How to Build a SaaS App? A Step-by-Step Development Guide

The SaaS market is growing rapidly, with an increased demand for strong SaaS app development companies as more enterprises turn to SaaS business models.

Worldwide SaaS revenue is expected to grow at an annual rate of 19.38% between 2025 and 2029, reaching a market volume of $793.10 billion by 2029.

Experts predict that, by 2028, generative AI will reduce the risk of noncompliance in software and cloud contracts by 30%. Additionally, more than 50% of enterprise businesses are expected to rely on industry cloud platforms by 2028.

With this shift, understanding how to build a scalable and competitive SaaS app is more important than ever. And that is exactly what this guide does.

Who should read this guide?

This guide is for:

• Entrepreneurs & Startups – Looking to launch a SaaS business from scratch.

• Product Managers & Founders – Planning to develop a scalable and secure SaaS app.

• Developers & Tech Teams – Wanting a structured approach to SaaS development.

• Business Owners – Exploring SaaS as a model to digitize their services.

The continued growth of SaaS highlights the need for a structured development approach. This guide breaks down the key steps to building a SaaS app, from defining a business model and selecting the right technology stack to launching and scaling your product successfully.

What is SaaS and why is it the future of software?

SaaS (Software as a Service) is a cloud-based software delivery model where users access applications through a web browser or mobile app without needing to install them on their devices.

Instead of purchasing software outright, customers subscribe on a monthly or yearly basis, paying only for what they use.

With SaaS, the provider manages everything—hosting, maintenance, updates, and security—so users don’t have to worry about installation or upkeep.

This makes it a cost-effective and hassle-free solution for businesses and individuals looking for scalable and accessible software.

SaaS is the future of software because it makes things easier, more flexible, and smarter. Here’s why:

No Installation Needed: You don’t need to install anything on your computer. Just log in, and you’re good to go.

Accessibility: You can use SaaS web, mobile and AI apps from anywhere, on any device, as long as you have an internet connection. This is great for remote work and on-the-go access.

Lower Costs: With SaaS, you avoid high upfront costs of buying software and hardware. You pay a subscription fee, which is often more affordable.

Automatic Updates: SaaS providers handle all the updates and maintenance, so you always have the latest version without any extra work.

Scalability: As your needs grow, SaaS can easily scale with you. Whether you’re a small startup or a large enterprise, it can adapt.

Security: Many SaaS providers offer strong security measures, which means you don’t have to worry as much about managing it yourself.

AI Integration: AI is increasingly being built into SaaS web and mobile apps, helping businesses automate tasks, analyze data, and personalize experiences.

With AI, SaaS apps can provide smarter recommendations, improve decision-making, and even predict future trends, making the software even more powerful and efficient.

All these benefits, combined with the growing power of AI, make SaaS a flexible, cost-effective, and intelligent choice, which is why it's expected to dominate the software landscape.

Types of SaaS apps

5 Types of top SaaS App Businesses

Now that you understand the concept, let us see the different types of SaaS software available in the market:

Customer Relation Management Software:

Customer relationship management (CRM) is the software that assists businesses in offering quality service to their customers. It will guarantee a smooth and seamless experience for each customer.

Below are some of the advantages of this tool:

• Efficient management of customer data

• Tracking all customer interactions

• Identifying new leads and categorizing them accurately

• Manage the marketing campaigns

• Provide better customer service

• Identifying sales opportunities

• Providing detailed analytics through various metrics

• Generating automated sales reports for evaluation

• Creating a centralized database

• Improvement in customer retention‍

Enterprise Resource Planning Software:

Enterprise resource planning (ERP) is an effective tool that allows businesses to integrate all their core activities into a single system. Implementing this software can be very useful. It makes monitoring various business departments easy. It can act as a central nervous system of a business that integrates automation and intelligence to carry out a company's day-to-day activities efficiently.

Some of the highlights of using ERP software are:

• Availability of accurate information

• Better collaboration of different departments

• Enhancement in productivity

• Reduction in overhead costs

• Improvement in overall quality of management

• Inventory tracking and monitoring are easier

• Minimizing risks by avoiding errors

• Ensuring data security

• Successful scaling of business operations

• Keep ahead of your competitors in the market

Project Management Software:

Managing a project in an enterprise can be quite a complex task. Project management software can simplify the process through proper planning, allocation of resources, and scheduling of tasks. This software assists the project manager in organizing and scrutinizing each stage of the project.

