS product development aspects and the most popular choices to cover them.

  • Front-end

Front-end development covers everything users see on the screens. For these purposes, you will need modern JavaScript frameworks that meet SaaS requirements – React, Angular, or Vue.js.

  • Back-end

Back-end development covers the charge of the server side. Being invisible to the users, it builds the core functionality of the SaaS product and formulates its responsiveness. Node.js is one of the reliable frameworks.

  • Database

Databases such as MySQL keep the necessary information for your applications. 

  • SaaS hosting provider

To host any SaaS requirements choose a reliable cloud provider such as Amazon (AWS), Google Cloud, or Microsoft Azure.


Also Read: Choosing Between Amazon AWS, Microsoft Azure, and Google Cloud 


Creating Your Core Team

The fate of a SaaS product depends on the team that works on it. What team do you need to build a SaaS product?

To bring a successful SaaS-based product into reality, you need to hire a team consisting of:

  • Business analyst;
  • Designer;
  • Software developers;
  • Quality assurance engineer, and
  • Project manager.

However, finding the right specialists sometimes is almost as hard as planning to build a SaaS product. Below we have shared three options you can count on:

In-house team- It may be the first thing that comes to your mind, but don’t jump to this conclusion quickly. Building a SaaS product is an excellent idea for companies that have already gained success and have a permanent current workload. Nevertheless, this approach enables you complete control over your development process.

Remote Developers- It is one of the cheapest options provided for remote developers. They have considerable expertise in specific fields and technologies. Choosing the right tool to communicate and discuss your business plan will help you build a SaaS product in no time.

Dedicated Team- It is an excellent way to outsource your product development. The dedicated team has a specialization in building SaaS products. The approach will fit companies of all sizes with different project scopes. Remote product development provides high-quality services with no need to manage their work and pay only for the actual work done. And when planning to build a dedicated team, outsourcing to India can be the best bet. You can easily outsource software development to the experts sitting there and get excellent products built in no time.  

Hire remote developers from India

Building An MVP

What should you do to launch a successful SaaS application and validate the value position? Creating an MVP is what you need. MVP development is an advisable stage of your SaaS product development.

MVP is not a fully-fledged product but has enough features to attract early users and validate an idea. At this stage, it can enter the market to scale further and amend.

Read Now- Minimum Viable Product: The Benefits of MVP Development

Although it is not an end product, it can solve your customers’ critical problems. With MVP development, you must appeal to your target audience and makes people love your product. The primary purposes of launching an MVP before developing a fully-functional SaaS product are:


Collect and analyze feedback from potential customers on usability and user experience. Test the waters as it allows you to check whether your application will suit the rapidly growing SaaS market and create enough demand for your product.

MVP gives the possibility to measure the effectiveness of business hypotheses. We recommend you create an MVP to quickly collect feedback, check the technical implementation of the idea, and demonstrate it to investors. 

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Why Should You Invest In a SaaS Product?

Although SaaS isn’t just the buzzword, it’s a new reality. The digital transformation took by storm all industries and businesses but it seems the pandemic has sped up the process. 

With an accession rate of 33%, businesses will be cloud-centric in less than two years. Therefore, it is an excellent opportunity to enter the SaaS market and establish yourself before it gets oversaturated. 

The most pressing matter bothering companies in creating a SaaS product is financial. How do SaaS products make money? Traditional software is sold upfront, while SaaS providers typically charge a subscription fee.

If you are to build a SaaS product, there are several revenue models you can consider: product development outsourcing CTAMonthly/yearly subscription

The most popular model today is a recurring monthly or yearly fee to access any SaaS product, for example, Adobe or Microsoft. Also known as “flat pricing,”  there are no defined limits to the usage. It is easy to track and sell, plan and predict.

Usage-based pricing

It is based on how much you use – simple as that. For example, Amazon Web Services charges you for the number of transactions and the gigabytes of data used.  Progressive payments stimulate long-term clients to upgrade their plans, and remission of fees during quiet months supports your image.

Also Read- Everything Startups Need to Know About Outsourcing Product Development


Freemium allows you to get a limited number of functions and pay for the rest. “Over” is a popular image editing app that uses this model. They have combined the free version with “pro” elements so that users can choose whether to pay for the subscription or stick with the limited version. It is a quick way to enter the SaaS market.

To create a SaaS product, you can adopt one of the above options to generate revenue. After all, SaaS products require a significant amount of maintenance, so your earnings should cover the costs of providing your service to the customer.


Benefits Of Building A SaaS Product

Let’s now discuss the key advantages of SaaS products that stimulate entrepreneurs and startups to build a new SaaS product and roll it to the market. We believe these benefits will bring you closers to realizing the primary steps to building a SaaS product.

