How Much Does It Cost to Build a SaaS App- A Complete Guide

Businesses today depend on a lot of apps to get things done.

In fact, companies on average use 112 SaaS applications for everything from project management to customer support and marketing.

And it’s not slowing down—Sapphire Ventures reports that 86% of enterprise buyers plan to keep or even increase their SaaS spending.

So, what exactly is a SaaS app?

SaaS (Software as a Service) apps run on cloud servers and are accessed through a web browser. No need to download or install anything, and updates happen automatically. These apps work across different devices and operating systems, making them really convenient.

With businesses relying on so many tools, many are realizing that building their own SaaS platform is a smarter move. Instead of juggling multiple third-party solutions, companies can develop a tailored platform that fits their exact needs. A custom SaaS app gives better control, seamless integration, and even opens up new ways to make money.

But it’s not just about saving costs—it’s about staying ahead of the competition.

So, how much does it cost to build a SaaS app?

The cost of developing a SaaS platform depends on different factors. A basic version with just a few features will be cheaper. But here’s what to think about:

• What kind of user experience (UX) does the app need? Does it have complex workflows or too much going on in one screen?

• Does the app need things like analytics, AI-powered features, or video streaming?

• Will it require real-time updates or chat functionality?

Adding these features will raise the price of development.

Most businesses want a SaaS app that’s affordable but still high-quality. Understanding the factors that affect cost can help you optimize your budget and get the most value.

This article serves as your SaaS cost calculator, breaking down the factors that affect development costs so you can plan your budget effectively.

What is the cost of building a SaaS platform?

Developing a SaaS web/mobile app isn’t a one-size-fits-all process. The cost depends on what type of app you’re building, the features you need, and how complex the development process is.

A simple SaaS web/ mobile app can be built quickly and at a lower cost, while an advanced platform with AI, automation, or integrations will require more time and investment.

Below is a breakdown of SaaS development costs based on complexity.

These numbers provide a rough estimate, but every SaaS project is different.

Estimating the cost of building a SaaS platform depends on things like the app type, features, and your business goals.

But when you’re building an AI SaaS product, the costs usually go up because of the added complexity.

AI features like machine learning models, data processing, and the infrastructure you need all drive up the investment.

How much does it cost to build an AI SaaS product?

For businesses looking to integrate AI into their SaaS platforms, development costs increase due to the complexity of machine learning models, data processing, and infrastructure. AI-powered SaaS products require additional investment to ensure scalability, performance, and security.

While a standard SaaS platform focuses on delivering core functionality, AI-driven solutions rely on intelligent automation, predictive analytics, and data-driven insights—factors that influence the overall cost.

What factors affect the cost of developing a SaaS web, mobile or AI application

Building a SaaS web/mobile application involves multiple stages, each contributing to the overall cost.

Here’s a breakdown of what goes into it:

1. Product Roadmapping

Before you start building, you need to know what your web, mobile or AI app’s gonna do, who it’s for, and what makes it different.

You’ll do research, check out the competition, and figure out the features that matter most. Having a solid plan upfront saves time and avoids big changes later.

2. UI/UX Design

Nobody wants a confusing app. In this stage, designers make sure your web,mobile or AI app is easy to use and looks good.

If you want something simple, it’s cheaper, but if you’re going for a custom, fancy design with lots of animations, it’ll cost more.

3. MVP Launch

Instead of going all in from the start, you launch a Minimum Viable Product (MVP) first. This just includes the basic features to test with real users.

You can get feedback, tweak the product, and attract early support without spending too much upfront.

4. Development

Now, the developers get to work. They’ll build the app’s structure, from the front-end to the back-end and the database.

You also need things like login, payments, and connecting to other tools (APIs). The more complex the app, the more time and money it will take.

5. Quality Assurance and Testing

Before your web, mobile or AI app goes live, it needs to work well. This means testing it on different devices and making sure everything works as it should.

Remember, if you skip this, you might end up with bugs that can cost more to fix later.

6. Deployment and Maintenance

Once the app is out there, it doesn’t stop. You’ll need to keep it updated, fix bugs, and make sure the app works as more people use it.

If the app grows, you might need to upgrade servers or improve performance to keep everything running smoothly.