Let us now understand the benefits a company acquires by using this software:

• Planning and tracking the progress of projects

• Notifying the parts that need improvement

• Scheduling the meetings and programs

• Allocating the right resources

• Effective communication and collaboration

• Easy documentation

• Functions as per the requirements of a firm

• Project budget management in real-time

Accounting Software:

Businesses use accounting software to organize, manage and automate their financial tasks and transactions. As a business keeps growing, calculating finances can be a humongous task. At times, accounting errors can cost a fortune. Accounting software helps a business grow to the next level. It provides a clear insight for the management regarding the performance of a business.

Let us see some reasons that encourage companies to use accounting software:

• Simplifies time-consuming tasks

• Generates accurate financial reports

• Automates the tasks

• Reduces errors

• Sync up all the financial data

• Filing the tax will be easy

• Helps in integrating with systems like online banking

Email Marketing Software:

As the name suggests, an organization's marketing department uses email marketing software mainly for email marketing. Emails help a business build an emotional bonding with its customers. It is the best medium that allows businesses to stay in touch with potential customers and keep reminding them about the products or services of a particular brand. This software enables a company to explore a marketing campaign to its fullest potential.

Email marketing software helps businesses to

• Advertise at lower costs

• Convert a viewer into a customer

• Send emails to a specific category of audience

• Easy to operate

• Automate the emails

• Generate analytics for further assessments

• Communicate with the audience globally

• Creates an impact instantly

So, now you understand how SaaS applications can benefit your business. Let us try to understand the distinct features of different types of SaaS applications.

Web, Native, or Hybrid Apps – Which One is Right for Your SaaS?

Business owners need to have a thorough understanding of each type of app. It helps to select the right kind of SaaS product that will profitably benefit a business.

Web Apps

Web-based applications enable users to access an application over the web through the internet browser. In other words, this facility provides a responsive design so the user can browse from a desktop or a mobile browser. Thus, the users have to only open their browser like Chrome or Safari. They can load the webpage and start using it without downloading any standalone applications.

Examples of web-based applications:

• Twitter

• Slack

• Trello

• Amazon

• Gmail

Low-cost development and ease of maintenance make it the best choice for tight-budget scenarios.

Native Mobile Apps

These are SaaS mobile apps that users can download and use whenever required. Native apps use specific languages for coding.

For example, iOS devices use Objective-C programming language, while Android devices can use Java. We can install the native apps on our devices through a suitable application store like Google Play or Apple App Store.

Examples of native SaaS mobile apps:

• Facebook Messenger

• Instagram

• Spotify

Native apps are highly reliable and showcase fast performance. The best part is that the UX/UI adjusts according to the device on which the app gets downloaded.

Mobile Hybrid Apps

A hybrid app will have both the characteristics of native and web applications. Like the native apps, hybrid apps are available through the application stores. Even though these apps operate on browsers, they possess UI capabilities like native apps. If a person wants to test the capabilities of an app before investing in it, then hybrid apps are the best option.

Examples of mobile hybrid apps:

• Evernote

• UBER

• Twitter Lite

• OpenSea

The top feature of a hybrid app is its cost-effectiveness. Also, it can provide an efficient service.

The key differences between SaaS B2B and SaaS B2C

Difference between SaaS B2B and SaaS B2C

B2B (business to business) is the scenario in which a business sells its products or services to another company. In such cases, commercial transactions happen between two companies. 

B2C(business to consumer) is the business model in which a company directly sells its products or services to its target audience or consumers.

Hence, the commercial transaction takes place between the company and the consumer. 

B2C SaaS is the process of selling SaaS products directly to consumers. Customers can obtain them through the internet. 

B2B SaaS is the process of companies offering software to businesses on a subscription basis.

Let us understand some differences between selling B2B and B2C SaaS products in detail:

SaaS vs. on-premise software – which model is best for you?

Let us first understand the primary difference between SaaS and on-premise solutions.

A vendor hosts and maintains a SaaS solution for a company. But for on-premise solutions, the company owns the servers and network infrastructure and operates the software.

The apt type of implementation for a business depends on several parameters like the approach, security requirements, budget allocation, etc.

Implementation

The on-premise solutions require more time than SaaS solutions, as the former has to go through several phases for proper planning and execution. The latter will already be an existing platform that the vendor has built and tested successfully. So, the users can start using the service immediately when they opt for SaaS solutions.