Time and Cost Savings

Usage of SaaS environments doesn’t implicate your business to purchase a license as in the case of packaged software. When dealing with SaaS software, there are no hardware maintenance costs required. Therefore you pay for what you use. 

Facile Updates

SaaS products always provide end-users with the most up-to-date version of your software. It means customers do not need to update or install the latest version as done in the background. 

scope of work for software MVP

Recurring Revenue

SaaS technology allows your business to generate recurring revenue and always keep track of your monthly/yearly earnings, compared with multiple other business models.

It provides a subscription model that means your clients pay a specific fee each month or year, while other business models require constant user acquisition as most users pay a one-time fee for the software.

Once you attract a solid base of customers to your SaaS product that provides recurring revenue, you can focus on expanding and growing your business without any worries about your bottom line. 

On-the-Go Flexibility

The SaaS product subscription model allows you to up or downscale users in real-time. All you need is to upgrade or downgrade a subscription plan based on your users’ needs. Thus, you need to build a product that fits the current scalability of users.

This way, on-the-go flexibility is among the key advantages of SaaS product development that make your business easier.

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How Can Remote Developers Help Build Your SaaS Product?

The significant debate every company faces when developing new SaaS products and projects is: Should you hire a SaaS development company or hire remote developers?

 So, we have outlined a few pros to help you decide whether to hire remote developers or SaaS development agencies.

Lowers Overall Project Cost

Hiring a Software development company could lower the overall project cost for the client. The teams would consist of remote developers with varying levels of expertise. So, there is no need to overpay a senior developer if a junior developer can efficiently handle the tasks. 

In-Depth Involvement

As a result of the company culture, a dedicated team is more likely to become deeply involved in projects. Furthermore, they align their goals with the client’s needs.

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Defines The Project Scope & Requirements

A client can obtain help from the SaaS development company in determining the requirements and scope of a project. It can be advantageous for SaaS Development. It may be the client’s first project, but the outsourced company could have already worked on a similar project.

Help Scale The SaaS Project 

In addition to assisting with scaling your project,  managed product development companies can also provide IT consulting services. For example, if the company has already worked on a similar project, it could point out functionalities that should be improved or removed.

Better Legal Protection & Ongoing Support 

You have better legal protection when working with a product development outsourcing company. Unlike freelancers, SaaS development companies are registered and provide ongoing support to clients based on their project needs.

Get a Dedicated Team Manager

A Software development company usually assigns a dedicated project manager who knows every member’s skills, tech stack, pace, and strengths. Thus, hiring a remote manager would be more accurate for the project.

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Meet Deadlines Quickly & Efficiently 

Outsource companies can accurately predict the time and resources needed since they have a defined workflow. It is essential for SaaS founders who want to accomplish their goals on time and within budget. So, hiring a dedicated team or outsourcing SaaS development companies will be able to meet your deadlines if you work to a strict deadline.

Outsourcing SaaS Development has become not just a trend or the future of work but a present reality. To know everything about it, you can read the Hiring Remote Developers For Your SaaS Development blog now!


Smooth Communication 

Communications within the outsourcing companies are smoother and more efficient due to a division of responsibilities. Clients can communicate with an agency manager, who coordinates the team’s work.

Easy communication

Scale Up or Down Your Team Anytime 

With remote developers or a dedicated team, you can switch from one talent to another as the project evolves. They know the product well, so you will not have to transfer the knowledge and research. The rising popularity of remote work is not only great news for remote workers but also for entrepreneurs & CTOs looking to scale their businesses

How Can Classic Informatics Help?

Our recent clients include companies of all industries and sizes, and our talented developers have helped them create a unique products. With the help of our developers, the company managed to outstrip competitors in the market and occupy a profitable niche.

At Classic Informatics, we pride ourselves on our SaaS projects. In the course of the last 20 years, we helped companies to establish their own SaaS product and were able to accumulate extensive experience in that realm.

Developers at Classic Informatics are constantly improving their skills and are ready to provide technical advice for your product to reach the high-tech market.


The SaaS model has created a wide range of business opportunities. SaaS products are a good choice for multiple users because they do not require installation, configuration, and updates. The market for SaaS will be the fastest growing software market in the next five years. These facts pique the interest of entrepreneurs who want to create SaaS products and provide value to a larger audience. 


startup solutions

Topics : Product Development, Remote Teams, SaaS Application

Nivedita Nayak

Written by Nivedita Nayak

Nivedita Nayak is a technical content writer in Classic Informatics, a leading web development company . She is a passionate writer, and loves to write for IT Industry.

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