9 Steps in the SaaS Product Development Process

As the tech industry continues to migrate to the cloud, more businesses are adopting a SaaS product development process.

SaaS—which stands for Software as a Service—is the model for most modern software products, and for a good reason.

For one, SaaS applications can be accessed from anywhere with an internet connection, making it convenient for remote teams and employees to collaborate and work efficiently.

It’s also cost-effective. Developing a custom SaaS product reduces the need for expensive hardware, software licenses, and maintenance costs.

But what goes into software as a service development? This article looks at nine key steps in the SaaS development process.

What is SaaS?

In the Software as a Service (SaaS) deployment model, a third-party provider builds applications within a cloud infrastructure and makes them available to users via the internet. Many SaaS applications work on any device with an internet connection and web browser.

When SaaS debuted, it marked a radical change. Prior software products only ran on the local machine on which they had been installed. SaaS quickly led to Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) products.

Now, SaaS has mostly replaced locally installed software. With broadband technologies and 5g making internet speeds faster, more services and applications will migrate to a SaaS platform.

How Is SaaS Implemented?

There are three primary ways to implement SaaS solutions: Private, Public, or Hybrid Cloud.

Private Cloud

A private cloud involves a dedicated, on-demand infrastructure and resources used exclusively by the organization that owns it. Another term for a private cloud is “on-premises data center.”

The organization is responsible for the private cloud’s hardware, software, and security. Users must either be on-premises or connect remotely via a virtual private network (VPN) to access the private cloud.

Use cases for a private cloud include regulatory compliance, enhanced security protocols, or leveraging existing IT infrastructure.

Public Cloud

Public clouds have a shared, on-demand infrastructure and resources controlled by a third-party provider. They are generally where you find SaaS solutions, as well as IaaS and PaaS.

The biggest names in public cloud providers are Amazon Web Services (AWS) and Azure, but they have many smaller competitors.

Use cases for public clouds include young companies with no legacy infrastructure or outdated applications and smaller companies that can’t afford an on-premises data center or private cloud.

Hybrid Cloud

Hybrid clouds combine public and private cloud services when their on-premises data center alone can’t provide a consistent experience, or when they want to migrate from a private cloud to a public one.

A hybrid cloud approach benefits from elasticity and scalability, allowing companies to mitigate occasional heavy loads their private cloud can’t handle. A sample use case would be a retail business that sees increased demand during the holiday season. It doesn’t make sense to increase their on-premise infrastructure just to have it sit unused most of the year. A hybrid cloud arrangement lets them scale up their frontend from private to public cloud servers to meet the holiday demand, then scale back down after the rush.

Organizations migrating to a public cloud can use a hybrid setup to move systems over piecemeal, preventing a disruption of day-to-day operations.

The SaaS Product Development Process

Regardless of the type of cloud instance used, the following nine-step SaaS product development process helps ensure the creation of a high-quality product.

1. Conduct a Market Analysis

Before beginning SaaS platform development, product teams must shift their focus from what they’re developing to the users they’re developing it for. What issue does this SaaS product solve? Who is the target user? What differentiates this product from the competition?

At Taazaa, we start by researching and analyzing market share, market size, consumer trends, market demands, customer expectations, and more. Our market analysis identifies the end users’ key challenges, then looks to see if the competition is meeting those challenges.

Analyzing the market can identify any inconsistencies and weaknesses in the product concept during the early development stages. It’s a great way to test the team’s ideas and gather valuable insights into users’ unmet needs.

2. Gather the Fundamental Requirements

A SaaS product requires planning for privacy protection, security audits, customization options, and scalability.

Security is essential. With cyberattacks on the rise over the past few years, users have become increasingly concerned about the safety of their data. In response, governments now impose steep penalties for data breaches.

3. Estimate the Budget

The team should have enough information to estimate the budget at this stage. Their estimate will give the key stakeholders a realistic view of what the entire SaaS product development process will cost.

The budget includes the costs for the following activities:

  • Design
  • Coding
  • Business analysis
  • Customer support
  • Maintenance
  • Marketing

When budgeting, consider all possible challenges and setbacks that might impact the budget down the road. Unforeseen expenses could require a search for more funding in the middle of development, leading to unwanted delays.

4. Determine the Business Model

The business model needs to support long-term success and take into account the product concept, audience segment, and revenue goals. Whether it’s a one-time purchase, subscription-based, freemium, or something further off the beaten path, the business model must ensure the product has the best chance to generate the required revenue.