Factors That Impact AI SaaS Development Costs

• AI Model Complexity – The more advanced the AI capabilities, the higher the development cost. Simple automation tools are more affordable, while deep learning and real-time analytics require significant investment.

• Data Processing Needs – AI applications rely on large datasets for training and optimization, increasing cloud storage and processing costs.

• Scalability & Integration – AI-driven platforms must be built with a modular approach to support future growth and seamless integration with other tools.

AI SaaS development costs range from $20,000 for basic automation to over $150,000 for advanced deep learning solutions, depending on complexity, scalability, and feature requirements.

Additional Factors That Affect the Cost of AI SaaS Development

1. AI Model Complexity: AI models can vary in complexity. Simple automation tasks like chatbots are cheaper to develop, but advanced features like deep learning or real-time analytics can drive costs up significantly. More complex models require more time, expertise, and resources to build.
2. Data Collection and Processing: AI requires a lot of data for training its models. This means gathering, cleaning, and processing large datasets, which adds both time and costs. You’ll also need to store this data securely, which can increase cloud storage expenses.
3. Infrastructure Needs: AI applications require powerful computing resources. The servers and infrastructure needed for AI processing are often more expensive than for regular SaaS apps. This includes the use of high-performance GPUs, which can add significant costs to the overall project.
4. Continuous Learning and Updates: AI models aren't "set and forget." They need to be regularly updated with new data to improve their accuracy and effectiveness. This ongoing training and model optimization can add to the cost over time.
5. Scalability and Integration: AI-driven platforms require careful planning to ensure they can scale effectively. As your user base grows, the app will need to handle more data and requests. Integrating AI with other third-party services or tools also requires additional development, which can raise the overall price.
6. Security and Compliance: With AI handling sensitive data or making decisions, ensuring the security and compliance of the application becomes crucial. If your AI SaaS handles healthcare data or financial information, additional investments in meeting industry standards (like HIPAA or GDPR) can increase the development cost.

In summary, while the core factors like product planning and design are similar, AI SaaS development introduces extra layers of complexity, requiring more investment in infrastructure, ongoing updates, and compliance. This can drive up the overall cost but is essential for building a robust and scalable AI-driven product.

So, why should you choose AI SaaS development?

Because, despite the higher costs, the potential benefits are enormous.

AI SaaS can provide your business with powerful automation, better data-driven insights, and enhanced user experiences that can set you apart from the competition.

It allows for smarter decision-making, improves efficiency, and creates scalable solutions that can grow with your business needs.

If your goal is to stay ahead in a competitive market and offer innovative solutions to your customers, investing in AI for your SaaS platform is a smart choice that pays off in the long run.

Ongoing Maintenance & Operational Costs

Once your SaaS platform is live, there are ongoing costs that can add up quickly:

• Cloud Hosting & Servers: Depending on how many users you have and how often they use your app, fees for AWS, Azure, or Google Cloud can fluctuate. Extra traffic or data storage? That’s a higher bill.

• Support & Bug Fixes: Even the best apps run into hiccups. Having a dedicated team or service in place to address issues ensures minimal downtime.

• Periodic Updates: Operating systems and browsers change; new security threats emerge. Regular updates keep your SaaS app relevant and safe.

• Scaling Expenses: As your user base grows, you might need to optimize or upgrade infrastructure—this can be anything from better load balancers to additional storage layers.

Staying proactive about these maintenance costs helps you plan your budget effectively, so surprises don’t derail your SaaS app dev costs.

Security & Compliance Budget

If your app handles sensitive info—like personal data, medical records, or financial details—you can’t skip compliance:

• Regulatory Requirements: HIPAA, GDPR, or PCI-DSS often require specific data handling and encryption methods.

• Security Audits & Testing: Routine vulnerability checks help you catch weak spots before they become major threats.

• Penetration Testing: Hiring specialists to try to “break into” your system is crucial, but it adds to your total SaaS app dev costs.

Investing in security measures early on isn’t just about checking boxes. It’s about building trust with users and preventing huge losses from breaches or fines.

Also, if you're integrating AI into your SaaS platform, there are additional factors that can significantly impact the price.

