What is SaaS Software Development? Process, Tools, & Challenges

Businesses worldwide are embracing SaaS solutions for diverse operational needs, including tools for customer resource management (CRM) and enterprise resource planning (ERP), among others. Developing SaaS applications is often part of the key strategies for businesses to scale. However, building a SaaS application from scratch or transforming existing business solutions into SaaS requires deep expertise in the specifics, technologies, and other core areas of SaaS development.

In this blog, we do a deep dive into the SaaS development process to help you understand what SaaS technology is, the common types of SaaS apps, the advantages of creating these applications, the required tools, the development challenges, and more. Upon getting a good grasp of these concepts, you can successfully transform SaaS’s technical advantages into actionable business growth opportunities.

Let’s dive in!

Successfully creating SaaS applications requires businesses to understand what a SaaS environment is. Let’s look at what SaaS is, how it works, its architecture, and apps.

A SaaS (software-as-a-service) application is a cloud-based software delivery process comprising customized and flexible features based on customer requirements. Using these features, businesses can access data from web browsers and other devices through the internet and power their application to meet customer needs.

The on-demand, subscription-based nature of SaaS frees businesses from having to install apps locally on devices and spending resources on upgrading their hardware to run the applications. This cloud-delivery model involves a software provider who hosts the SaaS application and its data via servers, networking resources, or databases. The application becomes accessible to any device with internet access, freeing companies from the software’s installation and maintenance costs.

This cost-effectiveness and flexibility of SaaS applications is why SaaS development is currently at an all-time high. The SaaS application market is projected to reach $197 billion by the end of 2023 and $232 billion by 2024.

SaaS services and applications generally operate on a multi-tenant approach, meaning one instance of the app runs on the host servers. This particular instance serves each subscribing cloud tenant or customer, and the app runs on a single configuration for all customers or tenants.

This multi-tenant approach allows the single infrastructure to serve various customers while every tenant’s data remains secured and isolated. There are two ways this can be implemented through SaaS development:

• A single app instance and database: With this strategy, every user entering the cloud environment will access a mutual database. This approach is easily usable but poses scaling limitations that can hamper the SaaS app’s overall performance.
• A single app and multiple databases: With this strategy, databases are filled up to a specific point before users get redirected to a different database. This approach allows users to access more resources and makes the software more responsive. But, this strategy is costly and requires more resources.

Multi-tenancy is the most common architecture companies use for SaaS software development. However, other architecture approaches, such as single-tenancy, horizontal SaaS, and vertical SaaS, serve more niche organizational purposes.

Based on the industries, SaaS applications can be classified into the following types:

• CRM: CRM (customer relationship management) platforms like Zoho, Salesforce, and HubSpot are used for customer data and operations management.
• Communication tools: Communication tools are also some of the most prominent SaaS examples, such as Slack. Such apps allow companies to choose a subscription plan based on team size and provide freedom to switch to more advanced plans, offering scalability and flexibiltiy.
• ERP: Most companies also opt for ERP (enterprise resource planning) systems commonly built through SaaS development. ERPs built using the SaaS business model allow companies to pay as they go, personalizing the ERP’s features to their current business goals.
• Accounting: While accounting and billing SaaS applications aren’t highly personalized to the business industry, they offer flexible pricing packages for companies to pick comfortably.
• Project management: Jira, Monday, ClickUp, and other project management tools are typically delivered as SaaS applications as well.

Given how robust SaaS solutions are, there are many benefits to developing SaaS applications. The most prominent ones include:

The SaaS environment makes distribution as easy as possible, whereas the traditional model requires users to install and update the software themselves. One of the best examples is Jira, which allows companies to buy a subscription and use Jira online without having to install or update it in the near future. Hence, SaaS software development enables companies to deliver and utilize applications without investing in installation and maintenance.

As mentioned earlier, SaaS has a multi-tenant architecture, which is usually hosted in shared environments. Here, software and hardware license costs are lower than traditional models, allowing companies to save costs significantly.

Moreover, companies can rapidly increase their user base as SaaS development allows them to use software that they wouldn’t otherwise use due to high licensing costs.

Most SaaS providers offer flexible pricing plans, allowing companies to start small and scale as their business grows. These plans are ideal for those undertaking the SaaS development process as they can accurately tailor the application’s features to the chosen subscription plan based on the user requirements.