Common SaaS product pricing models include:

  • Freemium: Users can access a free version of the product with few (but useful) features, but they must upgrade to a paid plan to access additional features.
  • Pricing per feature: Users can pick the features they want to pay for.
  • Flat rate subscription: Users can access a set of features or the complete product for a monthly or annual fee.
  • Pricing per user: Also known as “seat licensing,” this model charges a monthly or annual fee for a set number of users.
  • Usage-based pricing: Users pay per minute or hour of usage.

A suitable pricing model depends on the target audience, product type, long/short-term goals, and other factors.

5. Define the Technology Stack

The technology stack is a list of all the technology services required for the development of a SaaS platform.

Different technology stacks offer advantages and disadvantages. The goal of this stage is to determine which tech stack has the right combination of tradeoffs.

Key technologies to consider include:

Frontend: Product engineers use popular frontend frameworks like Vue.js, Angular, and React to develop a SaaS product’s user interface (UI).

Backend: The backend makes the application work. It includes the functionality for building the business logic, creating databases to store the data, and so on. The tech stack for the backend consists of a programming language (e.g., Django, Node.js), a server (e.g., AWS, Azure), and a database (e.g., NoSQL, PostgreSQL, MySQL).

6. Develop an MVP

Once the team finalizes the technology stack, the next step is to develop a basic version of the SaaS product. This first version is known as a Minimum Viable Product (MVP).

An MVP is a simple but functional version of your product that solves a single, significant problem for your users. MVPs help reduce development costs, accelerate the product’s market release, and test the demand.

Teams use MVPs early in the development process to identify flaws in product design. They also aid in making critical development decisions and prioritizing features.

7. Test and Iterate

Once the MVP is built, it gets tested by a group of early adopters. The testing phase helps determine if the product concept meets the needs and desires of the targeted users.

By gathering user feedback early in the development process, the product development team can make the next iteration of the product better.

An iterative approach helps the development team correct their course early on. As a result, they can test the product’s viability before devoting too much of the budget to it. This approach also avoids missteps that lead to costly and time-consuming rework.

8. Check and Release the Final Version

With each iteration of the SaaS product development process, the product should get closer to meeting the business goals and customer needs.  In other words, it gets closer to the definition of done the team established at the project’s outset.

A clear definition of done and regular review of its application reduces partially finished work, wait times, and the cost of rework. It also gives the quality assurance (QA) team a list of criteria to be met as they test the product for defects.

Once the product passes the QA phase, it’s ready to be prepared for release. Depending on the product type, this could mean readying it for upload to a SaaS distribution channel. SaaS distribution channels can either be direct or indirect channels.

Direct distribution channels involve a company’s employees, staff, and technical assets. They contact and sell to the customer via phone, e-commerce store, or field representatives. Internal-only SaaS products may be distributed via a private cloud or the IT department.

Indirect channels include app store marketplaces, in-app purchases, resellers, professional services firms, and other technology providers.

9. Support and Maintenance

After the SaaS product is released, the support and maintenance phase begins. And maintenance, for a SaaS product, usually means continued iteration.

The SaaS product support team not only helps users resolve issues but also gathers more feedback and identifies errors and defects that need to be fixed. In addition, they help onboard new users.

Maintenance involves fixing errors and defects. It also helps identify opportunities to grow the product and add new features. By analyzing customer feedback, the SaaS product development team can look for ways to expand and grow the product.

Need Help with SaaS Product Development?

SaaS product development is a complex process, and this overview only scratches the surface. To build a quality product, you need a dedicated team of experienced product engineers, business analysts, QA experts, and so on.

The good news is that you don’t have to hire an entire SaaS product development team.

For a fraction of the cost of hiring an internal team, you can engage an experienced SaaS product development company—Taazaa.

Partnering with our SaaS product development experts allows you to build custom solutions, update your existing product, and integrate older systems and new applications—without overburdening your internal teams.

Achieve better performance and substantial cost savings. Outsource your SaaS software development needs to Taazaa. Contact us today!

Bidhan Baruah

Bidhan is the Co-founder and Chief Operating Officer of Taazaa. He is well versed in outsourcing and off-shoring, and loves building and growing startup teams. A true Apple lover, he loves trying different phones and tablets whenever he gets time.