These include the complexity of the AI models, the need for large-scale data processing, and the infrastructure required to run AI algorithms effectively.

SaaS software development costs based on team type

The cost of building a SaaS web, mobile or AI application depends heavily on the development team.

Each option has its own advantages, but working with an experienced agency often ensures a smoother process, better quality, and long-term reliability.

1. Freelancers (Lowest Cost, Highest Risk)

• Freelancers are the cheapest way to build a SaaS app, with hourly rates from $15 to $100+.

• But, managing multiple freelancers for design, development, and testing can be tricky,

• Risks include delays, inconsistent code quality, and lack of long-term support.

• Works for simple projects but not ideal if you need a scalable, high-quality SaaS product.

2. In-House Team (More Control, Higher Costs)

• Gives you full control over development and long-term stability.

• High costs, with developer salaries ranging from $80,000 to $150,000 per year per person.

• Additional expenses for benefits, office space, and infrastructure.

• Best if you plan continuous development and have the budget for an in-house team.

3. Outsourcing (Cost-Effective, Scalable, and Reliable)

• Outsourcing SaaS development to an experienced agency provides a structured approach with skilled developers, designers, testers, and project managers.

• Ideal if you’re building a high-security web, mobile or AI-driven SaaS platform.

• Costs range from $40,000 to $150,000+.

• Ensures a smooth workflow, standardized processes, and high-quality code.

• Unlike freelancers, outsourcing agencies provide long-term support, scalability, and a dedicated team to maintain your product.

When should you hire a developer (in-house or freelance)?

Deciding between an in-house developer and a freelancer depends on your SaaS development cost, project complexity, and long-term vision.

Each option has its advantages based on what you’re building and how much you're willing to invest.

Hire an in-house developer if:

• You’re building a SaaS platform that needs ongoing updates and maintenance.

• You want full control over development, security, and workflow.

• Your budget covers salaries, benefits, and infrastructure costs.

• Your SaaS app pricing and packaging requires deep integration with company-specific systems.

• You need a dedicated team member who understands your business goals.

Hire a freelance developer If:

• You’re working on a short-term SaaS product like an MVP or a single feature.

• Your SaaS software pricing is tight, and you need a cost-effective solution.

• You need a specialist for UI/UX, backend, or AI without long-term commitments.

• You’re comfortable managing remote tasks and different time zones.

• You have an internal tech lead who can review the code and maintain quality.

If your SaaS cost structure involves a more complex or scalable platform, outsourcing to an agency might be a better choice.

This option balances SaaS development costs, quality, and long-term support while ensuring a structured workflow.

When should you hire a SaaS development agency?

Hiring a SaaS development agency is a smart move when you need expertise, efficiency, and a scalable product.

Here’s when it makes the most sense:

You need a high-quality, scalable SaaS product

• Agencies build SaaS platforms that handle growth and high user traffic.

• They follow best practices to ensure security and high performance.

You want to launch faster

• Agencies have full teams ready to start, cutting hiring delays.

• Their streamlined process helps launch an MVP in weeks, not months.

Your project requires advanced tech and integrations

• If your platform involves AI, blockchain, or AR/VR, agencies provide the right expertise.

• They ensure smooth third-party integrations like CRMs, cloud services, and SaaS software pricing tools.

You have a limited in-house team or no tech expertise

• If you don’t have developers, an agency acts as your tech partner.

• Even with an in-house team, agencies fill skill gaps and manage peak workloads.

You want long-term support and maintenance

• Agencies handle security updates, bug fixes, and feature improvements.

• They ensure your platform stays up-to-date as your business grows.

You need cost-effective development without full-time hires

• Instead of managing multiple developers, you get a full team at a fixed SaaS development cost.

• Agencies reduce overhead costs like salaries, benefits, and infrastructure.

If you're wondering how much does it cost to build a SaaS product, agencies provide clarity with a well-defined SaaS cost structure and pricing models.

And, if SaaS development costs and long-term quality matter, outsourcing can be a smart choice.

Hidden or indirect costs

Beyond the obvious line items, unexpected costs can sneak up on you:

• Third-Party Services: Payment gateways, analytics tools, and APIs might charge monthly or transaction fees.

