Software as a Service is becoming an increasingly popular commodity with a wide range of benefits. SaaS software allows users to access advanced features without investing in full-fledged infrastructure for hardware/software setups that could be really expensive. Thus, there’s no doubt that the cost factor needs to be considered for developing SaaS software in the first place.

This article will explore different facets of SaaS development cost, the factors affecting it, and what you can do to reduce incurring these costs.

How Much Does SaaS Development Cost?

Saas Development can cost a lot depending on the scope of the platform being built. Typically, the cost ranges from $5,000 to over $50,000 for SaaS software development. The cost of hosting a SaaS service is an added expense beyond the development cost.

Various factors could determine how much a particular SaaS product will cost for development. These range from the features, integrations, and flexibility to many more aspects.

Key Factors Affecting SaaS Product Development Costs

There are various factors that can sway the development cost for SaaS products. Each of these factors affects the price differently and to different extents. Some of these are direct SaaS developmental costs for your project, while others are indirect expenses to complete the development.

The key factors that affect cost determination for SaaS development include:

1. Scalability and Connectivity

One of the main factors that come into play for your SaaS app development is how scalable and connected you want your platform to be. More robust software needs advanced levels of connectivity and should be highly scalable. Do you require additional storage capacity or multi-usage compatibility with your app?

How many systems do you need to be actively connected with for a smooth operation? This is one factor that would determine the cost.

2. Human Resources Involved in the process

The cost of developers, testing professionals, management and support individuals involved is a significant one. The level of experience and diverse skill set of the development team greatly determines the human cost for the entire development process. Depending on your requirements, every software project calls for a different set of skills from project managers, developers, architects, designers, and testers.

The per hour rate of junior, intermediate and senior level professionals vary greatly and forma significant part of the total SaaS development project budget.

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3. Multi-tenancy and Customization

Multi-tenancy refers to the ability to run independent instances of your app in a shared environment. This is often required with SaaS platforms to allow users to use multiple instances simultaneously. The more robust you need your system to be in this aspect, the more expensive it usually gets.

Adding customization options is another factor that can affect the cost. Making this flexibility available requires more groundwork on the infrastructure end. Thus, your requirements of what you wish to offer with your SaaS software determine a lot.

4. Features and Configurability

This aspect is quite apparent. You pay for the features you want built-in and how complex your system is going to be. Listing out your most essential features and running a cost to quality analysis on them can be an exciting way to weigh out which features are the most essential for you to have.

Do you want your system to be flexible and configurable to new settings depending on your use case? These are some aspects that can shoot up the overall cost of development.

5. API Integrations and additional features

In the end, a particular business might have the requirement for specific API integrations for the backend. While many fundamental features are built from scratch, some SPI integrations boost scalability and reduce cost as well. Any additional features that you might want to accommodate will have their own cost, adding to the total.

However, bringing out features from robust API integrations can be an excellent way to go easy on your budget while also making the process quicker.

6. Recurring Costs and Overhead Cost

Another aspect of collecting expenses is through any costs that are recurring. Marketing, advertising, and maintenance for your SaaS software are some aspects that yield recurring costs. While these are technically not developmental costs, these add up to expenses during the developmental stage. There are also various overhead costs, including accounting and legal costs, that can affect the overall cost of SaaS software development.

Different Phases of SaaS Software Development And Costs

Well, even different phases of SaaS software development have contrasting costs associated with them. Again, both technological costs and supplementary ones such as those for hiring developers, the time taken to finish a phase, etc., come into play here.

Here are the primary phases for developing a SaaS software that can be explored with these six phases mentioned below:

1. Ideation Phase

• This is the phase where market research is carried out to understand what you want to include in your SaaS application.
• While ideating a variety of departments such as tech stack, functionality, software capitalization, market opportunity, and several others are considered. Identifying the central demand for your SaaS application is pivotal for narrowing down the developmental requirements.
• Consumer research and possible integrations with any existing systems are also considered to understand the gaps that need to be bridged and new features that need to be introduced into the system.
• The costs during the ideation phase range from $1500 - $3000 per week. Typically ideation and discovery last for 2-4 weeks or more, depending on the scale and complexity of the project.

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2. Planning Phase

• The planning phase overlaps with actual planning and product discovery after the ideation and basic discovery process. This is where an MVP or minimum viable product is first defined with all the key features in mind.
• Some key decisions regarding your SaaS product need to be made at this stage. This includes refining essential features, removing old redundant features, discussing the technologies that would best fit the idea to be implemented, etc.
• Different tools to be used, the scope for advanced features, high-demand and high-priority features, and the timeline of development are some factors laid out during the planning phase.
• The cost of the planning phase ranges from $1500 to $5000. You can usually carry out planning and product discovery within 2-4 weeks.

3. Designing Phase

• The design, development, and testing phase follow the planning phase. The SaaS app design is prepared and finalized during the designing stage. The user persona is considered to finalize this aspect.
• UI/UX designers are employed to come up with a functional, robust, and user-friendly design for the SaaS software. If it involves rapid user-interactions special attention is paid to the appearance and navigation options as well.
• The design phase also involves shortlisting the SaaS architecture tech stack. The tools and frameworks to be used along with libraries to be integrated are considered for this.
• The design phase can cost you up to $6,000 - $10,000 per month. Depending on the complexity of the project, this phase could take anywhere from 1-to 2 months.

