What is a SaaS product?

What does it mean to be SaaSy in the IT world? Software as a Service is still one of the most convenient ways to sell your product (if you are an entrepreneur) and use it (if you are a client). Gen X and Millennials can recall moments from the past when they had to buy separate CDs for every app and ask somebody to install it. The biggest problems were the lack of inbuilt memory and the long-running process of maintaining the program. I still remember how my local disc C turned red anytime I got a new program and how I could make coffee and clean my room while the app was installing.  Also, if the computer is RIP, you can say goodbye to the app as well!

It was hard for me as a little girl who only wanted a new game. What about large companies? For them, it was even harder to install every program separately. However, imagine it as if you developed the idea of how to solve these issues for the great market. You come up with a new CRM solution; even small businesses need it. They need a program that would fit in the computers of all workers and the one that would be easy to maintain. You make it cloud-based and available for everyone by subscription! You solve all problems at once. Well, except it was Salesforce’s idea 15 years ago. They were the first to create a SaaS product to share with the public. They gave rise to the software distribution model so that now we have Google Apps, DropBox, or Canva.


  • It is cloud-based and works on the web. There won’t be any files, folders, and docs on your computer. Once you pay, you get access to the app. However, you have to be connected to the Internet which is not a problem in 2020. Looks like soon they’ll connect wifi to the trees.
  • Subscription payment. To have access to these apps you will have to pay just as for the traditional installing software. However, comparing with on-the-premice products, you don’t have to give away one large sum at once. It is a subscription meaning it will cost you an affordable sum per month or per year. Also, providers allow you to try the app for a week or so and only then decide if you want to continue using it.
  • Constant service providers’ support. Once the access is permitted, you won’t need to care about updates. You won’t need to call to system admin at 2 AM and tell about settings problems. With the SaaS model, everything is the responsibility of the provider. All the updates will be completed automatically. People will view the latest version of the product without any redundant actions from their side.
  • Software-on-demand. To be considered SaaS, it should necessarily be SOFTWARE accessed on the Internet. Not any other type of information. People often wonder if Netflix is a SaaS model. Well, not exactly. The only familiarity is the subscription model. Netflix, HBO, Apple Music provide content: video, music, photos. You watch it, you rewatch it, and that’s all. It is a Content-as-a-Service model. Youtube a SaaS because users can download videos themselves. As soon as Netflix allows users to film their own movies and have it on their platform – it will become SaaS.

Types of SaaS products

  • Customer relationship management software (CRM);
  • Enterprise resource planning software (ERP);
  • Project Managing Software (like Trello);
  • Collaboration software (Slack, Microsoft Teams);
  • E-Commerce platforms (like Shopify);
  • Niche products (Youtube – for video sharing, Canva – for creating a design);

Benefits of building SaaS application

  • Saving time. It takes less time to set up and share a SaaS product online than sell software for traditional installation.
  • Easy integration with other SaaS offerings. Your clients won’t have to install other apps to integrate – only allow your cloud-based app to do so. It’s one of the things that makes you competitive.
  • Upgrades. There is no need to buy new versions of products every time. Once people subscribe they use the functions according to their plan. You renew all software at once and people always have access to the latest version of the product.
  • Set up. It’s quick. Most issues with installation and configuration are minimal because it’s cloud-based.
  • Accessibility. The users of your product only need a browser and an internet connection to start using your app. It’s maximizing the popularity of SaaS products. Simplicity is key.

How to prepare for the creation of a SaaS application?

  • Is your product different from competitors’?
  • Is your target audience broad?
  • Will your product satisfy their needs and solve their problems?
  • Is your product flexible enough to be working from the cloud?

If you answered ‘yes’ to all these questions, then it’s a sign your product has all prerequisites to be good for SaaS. It’s all about sales. If your software does not satisfy the target audience`s needs, people won’t pay for it. If they can access your competitors who offer similar conditions and better quality, they will not choose you. Do we need another Gmail and Yahoo? No, there are plenty of e-mail services that are off-the-competition. Will you succeed if you set up another search engine? No, we have Google and it’s more than enough. Do not reinvent the wheel.


Step 1. Conduct market analysis.

The chances are someone is already setting up a product that is similar to yours. Competition is what all businesses want to get rid of. However, at the launching stage, your “market rivals” are valuable because you can analyze their work, product, mistakes, and pricing. Also, you will more easily understand your target audience. Read reviews and ratings of your competitors’ products. Perhaps you will solve the problems of their clients, and in the future, they choose your company. Understand how and what for the customers use your app.

Step 2. Create a Business Plan

Or hire a business analyst to help you with it. This step, although not connected to the app development, is very important and you don’t want to skip it. Imagine as if you cook a dish without the recipe – it may be good. Still, it may end up with a terrible smell in the kitchen and a weird aftertaste. To avoid users’ weird aftertaste after your SaaS product, the business plan must take into consideration the market analysis, detailed information about the company, the value for the users, marketing strategy, monetization definition, and costs calculation.

