Recently, the Software as a Service (SaaS) industry has experienced exponential growth. At a projected annual growth rate of 18%, it is expected that the SaaS sector will top $623 billion by as early as 2023. For businesses and individual users alike, cloud computing has certainly proven beneficial in terms of scalability, security, upgrades, and lower cost.
But what does it take to actually build a SaaS product?
This article will give you an in-depth look at the SaaS model, highlighting its core advantages and providing insight into the development process of SaaS applications. And by following the 6 steps included, you can even build a SaaS application yourself, creating your own stable cloud business that can easily scale over time.
SaaS Products in a Nutshell
First off, let’s discuss why the SaaS licensing and delivery model is getting so popular so fast.
In a nutshell, SaaS products allow users to access a vendor’s entire cache of application software through the cloud, accessible via web or API. A product of cloud computing and the business industry, SaaS applications typically charge customers a usage-based subscription fee, enabling individuals and organizations alike to rent relevant software for however long they need.
How to Build Software as a Service (SaaS) in 6 Steps
Now that you have a good foundation of knowledge regarding SaaS products, let’s take a look at how to build one for your own business.
Step 1: Conduct Market Research to Find Your Niche
Perhaps the most important step in the whole process, researching your market will help you learn all about the current state of your industry, market rivals, and target audiences. If done the right way, some market analysis will define for you what kind of Software as a Service product to build, and how best to do it.
For instance, a good market analysis will uncover for you all the latest SaaS development trends—like implementation of artificial intelligence, and the rise of micro SaaS and vertical SaaS products. All of this is key information that will help you build a truly valuable SaaS product, capable of generating steady income and growing popularity with your end-users.
Step 2: Choose a Suitable Pricing Model
Choose wisely as you consider which revenue model to use for your SaaS product. Obviously, you want to build an application that will produce a stable income. But depending on which revenue model you go with, and what prices you set, the success or failure of your SaaS will likely hinge on this step.
To begin, determine an appropriate balance between the value you want your product to offer customers and the profit you want to make. The following are some popular SaaS pricing models you might want to consider:
- Per-user pricing charges customers based on the number of employees using the application.
- Tiered pricing offers a variety of packages with different features for different prices.
- Per storage pricing is a simple model whereby customers pay based on the amount of storage they use.
- Pay as you go charges users based on frequency of usage.
- Subscription pricing, or a recurring, standardized payment.
- Ad supported pricing generates revenue from advertisements rather than charging customers usage fees.
Step 3: Select Features for Your SaaS Product
To keep up with competition, make sure your Software as a Service product offers features not seen elsewhere. Start by identifying missing functionalities that customers want from your market, and then build a product that satisfies those functions. But remember, your market rivals are constantly developing new features and applications, so make sure to keep up!
Step 4: Choose the Right Technology Stack
Once you’ve defined the must-have features customers want from your product, it’s time to decide on the best technologies to implement them. At this point, new technologies are released by the day. So you’ll want to ensure that the technology you choose is suitable to provide scalable, reliable, and secure Software as a Service solutions.
Step 5: Choose a Good SaaS Product Development Team
Having a good team of software development specialists is key to building a SaaS app that won’t fail. There are a few ways you could go about hiring a great development team:
- Hire freelancers—although this approach is notably cost-effective, it’s also the least reliable, so consider freelancing carefully.
- Create an in-house development team—keep in mind, this venture is usually the most expensive.
- Outsource to a software development company—this option saves you from the aforementioned operating expenses while ensuring your product development process receives qualified oversight.
Step 6: Build Your SaaS Product
Finally, this last step will probably be the most exciting and complicated part. Actually building your Software as a Service product requires first a discovery session with your software development company to explore your subject area, functionality, potential bottlenecks, etc. Next, have your UX/UI design team create wireframes and clickable prototypes. This way, you can refine and modify your product to make it as good as possible.
Once you’re satisfied with your design team’s product, build a prototype of the product to test on a target audience. Analyze feedback. Make further modifications to satisfy customer demands. And finally, before deploying the written code, have quality assurance engineers perform manual and automated tests to work out any bugs or glitches.
If your SaaS product passes all tests successfully, you are ready to launch it. Transitioning to a workforce powered through SaaS applications can be challenging. That’s why many companies turn to business partners like KitelyTech, INC. for assistance. Call us at (800) 274 2908 to get help finding the right SaaS management platform to meet your business’s needs.