One of the most significant advantages of developing SaaS applications is creating a system that can be easily changed whenever necessary. With traditional applications, businesses would have to wait for developers to deliver and install updates. However, SaaS allows teams to tweak seamlessly as the entire development cycle runs on the cloud.

Moreover, the application’s development on the cloud also frees companies from investing in extra hardware to build an on-cloud infrastructure. Users simply need an internet connection to access the application from anywhere, and developers can make feature changes without any hassle.

Delivering solutions through software-as-a-service is also lucrative, making sales profit and volume highly predictable. This is because the application’s users will either purchase a monthly subscription or an annual one directly. Hence, companies don’t need to spend hours analyzing and predicting the application’s sales performance and volume.

Traditional software development is often subject to performance bottlenecks due to delayed response times or delays when developers try to access data from a remote server. With SaaS development, companies can easily overcome these hurdles. All activities for a SaaS application happen on a unified central server, cutting down on lag times in communication between the system and its multiple users.

All the reduced timeframes and costs we’ve mentioned above make SaaS easy to deploy. This is SaaS development’s primary advantage over conventional software development, allowing companies to build and deliver products to their target markets rapidly.

In SaaS, both providers and users win as the former centrally maintain, update, and deliver features in the cloud. This on-cloud approach decreases software maintenance costs and enables companies to deploy services like cloud analytics hassle-free.

Given SaaS's benefits, it’s no surprise that numerous companies are diving head-first into SaaS development. However, to do so, companies must choose the right SaaS development platform, be it for database management, containerization, version control, or the ideal programming language for building a SaaS solution.

Here is a complete list of industry-standard tools used for building robust SaaS applications:

• JavaScript and Node.js: JavaScript is one of the most versatile languages for building interactive and dynamic web applications, making it a top pick for developing SaaS applications. Node.js further extends JavaScript to the server side, enabling full-stack development with a single language. Plus, Node.js is widely used for its efficiency in microservices and real-time web applications.
• Python: Python is renowned for its versatility and readability, making it a popular choice for delivering various SaaS applications, including data analysis, web development, machine learning, etc. Along with Python, developers commonly use popular frameworks like Flask and Django for efficient web development to deliver through SaaS.
• Ruby on Rails: Known for its robust and developer-friendly nature, it is commonly used for SaaS development. Its CoC (convention-over-configuration) principle simplifies development by following best practices, making it ideal for rapidly deploying web applications for SaaS.
• React: React, a JavaScript library, is another ideal choice as it helps create interactive and responsive front-end components in SaaS applications. Moreover, React enables efficient component-based development and UI updates, allowing companies to deliver robust SaaS solutions seamlessly.

• Visual Studio Code: VS Code is an open-source, highly customizable integrated development environments with numerous extensions for different programming languages. VS Code also offers an excellent Git integration and integrated terminal, making it popular among developers for building SaaS solutions.
• PyCharm: Built by JetBrains, PyCharm is an IDE designed for Python development. PyCharm offers debugging, code completion, and integrated testing for Python projects, making it ideal for building Python-driven SaaS development.
• IntelliJ IDEA: A powerful IDEA geared towards Java development, IntelliJ IDEA supports various JVM languages and offers intelligent code refactoring and analysis tools. Hence, many developers use IntelliJ IDEA to build enterprise-grade SaaS applications.
• Eclipse: Eclipse is another popular open-source IDE that developers use for its extensibility. Eclipse supports various programming languages through specialized versions like Eclipse PDT for PHP and Eclipse IDE for Java. Moreover, Eclipse has multiple tools and plugins to simplify SaaS development in different programming languages.