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4. Development Phase

• The core developmental phase involves front-end development, back-end development, development of mobile frameworks, hosting on cloud, integrating databases, and operation with servers. There are different ways to prepare your business for hyper-growth via robust SaaS development.
• Functional development, cross-platform functionality, APIs and integration automation, and other aspects come into play during the developmental phase.
• Rapid application development is carried out for an iterative development process in an agile environment. Developing, deploying, and synchronizing different aspects of your software are carried out herein.
• The cost of the development phase can range within the wide bracket of $15,000 to even over $80,000, depending on how much you’re looking to develop from scratch!

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5. Testing Phase

• The developmental phase is followed by the testing phase, which is a crucial part of SaaS software development. After complete testing and iterative improvements, the final product can be ready for deployment.
• Functional testing, testing aspects of user experience, robust performance testing, and security testing are carried out iteratively to ensure the product functions properly. Security testing with TLS and SSL protocols is carried out before the product is rendered fit for business use.
• Compatibility testing is also carried out to ensure that the product is compatible with environmental changes and dynamic data sets. A/B testing for a SaaS product is equally essential to rule out any technical issues or logical or design-based issues.
• The testing phase is exceptionally crucial and exhaustive. The cost during this phase can range from $5000 - $10,000 or more, depending on the scale of the project.

6. Deployment and Maintenance Phase

• Last but not least, efficient deployment and maintenance of your software product ensures that the specifications of the project have been met and it is ready for active use.
• Different regulatory, legal, and compliance measures need to be considered as well as the security aspects for business use. A health analysis of your product can be great before you boost the marketing and advertising process pre-deployment.
• After deployment, specific issues need to be addressed, with changes made continuously as per customer feedback. This comes under the maintenance phase of the product. The application is thus updated, improved, and optimized for better use with maintenance and support.
• The cost for this phase can range from $10,000 to $20,000 or more, depending on the backend services you opt for and the extent of maintenance carried out within a certain period.

Methods To Reduce SaaS Software Development Costs

Now coming to the part you’re here for! It has been established that SaaS software development can be quite expensive for service providers. However, there are various considerations that can be made by the SaaS company to reduce the cost.

Here are some methods that can be pivotal to reduce SaaS software development costs:

1. Automation

Introducing aspects of automation can significantly reduce manual effort and errors while also reducing the development cost significantly. Many tests and data migration processes can be automated during the process of development. Automating different aspects of your SaaS software also helps eliminate costs from recurring tasks, which could be managed on a loop through automation.

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2. Balancing Costs using the Onshore-Offshore Model

The onsite-offshore model is a hybrid product delivery model which functions as a combination of the onsite and offshore models. It’s also commonly called the onshore-offshore model. Onsite/Onshore refers to outsourcing a task within a city/country while Offshore refers to outsourcing abroad.

SaaS development in India offers an advantage with onsite-offsite software development to optimize results and costs depending on which tasks can be managed with or without outsourcing. Balancing your costs using the onshore-offshore model is key to minimize costs for SaaS software development.

3. MVP Development Strategy

The MVP or Minimum Viable Product strategy is another avenue to cut costs and buy yourself more time for building a more advanced platform. MVP refers to building and integrating only those features that you know your current customers will use. Adopting minimal features ensures no wastage on complex development while it can be easily integrated at a later stage when there is a demand for it in the business.

Relevant Read: SaaS MVP development guide for startups

4. Cloud Backends

Employing cloud backends or BaaS (Backend-as-a-Service) is a sort of inception with your SaaS to save money. The same concept of using a remote cloud service model with only the need to maintain the frontend helps you save high costs while also helping you focus on making the frontend better for the consumers.

5. Third-Party Integrations

Developing SaaS from scratch in itself is quite an expensive and time-consuming process. Third-party or API integrations can help reduce development time and costs. Contrary to what many believe, using APIs can actually be pretty robust for efficiently scaling your system at a later stage. Thus, it is one option to reduce your SaaS software developmental cost that you must surely consider.

Hiring A Freelancer Vs. Software Consultancy

There are two primary options for anyone looking to hire for SaaS software development. You can hire a software consultancy to develop your software or get a freelancer on board to build your application. There are some key differences between the two options.

If you go for a freelancer, you can hire one flexibly for a patch code for your software or hire one on a need basis. Freelancers tend to charge less for independent services and often offer singular services separately. However, when developing a full-fledged SaaS platform having a consultancy or agency to see through the process seems more promising.

While a consultancy tends to charge more for a complete package of services, you have more control and customization options to integrate with your platform. All dependencies within the system can be developed systematically with continued support for any troubleshooting that occurs even after implementation.

If you’re looking for a complete software development package, contact our experts and learn how our SaaS software development services can fulfill all your ideation and implementation requirements.

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Final Words

We hope this post gives you the much-needed insight into the different layers of cost that are incurred in the extended process of SaaS software development. Planning the cost aspect of SaaS software development ensures prompt accounting for your business and makes sure you operate within your budget.

A good software development consultancy can help make your process smooth and more streamlined. With the right experts backing you, an optimum strategy for software development can be created to minimize high costs.

Sofyrus is a premium option for your business and developing your software product. Looking for advanced SaaS software development services? Reach out today to begin!