Creating a SaaS (Software as a Service) app from scratch can potentially transform the business model of any given organization, however, one must also have a grasp of the cost implications.
As shown in a recent poll, 73% of 1724 respondents consider SaaS as very pivotal in the day-to-day activities of a given business (Source: exploding topics, 2024).
This survey underlines the increased need and importance of SaaS applications.
However, in terms of the cost of developing it, it can greatly depend on specific factors that we are going to discuss in this blog.
Continue reading to understand the actual figures involved in the development of a SaaS application.
In building a SaaS product, just like in the construction of a building, you need to have a blueprint, tools, and a team to do this.
Major cost influencers include:
In a SaaS product, added complexity adds to the cost of the product proportionately.
Also, some other features, including multi-tenancy, data analytics, and real-time notifications, add multiple layers of developer work.
For example, Slack started just as a simple tool developed for team messaging, however, over time, it has grown into a complex platform.
It now features a lot of integrations besides several other enhanced features, which no doubt increased its development and maintenance cost manifold.
What is most prominent is hiring the best team that can assist you in building a SaaS application.
Whereas freelancers can charge the lowest rates, a more experienced team-for example, one such as that provided by Clockwise Software offers high, scalable quality solutions aimed at meeting your needs.
Collaboration tools like Trello most likely have expert development teams to ensure that things run smoothly with the user.
Take an insight into the image below displaying SaaS application statistics.
The technology stack that will be chosen obviously will affect the budget and performance in general.
Using powerful frameworks from the very beginning, like Django, to handle back-end processes ensures the system will be able to scale when needed.
But in turn, often requires the hiring of a developer with special skills and expertise in that very framework.
There are various factors on which the cost of SaaS depends, however, the expected price can be:
This is considering that at a startup, some of the core integrations, such as user authentication and a dashboard, could go up as high as 30,000-50,000 dollars.
The core positioning was that of scheduling social media the easy way when Buffer entered the market, having low costs with reduced features.
Applications including a number of further layers of complexity, such as multi-user access and/or data visualization capabilities added, may range upwards to a high of $60,000 to $150,000.
Meanwhile, platforms like Asana required an additional investment in subscriptions for many more features, designed for team collaboration, allowing detailed tracking of projects.
Large business SaaS products, like Salesforce, can reach over $200,000 easily because of the very robust infrastructure involved in addition to complex integrations.
It does not end with the development of any SaaS product; ownership is just the down payment, so to speak, as in buying a car.
Most SaaS platforms depend on one of two cloud hosting services: AWS or Azure.
Monthly costs that range from $500 to $10,000 are not out of the ordinary, considering that this is dependent on the level of traffic and data required.
You will also have regular bug fixing and performance enhancements, and this will take another 15–20% of your yearly development budget.
If you think of marketing, it is also expensive to do, from paid adverts down to content marketing.
Most SaaS products, like Dropbox, spend a lot during the introductory stage of their product in trying to attract users.
Do You Know?
SaaS applications make up 70% of total company software use.
Following are a few strategies that help to lower costs, yet not at the cost of the quality to start a SaaS company:
That means building out the core functionalities first that solve big pain points for your audience.
Zoom, for instance, began with high-quality video conferencing and started layering features on top of it much later.
Consequently, open-source frameworks or APIs can save lots of time and money.
For example, in most SaaS platforms, the integration of payment gateways is done easily with services like Stripe.
It is by working with industry experts like Clockwise Software – that you can avoid common pitfalls, actually saving money in the long run by building a product that is scalable from the outset.
Let me outline a few such pieces of SaaS software that started small and then grooved their way to success:
As we observe it in today’s period, it has grown to be a multibillion-dollar platform.
It was later able to expand features such as team collaborations and power-ups since its architecture was scalable.
They knew full well it was one of the biggest differentiators for their product, a reason prospects bought: seamless comms amongst team members.
More importantly, the amount that needs to be invested in your SaaS company is not just a number, but an investment in your dream.
Be it the development of the MVP or further scaling into a feature-rich product, knowing the cost of SaaS development gives meaning to your journey and helps you move ahead with confidence.
What does that mean in layman’s words?
That means that you should start with a simple application, known as the MVP, and work your way up from it.
So that you can expand the app in the future, look for those who understand how to build apps right the first time.
Any app, be it a widely recognized app like Slack or targeted for a smaller audience group, is worth the attention and costs if done correctly.
Internet Writer
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