• MongoDB: MongoDB is one of the most popular database management tools for SaaS solutions, mainly due to its scalability and flexibility. This NoSQL database scales effortlessly to handle large volumes of semi-structured or unstructured data commonly seen in SaaS applications. Moreover, MongoDB offers high availability and robust scaling capabilities, which is why it's heavily popular among SaaS developers.
• Amazon RDS: A managed database by AWS, Amazon RDS supports a range of relational databases like PostgreSQL, MySQL, and SQL Server. Amazon RDS provides scaling, automated backups, and boosted availability, significantly reducing database administration overhead when developing SaaS applications.
• MySQL: MySQL is an open-source relational database management system (RDBMS) widely used in SaaS development for its performance, reliability, and extensive community support. Plus, MySQL comes with features like replication for data scalability and integrity, along with ACID compliance.
• PostgreSQL: A powerful open-source RDBMS, PostgreSQL is widely known for its advanced features like JSON data support, custom functions for extensibility, and robust data integrity. PostgreSQL is often used for building complex SaaS applications that need efficient database management.

• Docker: A leading containerization platform, Docker seamlessly packages applications and their dependencies into containers. It also offers consistency in deployment and development environments, enabling robust scaling of SaaS applications.
• Kubernetes: Kubernetes helps to automate container deployment, management, and scaling. It ensures load balancing, high availability, and automatic container scaling, making Kubernetes vital for managing complex, containerized SaaS solutions.
• Elastic Kubernetes Service (EKS): Offered by AWS, EKS is a managed Kubernetes service that simplifies the management and deployment of Kubernetes clusters on an AWS infrastructure. EKS also integrates with other AWS services, making it ideal for SaaS development in the AWS ecosystem.
• OpenShift: Designed by Red Hat, OpenShift is an enterprise Kubernetes platform that extends it with developer-friendly features like CI/CD pipelines and source-to-image builds. OpenShift is ideal for companies seeking enterprise-grade containerization solutions for developing SaaS applications.

• Jenkins: Jenkins is one of the most popular CI/CD (continuous integration and continuous deployment) tools for SaaS software development. It’s an open-source automation server that enables seamless building, testing, and code deployment. Plus, Jenkins provides various integrations and plugins, and is extremely customizable and adaptable to changing SaaS development needs.
• CircleCI: A cloud-based CI/CD platform, CircleCI prioritizes simplicity and speed, offering caching, parallelism, and Docker support. CircleCI enhances the efficiency of CI/CD pipelines, making it ideal for teams wanting a scalable and fast CI/CD solution for the SaaS development process.
• TravisCI: TravisCI is another cloud-based CI/CD tool designed for ease of use. TravisCI integrates seamlessly with GitHub repositories and automates testing and deployment, making it well-suited for SaaS-driven open-source projects.
• GitLab CI/CD: GitLab CI/CD is a part of the GitLab DevOps platforms that offer an integrated CI/CD solution. GitLab CI/CD is widely used for its versatility of features, including issue tracking, version control, and CI/CD pipelines in a single platform. Thus, it’s ideal for companies wanting an all-in-one DevOps solution for their SaaS development needs.

• Nessus: Nessus is one of the most popular vulnerability scanning tools that helps detect server, network, and application issues during SaaS development. Nessus comes with extensive vulnerability assessments and supports compliance checking, making it ideal for assessing the security posture of a SaaS infrastructure.
• OWASP ZAP (Zed Attack Proxy): OWASP ZAP is an open-source security testing platform companies use to detect vulnerabilities in Saas-driven web apps. OWASP offers automated scanners and a range of manual testing tools, making it ideal for detecting and mitigating security threats in SaaS applications.
• Burp Suite: A popular web vulnerability scanner, Burp Suite offers robust security testing and is mainly used to detect and test common web app security threats, including those specific to SaaS applications.
• Auth0: Auth0 is a cloud-based IAM (identity and access management) platform that offers secure authentication and authorization services, including SSO (single sign-on) support, MFA (multi-factor authentication), and social login integration. Many companies use Auth0 to secure user access during SaaS development and protect sensitive data after deploying the application.

• AWS: AWS (Amazon Web Services) is the leading cloud provider with many infrastructure services. AWS is ideal for companies seeking scalable SaaS software development, as it offers services like S3 for object storage, EC2 for virtual machines, and Lambda for serverless computing.
• GCP: The Google Cloud Platform offers a suite of excellent cloud services, including BigQuery for data analytics, Cloud Functions for serverless computing, and Google Kubernetes Engine (GKE). GCP also comes with robust data processing and machine learning capabilities, making it one of the foremost cloud platforms companies choose for their SaaS development needs.
• IBM Cloud: IBM Cloud brings a range of cloud solutions and services for developing SaaS applications, including IBM Cloud Functions and IBM Cloud Kubernetes. IBM Cloud is designed explicitly for enterprises needing multi-cloud or hybrid solutions to deliver innovative SaaS solutions.
• Microsoft Azure: Microsoft’s cloud platform, Azure, offers various services, including Azure DevOps, Azure Functions, and virtual machines. Moreover, Azure seamlessly integrates with Windows-based applications and provides excellent enterprise-grade solutions for undertaking SaaS software development.