• Licenses & Subscriptions: Some premium UI components or specialized libraries come with license costs.

• Team Coordination: If you’re juggling multiple freelancers, spending time on status calls or overlap scheduling can add indirect expenses.

• Documentation & Training: Especially if your SaaS app has advanced features, creating how-to guides or onboarding materials can become a separate mini-project.

Being upfront about these less-visible expenses keeps your budget from ballooning over time.

Return on Investment (ROI) & financial upside

Sure, costs matter, but so do the gains:

• Multiple Revenue Streams: Beyond subscription plans, you can offer add-ons, premium support, or an enterprise tier with advanced features.

• Faster Product Iterations: Launching early with an MVP and refining quickly can lead to faster market adoption.

• Competitive Differentiator: If your platform solves a unique pain point, you can stand out—and charge accordingly.

• Lifetime Value of Customers (LTV): Even if initial development seems pricey, a solid SaaS app can attract loyal customers who stick around for years, paying monthly or yearly fees.

Tracking basic metrics—like LTV vs. Customer Acquisition Cost (CAC)—gives a snapshot of how quickly you’ll recoup your SaaS app dev costs.

Project management & methodology

How you manage your dev process can impact your bottom line:

• Agile or Scrum: Frequent check-ins and sprints keep development aligned with your vision, reducing rework.

• Kanban Boards & Task Tracking: Visual tools help you quickly spot bottlenecks and track each step of development.

• Iterative Feedback Loops: Getting user input after every release helps you pivot if something isn’t working, before it eats into your budget.

Even small tweaks in your workflow—like weekly instead of monthly reviews—can save time and money over the project’s lifespan.

Considering growth & global scale

A SaaS platform that starts with 100 users could eventually serve thousands or even millions. Preparing for that growth is smart:

• Multi-Region Servers: Hosting your app closer to your users can improve performance (and sometimes add regional compliance complexities).

• Localization Costs: If you want global reach, you’ll need translations, multi-currency support, and region-specific content.

• Load Testing: Simulating thousands of users hitting your app at once ensures you’re ready for real-world spikes.

By planning for scaling early, you avoid having to redo major parts of your architecture down the road.

Integration complexity

If your SaaS app needs to talk to other software, that’s a plus—but it can spike development costs:

• Basic API Calls: Quick to set up, but you still need to handle data formats and error responses.

• Deep Two-Way Sync: Requires more logic to keep data consistent in both apps (e.g., pushing updates back and forth with a CRM).

• Security Layers: Integrations mean additional entry points. You’ll want robust authentication (OAuth, tokens), which adds development hours.

The more integrations, the bigger the budget, so it’s smart to outline must-have vs. nice-to-have integrations early in the process.

Marketing, launch, & user onboarding

Launching a SaaS platform isn’t just about writing code:

• Marketing Budget: Paid ads, content marketing, or influencer outreach can be just as critical to success as the platform’s features.

• Onboarding Flows: Well-crafted tutorials, in-app tours, or email drip campaigns help users see immediate value—reducing churn.

• Support Resources: FAQ sections, help guides, or chatbots cut down on the load for your support team.

Having a dedicated portion of the budget set aside for marketing and user engagement prevents you from having a polished app that no one knows about.

Here is a small tip for you. Focus on building relationships early. Start engaging your audience before the launch by sharing sneak peeks or early access offers to create excitement and build momentum.

Different pricing models for SaaS development

When you’re hiring a development team or agency, it’s important to understand how you’ll be charged. Pricing often comes in three main flavors:

1. Fixed-Price Contracts:

• Pros: Clear budget from day one. Good for smaller projects with a well-defined scope.

• Cons: If you change your mind mid-project, expect extra charges or delays.

2. Time-and-Materials:

• Pros: Flexibility. You can refine features as you go, without renegotiating the entire contract.

• Cons: Costs can climb if you keep adding features or alter requirements.

3. Dedicated Team Model:

• Pros: You get a full team (developers, designers, QA) working like an in-house unit. Great for continuous development.

• Cons: Typically a higher monthly outlay, which can be steep if you’re on a tight budget.

Picking the right model can save significant time and money, so weigh your project’s complexity and growth plans carefully.