Step 3. Choose the development team and the technology stack

A successful team creates a successful project. So hire a good one, which will help you decide which tools and technologies are better to use in your specific case. Usually, the team consists of a Project Manager, front-end and back-end developers, UI/UX designer, business analyst, and QA.

Step 4. Outline SaaS MVP

Do not expect to build a whole SaaS empire in the first months of your work. Begin with something small but valuable. Starting with a minimum viable product, you focus on the most necessary functions and features needed for your project to launch fast.


If your app has features that would satisfy the basic need of early users – then it’s an MVP. Why do you need it? Because you have to begin. It’s like a test drive. You launch your project with core functions and observe reactions to it. Then you add advanced features and test team as well. During all stages, you get feedback from your users and minimize the risk of investing too many costs in the wrong solution. Use it if you don’t know what set of features to implement.


  • audits the target audience;
  • proves the idea and concept;
  • reduces debugging and reworking time;
  • saves money;
  • generates the first revenue.

However, in this fast-paced world do not rely on MVP for too long. Minimal functions are only enough if your product is unique and there are no analogs.

SaaS product development life cycle

For a successful setup, you need to take your SaaS project through this cycle.

Envisioning. It includes market research, the creation of business plans, and the choice of architecture. It is a preparatory phase. The most important factor which affects the development life cycle is the choice of the cloud provider. There are Kamatera, ScienceSoft. Amazon Web Services, Microsoft Azure, Google Cloud Platform, Adobe… The choice is important because later it will be hard to rearrange the app to another cloud. Also, the security of your user’s data depends on the cloud.

Evaluating and planning. Here you formalize the requirements to your stakeholders and team. Then you create a project plan, set the deadlines, and evaluate risks. During this phase focus not only on short-term goals and MVP but also envision the future of your project in the long run.

Subscribing. Here you sign the agreement with your cloud provider, make final decisions about the architecture, design, pricing, concept, and features.

Developing the app. Then it’s time for testing and streamlining data synchronization. Finally, you can integrate support services. Remember? SaaS is about the complete providers’ support!

Operation. Now integrate the app into the cloud. Monitor the activity and performance.

Common elements needed for SaaS-based products

  • Security. The server is third-party, so some users may be concerned about their data. Make sure to implement security practices like End-to-end Encryption, Data Deletion Policy or API Protection. You can read more about SaaS security in our article.
  • Support channels. Be sure to include phones, emails, social media of the people to whom the user can refer in case of issues with the product or its delivery;
  • Free trial possibility. It is especially important if your product is expensive. Before giving away money people want to make sure the product will do the trick;
  • Analytics tools. To know that people are interested in your product and how often visit your website, you have to track the users` activities and the way they use your products;
  • Monetization. To get the profit from your software, you not only need to download it to the cloud and allow paying. You need to choose the payment format that would be enticing for your customers;

Product monetization strategies

  • Free Trial. There are two sides to this method. If the person needs your product in the long run, the free trial will be a good way of reassuring that it is worth paying an annual subscription. However, for those who need to perform one task, a free trial will be a good way of avoiding paying.
  • Freemium. Yes, you’ll give some of your software functions for free. However, you’ll save the best ones for the users who are willing to make a purchase. Sooner or later your free-user will buy the product or advise it to others.
  • Pay-as-you-grow. This model includes different payment offers. For example, you need CRM for your small company. It means only 5-6 people will use the software, and there is no need to pay for the expanded version of the product. In a year your company grows, and now you need 30 people working with CRM, you purchase another plan which allows more people to work with it. Many SaaS products include enterprise plan, where the possibilities of using the software are enormous. So, as your business grows, you pay more and get more.

Saas application development best practices

  • Salesforce – the first CRM leader in the world. They offer solutions for Small Business Nonprofit and Startups. They use a pay-as-you-grow model of pricing;
  • Youtube. You can use it for free, watching and adding videos. However, if you want to videotape covers to popular songs or make movie reviews, you’ll have to buy a license;
  • Dropbox and Google Drive. Use these file hosting clouds as long as you want, but when you need more memory, subscribe for a plan;
  • Grammarly. An app that checks the grammar and spelling for free. However, when you need additional functions like collocation improver and tone of voice detector – it proposes an annual or monthly subscription. It uses a freemium model;
  • Canva. It allows making designs for social media content. However, the stock of free pictures and fonts is limited. It uses a freemium model;
  • Zoho and Microsoft 365 – online office package with tables, docs, and presentations.

To unblock the additional features you must unblock your wallet, and it’s okay. SaaS developers and stakeholders not only present unique apps, but they also allow choosing a convenient payment solution and enjoy the constant support and updates.

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