The SaaS development process can be tailored with special stages as per business objectives. However, the process typically comprises a checklist of the following seven steps:

Product ideation remains at the foundation of creating a SaaS application. Hence, it’s the very first step of SaaS software development, where relevant team members brainstorm ideas and collaborate with the development team to check the feasibility.

The ideation stage also consists of validation, the other side of this coin, which entails verification of the chosen idea’s viability before development kickstarts. Typically, the ideation stage for SaaS development involves the following:

• Creating a SaaS idea
• Conducting in-depth market research and surveys for validation
• Establishing the mandatory technical parameters
• Building the prototype of the SaaS application
• Assessing and revising the prototype’s compliance with appropriate regulatory laws

After finalizing and validating the idea for the application, teams can begin designing and laying out its wireframe. Fortunately, the design process for SaaS development isn’t very different from that of traditional software design. As usual, companies need to build an intuitive and straightforward UI, ensuring that it pertains to the user’s tasks effectively.

Companies must also note that mobile-first SaaS is one of the most popular SaaS trends today, with apps like Calendly, Loom, Notion, and Hubspot being the best examples. Hence, during the design stage, teams must focus on the mobile mockup designs, ensuring they feature a seamless design, high reliability, and role-based accessibility.

Once the design is finalized, the next step is to select the ideal SaaS development tech stacks. Below are some of the most common tech stacks chosen for developing SaaS applications:

• Ionic: A hybrid development framework, Ionic helps developers create SaaS solutions for Android, iOS, and the web via a single codebase. Companies focusing on mobile-first SaaS applications can also benefit from using Ionic, as it helps to increase development speed and optimize costs.
• Angular.js: Angular.js is a prominent front-end framework companies use to create web solutions. Angular.js is also easily suitable for SaaS development, as its components are reusable, expediting the development process.
• MongoDB: Databases are essential to almost all development verticals, and the SaaS software development process is no exception. For this, MongoDB is an excellent choice, especially for building SaaS solutions, as it stores data in documents, not records. This storage approach facilitates the rapid exchange of large data sets, enabling teams to streamline development for faster deployment.
• Symfony: Symfony is a PHP-written back-end framework that has become one of the top picks for enterprise-grade SaaS development, mainly due to its brick-by-brick approach.
• Kubernetes and Docker: Docker and Kubernetes continue to be the most preferred tools for containerization, laying the foundation for microservice architecture that enables teams to create elastic infrastructure.

Like every other software product or solution, a SaaS application may also encounter future alterations, including performance improvements, scalability fixes, security optimizations, and operational flexibilities.

To account for such alterations, SaaS development teams must divide the application’s data into individual data stores, known as partitions. This simplifies the process of handling each partition separately without involving the complexity of its entire database.

After data partitioning, teams can begin the development and testing phase of SaaS software development. While there’s no one-fits-all approach to developing SaaS applications since companies adopt various methods depending on multiple factors, the process usually involves the following:

• Software designers provide the UI/UX mockups and design files
• Back-end teams, especially engineers, write the required code for the application’s features to function
• Front-end developers deploy designs to the server and connect the front-end with the back-end system
• QA testers build and run the appropriate tests to detect and document bugs, also ensuring fixes

The testing phase is critical to ensure the SaaS application meets the end user’s needs before and after deployment. Companies must try to implement automated and manual testing strategies to employ a quality assurance strategy covering the entire software.

Once development is complete, testing is conducted, and all the kinks have been ironed out, the SaaS application is ready to be rolled out. Everything must be in place so the targeted users can use the software seamlessly, easily access extensive documentation, contact customer support promptly, and do other customer-related tasks without much hassle.