So if your organization does not have enough resources to develop an on-premise solution, it is better to go for SaaS solutions. Also, if any staff has to access your software remotely, it is better to go for SaaS services.

Cost

Compared to the beginning costs of SaaS solutions, on-premise solutions are high. It is mainly due to the hardware purchase, setup, and implementation costs. Companies availing of the SaaS services must pay monthly or annually to continue using the services.

So if your company is not in a position to spend a heavy budget on software, then SaaS will be the best solution.

It is easier to manage SaaS than on-premise software. The vendor will take care of the management and maintenance, reducing the disaster recovery issues. If your organization lacks skilled resources, fixing bugs can take more than you anticipate while using on-premise software.

So if you are unsure whether the in-house IT department can handle some crucial situations, it is better to approach any good vendors to build the software that meets your business needs.

Top SaaS apps used by the world

Let us see some famous SaaS application examples:

HubSpot

HubSpot is a tool with its infrastructure hosted on the Amazon Web Services (AWS) cloud platform. It offers a package of tools for leading the digital marketing services of a company.

Compared to the previous year, the revenue of HubSpot saw an increase of 35.71% ($ 0.422B) for the quarter ending on June 30, 2022.

Zendesk

Zendesk is a cloud-based platform that offers help-desk support services and helps gain maximum customer satisfaction for a company. Besides providing free live chat services, they also assist businesses with gathering customer information, avoiding unnecessary expenditures, and driving top sales.

Zendesk's revenue increased by 27.97% ($0.407B) compared to the prior year for the quarter that ended on June 30, 2022.

Box

The Box is a cloud computing software that provides a single platform for content management. It allows the transmission of large files and supports 120+ types of files.

Notion

The Notion is an all-in-one productivity application that offers a single workspace for the whole members of the organization. It also allows for taking notes, assigning tasks, and real-time collaboration for all members.

RaftsLabs has created a similar SaaS application called Practo. It is an online platform that allows users to search and communicate with healthcare providers. The software helps in keeping a patient's data secure through cloud technology.

SaaS development process – 4 key steps to build your app

As a SaaS product development agency, at RaftLabs, we follow a proven methodology to build SaaS apps that allow us to build and launch profitable SaaS apps in less than 16 weeks for our customers.

You can read some of our case studies here.

1. Planning and analysis

We mostly start with the Product Discovery and road mapping session for a SaaS app development. We identify the main competitors of your business, recognize the right target audience, and identify the pain points. We also conduct in-depth market analysis and try to know the latest trends.

2. Finalize the project requirements

We document the features to have a precise vision for development. We make sure that the SaaS product will be suitable to achieve your goals. We note all the risks to come up with the right solutions to overcome all the roadblocks.

3. UI/UX design of your application

We consider the user experience and user interface design (UI/UX) as crucial characteristics for building a SaaS app. A user-friendly design can attract clients and encourage them to try your product. SaaS cloud apps work on both desktops and mobile devices. Hence, we create designs with various resolutions that can match different screen sizes and devices.

4. SaaS app development

Selecting the appropriate technology for building a SaaS app can be challenging as it has to support the features, design, and requirements. Our team will recommend the right tools and technologies stack that can boost the efficiency of the product.

Let us learn some key components for developing SaaS apps:

Front-end

Languages: You can use the languages CSS3, JavaScript, and HTML5 for fundamental front-end development. Bootstrap 5 can be a good choice for a framework.

Back-end

Languages: Programming languages like Java, Python, PHP, C#, and JavaScript are famous for building the back-end. For C#, programmers use frameworks like Django and Flask, while for PHP, they use Symphony and Laravel.

Server: You can choose the cloud servers like Google Cloud, AWS, Microsoft Azure, or DigitalOcean.

Database: The popular databases for SaaS app development are MongoDB, MySQL, Redis, and PostgreSQL.

DevOps Tools: DevOps is becoming an integral part of SaaS products as they help to boost the efficiency of the services. Docker, Terraform, Jenkins, Kubernetes, and Ansible are popular DevOps tools.

Artificial intelligence (AI) & Machine learning (ML): This technology supports predictive analytics to deliver a better user experience or help prevent customers from canceling their subscriptions. Google Cloud, AWS, and Microsoft Azure provide such services.

Interested in learning more about how SaaS apps are built. You can check out our blog to learn more about building a healthcare SaaS app.

How much does it cost to develop a SaaS platform?

