The rapidly developing Software as a Service (SaaS) industry is expected to reach a market worth of $247 billion in 2024, which is quite an amazing number. On top of that, companies these days are using an average of 112 different SaaS tools.

If you're aiming to break into the market with your SaaS app, now's the perfect time. But, to truly succeed, more than just another SaaS solution must be offered—instead, you need to solve unique problems with a product that's both safe and high-quality. As you can see, you need a great idea backed by thorough market research and followed by a well-polished SaaS software development process. Keep reading to discover how to make that happen.

How do SaaS and software development processes differ

SaaS (Software as a Service) and traditional software are pretty similar. SaaS is just the next step in the evolution of conventional software.

SaaS applications use a multi-tenant architecture and are stored in the cloud for online access. They scale effortlessly, offer a fantastic user experience, and come with perks like stronger security and frequent updates.

Traditional software, on the other hand, often has a single-tenant architecture. It is stored on local servers and has to be updated and maintained manually. At the same time, it doesn’t require frequent updates and is usually tested more extensively before the release.

Key steps of SaaS application development

There’s no one-fits-all approach to building a SaaS product. Every company has its own method, dictated by its resources, size, and the specifics of its app. Even so, there are common steps in the SaaS development process worth sharing. Use them as a foundation and tweak to fit your needs.

Idea generation and validation

Every creation process starts with generating and validating ideas. First, you come up with ideas and discuss them with the development team. Second, you check if the idea is viable before investing time and resources into SaaS application development. The second part is essential for the product’s success, as lack of market need is the main reason why startups fail.

The initial idea validation is usually up to you. At the same time, if you’re collaborating with a partner for SaaS software development, they can take care of the technical aspects.

Here’s what the process of idea generation and validation looks like:

1. Generate the SaaS application idea.
2. Conduct a thorough market analysis.
3. Identify business opportunities and requirements.
4. Decide on short, medium, and long-term business strategies.
5. Assess the cloud architecture.
6. Negotiate with potential investors and collaborators.

Defining features and requirements

The next step of the SaaS application development process is to figure out which features make your solution stand out. At the previous stage, you’ve already conducted a competitive analysis to understand what customers want. Now, it’s time to use this knowledge to figure out what you can offer them.

Here’s how to do it in a way that would benefit both you and your audience:

1. Identify your business goals.
2. Identify user needs.
3. Write opportunity statements.
4. Brainstorm feature ideas.
5. Prioritize features, considering customer needs, impact on your core value, and feasibility.

Every SaaS development process focuses on essential features that are based on the app’s type. However, the common must-haves usually include:

• User authentication
• Data security
• Intuitive user interface
• Customer support

Choosing the right monetization model

At this step of the SaaS application development process, you need to select the right revenue model. It’s important to balance here: your product has to offer value to your customers and have competitive pricing, and at the same time, you need to get fair compensation.

The most common pricing models are the following.

Tech stack and design

At this point of SaaS application development, it’s important to define the SaaS tech stack for your product. It is usually based on project requirements, scalability, team expertise, and cost.

The most common programming languages and frameworks include:

• Front-end: JavaScript, with frameworks like React, Angular, and Vue.js.
• Back-end: Node.js with Express.js, Python with Django or Flask, Ruby on Rails, Java with Spring Boot, and PHP with Laravel.
• Databases: PostgreSQL and MySQL, with MongoDB or Redis for NoSQL needs.

High-quality UI/UX design is also essential for SaaS application development. It focuses on two main parts:

• UX (User Experience): ensuring users can easily navigate your app.
• UI (User Interface): making your app visually appealing and intuitive.

Keep in mind that every single element, from icon to button, adds to the platform’s features. While designing a button might be a quick and easy task, it also takes logic and integrations to make it work.

Coding and testing

Now, it’s time to develop a SaaS application. This process usually consists of several stages.

• Design. The designer creates the UX/UI design files.

• Back-end development. The back-end engineer writes the code to make features work.

• Front-end development. The front-end developer adds the design to the server and connects it to the back-end. Testing.

• The QA tester (or a team of them) runs tests to find and fix bugs.

• Project management. The project manager coordinates everything and keeps the project on track.

Companies can have very different approaches to the SaaS development process. Some of them use a fixed-price model and work with a set team and clearly defined scope of work. The others opt for a time-and-materials approach instead: according to it, the team and the scope are adjusted as needed. The first approach grants owners and team leads more clarity as both the team and the deadlines are easy to understand. The second can be a better option for companies who aren’t sure how much time it will take to finish the development process: it could wrap up quicker or take longer than initially expected.

Also, some companies prefer to test after the product is completed, while some do the testing at every step of the development process. The second testing approach is more reasonable as it allows you to spot bugs and fix them immediately, therefore speeding up the delivery time and potentially saving costs.

Launch and maintenance

Congratulations! You’ve built a SaaS application. Now it’s time to help your product go live and ensure that it will receive all the necessary ongoing care.

Launch is the process of officially releasing the product to users. It requires smart marketing and promotion to get users interested in what you have to offer and encourage them to try your SaaS app.

However, the work isn’t done after launch. You still need to ensure that the product runs smoothly—you can do that by monitoring it, fixing bugs, adding new features, and updating it based on user feedback and changes in technology.

As we’ve already mentioned, the SaaS application development doesn’t necessarily end here. Maybe you’d want to scale your solution in the future, which would require additional steps, such as new analysis and preparing the scaling process. However, such steps would depend on your company’s needs and the app’s capabilities.

The main challenges of the SaaS software development

No one develops a SaaS application thinking that it would fail. At the same time, failure is still a real thing, especially in today’s competitive market. To avoid this, the main challenges of the development process must be considered and addressed.

Scalability

When your app succeeds, more and more users start using it. If you don't plan for scalability or handling the increased load, this can result in worsened performance and, in turn, the audience’s frustration.

To prevent it, design an architecture that scales efficiently, manages database performance, and optimizes server resources.

Security

Security is especially important for apps that deal with sensitive data, such as medical records, bank information, and so on. Data breaches increased by 72% between 2021 and 2023, and it can explain why more and more people are reluctant to share their data with the companies.

That’s why nowadays it’s even more important than before to prioritize user data protection and make sure that your app complies with all regulations. This can be achieved with use of encryption and secure authentication methods. You also need to conduct regular security audits as well as keep yourself updated on the latest threats in security.

Integration

Your app has to support integration and seamless work with other systems and third-party services. You can achieve this by managing APIs, handling data synchronization, ensuring reliability, and maintaining performance during integrations.

User experience (UX)

An interface should be intuitive, engaging, and meet user needs. While it might seem simple to achieve, in fact, it requires thorough user research, iterative testing, and feedback. You need to balance complex functionality with simplicity and design for ease of use.

Updates and maintenance

Even if your app doesn’t intend to scale anytime soon, you still need to update it regularly. This is necessary to fix bugs, add new features, and improve security.

However, with it comes another challenge—all the updates have to be smooth, with little downtime and as few bugs as possible. You can minimize the risks by ensuring backward compatibility, handling user feedback effectively, and keeping up with technology advancements and regulatory changes.

Bottom line

The SaaS industry is rapidly growing, and you can still join it and succeed in it. But to do this, you need to approach the SaaS software development process properly.

Designing a SaaS app involves brainstorming and confirming your ideas, choosing the necessary features and a monetization model, selecting the right tech stack, and concentrating on UI/UX design. It also requires coding, testing, launching your app, plus maintaining it in the future. Follow the steps listed in this article and address the most common SaaS development challenges to ensure the success of your product.