The deployment phase is primarily spearheaded by a DevOps engineer, one with the expertise to guide the software through its launch stage. Post-launch, teams must focus on maintenance, which typically includes heavy automation to deploy real-time software updates.

Another key area to prioritize after product deployment is its scaling. Many companies make the common mistake of neglecting their scaling strategies and taking on product maintenance head-on. However, the scaling stage is an essential part, even after the SaaS development process is over. Companies must quickly begin collecting feedback after the application launch via surveys, emails, interviews, etc., to spend their resources wisely on the following aspects:

• Adding new features to the application
• Monitoring the application and running analytics
• Enhancing the product
• Product support

Your SaaS application's business value, services, and user satisfaction is as vital as the application itself. Therefore, teams must carefully monitor, manage, and optimize app performance after it's launched to target customers. Accurate management and performance optimization go a long way in enhancing the application to adapt to changing user requirements and market landscapes and fulfill user expectations.

At this final stage of the SaaS development process, companies must track potential security gaps, solve user experience bottlenecks, and ensure the application is ready for rapid scaling. Here are some of the common tools used for managing and optimizing SaaS solutions:

• Cloud cost optimization: AWS Cost Explorer, Azure Cost Management and Billing, and AWS Cost Anomaly Detection
• Application performance monitoring: Dynatrace, New Relic, and AppDynamics
• Security and compliance: AWS Security Hub, AWS IAM, Tenable, and Nessus
• Event management: Splunk and ELK Stack
• Business intelligence: Looker, Power BI, and Tableau
• User experience monitoring: UserZoom

As lucrative as SaaS software development is, it also comes with certain drawbacks companies must know before undertaking this process. These drawbacks include:

One of the most common SaaS software development challenges is delivering a product that meets all customer expectations. Moreover, these expectations and customer needs can quickly change over time, and the product must adapt to succeed.

However, overcoming this hurdle isn’t too difficult. Companies can adopt a customer-oriented approach to their SaaS development process to create a product that meets most customers' needs and adapts to changing ones. This means researching customer needs from the first stage of development and gathering ample feedback to understand their expectations.

SaaS applications generally have several features embedded, some built by third parties and integrated via APIs, others built from scratch. A common third-party feature in most SaaS products is the payment gateway, allowing users to perform monetization activities or pay for their subscriptions.

The challenge here is the integration part, given how complex its technical requirements are. Stripe, QuickPay, and PayPal are some of the most prominent payment solutions SaaS applications house. Due to high complexity, each payment platform comprises API documentation to educate users on implementing them.

The best way to tackle this challenge is to hire an expert SaaS development team with in-depth QA knowledge. Such teams can perform automated and manual testing to ensure the seamless working of custom third-party integrations.

Given how critical regular updates are to a SaaS application, a significant challenge companies face is the inability to access the app during maintenance.

Traditional software systems usually notify users about downtimes before performing updates. However, most SaaS applications are permanently online, and the concerned maintenance team must follow a zero-downtime deployment approach. This means the application is completely active during deployment and remains the same.

One of the most common zero-downtime deployment strategies is the blue/green approach. In this approach, the SaaS application release model sends numerous users at a scheduled interval from its older version to a newer, identical one - both of which remain accessible. The older version is labeled as the ‘blue environment’, while the newer one is called the ‘green environment.’

Lastly, the SaaS system must be completely customizable, starting from its interface and ending at its underlying layers. Moreover, the customization depends on numerous factors, including user preferences, client needs, and business offerings. From the subdomain to the color, template, and layout, many elements may require customization, which can be quite demanding.

To overcome this challenge, companies must follow the Agile methodology and design the SaaS application in a lean manner. This way, the product will fully adapt to new customer needs, high customization requests, and other related demands.

In a world where agility and flexibility are integral for business success, companies actively seek highly scalable solutions, such as SaaS development. SaaS products are infinitely scalable, freeing businesses from infrastructure needs and enabling them to build highly accessible applications.

However, to leverage the full potential of SaaS software development, companies must have the right resources, including SaaS experts who can help them build a SaaS product fueled with innovation. Turing provides transformative SaaS development solutions driven by global engineering talent, next-gen solutions, and cutting-edge processes for unique business needs.

Talk to an expert today and join 900+ large enterprises and fast-scaling startups that have trusted Turing for their engineering needs.