5 proven tips to reduce your SaaS development costs

Building a SaaS web, mobile or AI app can be exciting, but managing SaaS development costs effectively is crucial. Here are five strategies to optimize your budget without compromising quality.

1. Start with an MVP (Minimum Viable Product)

• Focus on core features to validate your idea.

• MVP development cost is lower compared to building a full product.

• Launch faster, gather feedback, and save on future iterations.

2. Choose the right tech stack

• Pick programming languages, frameworks, and cloud services that suit your needs.

• Open-source tools and scalable cloud services reduce SaaS software development costs and infrastructure expenses.

• A well-chosen tech stack ensures your product is cost-effective and adaptable to future needs.

3. Outsource development to a trusted partner

• Hiring an in-house team can drive up costs due to salaries and benefits.

• Partnering with a trusted agency helps reduce SaaS app development cost.

• Agencies bring a structured workflow, cutting development time while maintaining quality.

4. Leverage pre-built components & APIs

• Instead of building from scratch, use pre-built solutions like Stripe for payments and Firebase for authentication.

• These components cut down on custom development time and lower the cost of building a SaaS product.

5. Plan for scalability from day one

• Design a scalable architecture to avoid costly overhauls as you grow.

• Implementing cloud-based solutions, modular code, and microservices ensures long-term cost control.

By focusing on strategic decisions, businesses can keep SaaS development costs under control.

A well-thought-out plan balances quality, scalability, and efficiency, helping companies launch faster and scale without unnecessary expenses.

The goal is to focus on the long-term value and ensure resources are used wisely.

Here are some real-world examples of how companies applied smart strategies to reduce SaaS development costs and achieve remarkable growth:

1. Dropbox– MVP First Approach

• Started with a simple explainer video to test the idea.

• Focused on core features to save time and costs.

• Gained user interest before investing heavily in development.

• Growth milestone: Success metric: Dropbox's Q1 2025 revenue is approx. $620 million, reflecting the success of their MVP approach and scalability.

2. Slack – Outsourced Development

• Outsourced much of its software development to a third-party agency at the beginning.

• Saved on salaries, benefits, and infrastructure costs.

• Allowed them to focus on growth while keeping development costs low.

• Growth milestone: Slack was acquired by Salesforce for $27 billion in 2021, demonstrating the long-term success of their strategy.

3. Airbnb – Leveraging Existing Tools

• Used Craigslist to find their first users and test their ideas.

• Saved costs by not building a platform from scratch initially.

• Focused on validating the concept before further investment.

• Growth milestone::Airbnb now has over 150 million worldwide users who have booked over 1.5 billion stays, with more than 5 million hosts globally.

4. Instagram – Using a Simple Tech Stack

• Kept the tech stack simple with just a few essential features.

• Delayed adding advanced features like video and stories.

• Reduced initial development time and costs.

• Growth milestone: Instagram has over 2 billion monthly active users, proving the scalability of their approach.

5. WhatsApp – Focus on Core Features

• Launched as a basic messaging app with no extras like voice calls or stickers.

• Focused on essential features to reduce development costs.

• Gradually added features as the app gained traction.

• Growth milestone: WhatsApp was acquired by Facebook for $19 billion in 2014, highlighting its massive success.

These examples show that starting with an MVP, outsourcing, using existing tools, and focusing on core features can cut development costs and lead to significant success.

Bottom line

In conclusion, developing a successful SaaS web, mobile or AI app requires careful planning, choosing the right pricing model, and making strategic decisions to optimize costs without sacrificing quality.

Focusing on core features, selecting the right tech stack, and planning for scalability from the start can help you avoid unnecessary expenses while ensuring long-term success. Real-world examples of successful companies highlight how starting small, iterating quickly, and being mindful of hidden costs can lead to significant growth.

No matter if you want to build a similar SaaS web, mobile or AI app or just want to know SaaS web/mobile or AI app development costs, contact us, and we will be happy to assist you with your specific requirements.

Riya Thambiraj

•

Creative content writer at RaftLabs

Riya has a knack for making complex tech easy to grasp, writing about SaaS innovations, AI developments, and cutting-edge IT trends.