SaaS App Development Services

Frequently Asked Questions

• What Is A SaaS Development Company?

  Software as a service (SaaS) is a delivery model in which a vendor develops a web application, hosts it in the cloud, and makes it available to end-users. SaaS is associated with the term "On-Demand". The on-demand software is not bought but rented to the client with payment regularly. The key to the economic viability of SaaS is economies of scale — the SaaS provider maintains a single software core that all customers use, and therefore spends fewer resources than managing separate copies of the software for each customer. In addition, the use of a single software core allows for computational scheduling and reduces the problem of peak loads for individual customers. All this allows SaaS solution providers to significantly reduce the cost of software maintenance. Ultimately, the recurring cost of services to the end customer becomes lower than the cost of the classic licensing model.

• What Are The SaaS Business Metrics That Matter Most, And Why?

  Customer Lifetime Value. The longer customers use the service, the higher their lifetime value.

  Customer churn. This indicator is measured by the number of customers leaving the service each month as a percentage of the total number of customers.

  Revenue churn, or the amount paid monthly by customers leaving the service as a percentage of total income.

  The cost of acquiring customers, or the sum of acquiring new users and how much value they can bring to the business. For a business to be financially viable, it must make more money than it spends, and SaaS companies are no exemption.

  Healthy SaaS companies:

  • receive at least 30% of their income from the expansion, which compensates for the inevitable churn;
  • have a lifetime value at least 3x higher than their client acquisition costs and reimburse acquisition within 12 months.

• How Much Does It Cost To Develop a SaaS?

  The cost of building a SaaS application depends on the complexity of the product, the technology stack you choose, and the number and skill level of personalities working on your project. Software development companies are more expensive than freelance developers but have more benefits. First, companies have more experience with complex processes than individual developers. Second, the company is fully staffed with specialists who should be involved in the development process.

  The most profitable is cooperation with an outsourcing development team. The development cost is usually lower due to the specifics of outsourcing, and skills and experience are not inferior to local software development companies.

  The price of the SaaS tool ranges from $15,000 to $100,000, and the SaaS platform will cost from $40,000 to $240,000. Developing an MVP with the fewest possible features will shorten the development time and lower your financial risks.

• What Is SaaS Architecture?

  SaaS applications and services typically take a multi-tenant approach in which one instance of a SaaS application will run on the host servers, serving each subscribing or cloud client. The application will work in a single version and configuration for all clients or tenants. Although all subscribers will work on the same cloud instance with a shared infrastructure and platform, their data will be separated.

  Standard multi-tenant SaaS architecture means the cloud provider can faster manage maintenance, updates, and bug fixes. Instead of making changes across multiple instances, engineers maintain one shared instance.

  Plus, multi-tenancy allows more people to access the app without compromising critical cloud-based features like security, speed, and privacy.

• How Does a SaaS Model Work?

  It is a software licensing and delivery business model where applications are centrally hosted in the cloud and licensed by subscription. The model is based on different subscriptions for various products or end-users and results in higher customer retention than other business models. However, in recent years, use-based, function-based layered models have been included. SaaS is subdivided into the following types:

  • Vertical SaaS - in which software is created for the needs of a specific industry.
  • Horizontal SaaS - the created products focus on a specific software category regardless of the industry.
  Most SaaS companies offer variable pricing structures and product functionality. The concept is that free products have limited features, while the premium option provides advanced features (and often additional bonuses). Customers can cancel, reduce or upgrade their package with more flexibility than direct ownership of the software.

• What Is SaaS Application Development?

  Software as a service is a complex software distribution model when third-party vendors develop applications and provide them to customers. For an equivalent monthly fee, business users get powerful online tools that can be accessed from any device. SaaS software updates are vendor-driven and typically occur with no downtime or shorter maintenance windows. The development of Saas applications has its technical characteristics that significantly affect the budget and requirements for the team:

  • Single or multi-user architecture (the first is safer, the second is cheaper);
  • Number of functions;
  • Integration with third-party services via API (almost 90% of SaaS solutions are integrated);
  • Service update frequency;
  • Monetization (onetime payment, individual packages, subscription);
  • Data security guarantees (higher tier is more expensive and may limit partner scalability).