The cost of a SaaS web, mobile or AI development depends on the following factors:

1. The developer team’s geographic location.

2. The type of the product.

3. The features, technology, and if the product requires any integrations with other services.

4. The complexity of the project.

For a full-scale SaaS platform (web/mobile), pricing can range from $20,000 to over $150,000, depending on complexity.

If you're just starting out, it's best to build a Minimum Viable Product (MVP) first. An MVP is a basic version of your app with core features, helping you test the idea before investing in a full-scale platform. The cost for an MVP typically falls between $10,000 and $20,000, and development usually takes 6-8 weeks.

For more advanced SaaS applications with custom design, third-party integrations, or AI-powered features, costs and timelines increase. A medium-complexity SaaS (like Trello or Zendesk) can take 12-14 weeks and cost between $20,000 and $60,000.

Highly complex SaaS apps, especially those using AI, AR/VR, or automation, require a larger investment. AI-powered SaaS apps, like Grammarly (AI writing assistant), Gong (AI-driven sales insights), or Notion (smart workspace), offer advanced problem-solving capabilities.

These applications use AI to automate tasks, improve user experience, and deliver data-driven insights, making them more valuable but also more expensive to develop.

Starting with an MVP is a cost-effective way to validate your idea, while AI-powered features can take your SaaS app to the next level with smarter automation and personalization.

Essential SaaS business terms every founder should know

1. MRR (Monthly Recurring Revenue): A business metric predicting a SaaS company's recurring revenue will generate monthly.

2. Product road mapping: The companies make a high-level visual summary describing the product vision, strategy, and progress of the development of the product.

3. MVP (Minimum Viable Product): It is a basic version of a product with sufficient features developed for checking the product's viability. Early adopters often use MVP.

4. CAC (Customer Acquisition Costs): A business's total cost to acquire new customers to purchase their products or services.

5. Churn rate: It is the percentage of customers that cancel their subscriptions, causing a loss in the recurring revenue subscriptions for a company.

6. LTV or CLV (Lifetime Value or Customer Lifetime Value): The business's total revenue from a customer until the period before they churn.

7. ARR (Annual Recurring Revenue): It is the amount a company earns through a recurring subscription annually.

8. Lead Velocity Rate: It measures the percentage growth of qualified leads from one month to the next.

Challenges of SaaS application development and how you can overcome them

A great SaaS product isn’t just about functionality—it must be fast, reliable, and designed for a seamless user experience.

Here are some key challenges you might face and how you can tackle them.

Performance Optimization

If your app loads slowly or crashes under heavy traffic, users will leave.

How to fix it: Optimize your database, use caching (like Redis), and implement CDNs to speed things up. Load balancing helps distribute traffic so your app stays responsive.

Multi-Tenancy Management

Your SaaS app serves multiple customers (or tenants), and you need to keep their data separate and secure.

How to fix it: Use logical isolation (separate databases or schemas) and role-based access control (RBAC) to ensure data stays where it belongs.

Compliance and Data Privacy

Handling sensitive user data means following regulations like GDPR, HIPAA, or SOC 2. A security slip-up could be costly.

How to fix it: Encrypt data, enforce multi-factor authentication (MFA), and schedule regular security audits to stay compliant and build trust with your users.

Cost Management

Cloud services, APIs, and third-party tools can rack up unexpected costs.

How to fix it: Choose the right pricing model—whether it’s subscription-based or usage-based—to balance expenses. Optimize cloud resources with auto-scaling so you only pay for what you actually use.

Continuous Updates & Maintenance

Rolling out new features and bug fixes without breaking anything for existing users.

How to fix it: Set up a CI/CD pipeline for automated testing and deployment. Use feature flags to roll out changes gradually instead of pushing everything at once.

Uptime and Availability

If your app goes down, even for a short time, it can hurt your reputation and revenue.

How to fix it: Use multi-region deployments, auto-scaling servers, and a solid disaster recovery plan with frequent backups to keep things running smoothly.

Vendor Lock-in

Relying too much on a single cloud provider (like AWS or Azure) can make switching expensive and complicated.

How to fix it: Use containerization (Docker, Kubernetes) to keep your infrastructure flexible, so you’re not stuck with just one provider.

User Experience (UX) Challenges

A confusing or clunky UI can drive users away.

How to fix it: Keep your design clean and intuitive. Use A/B testing to see what works best and offer in-app guides or tutorials to make onboarding easy.

By addressing these challenges early, you can build a SaaS product that’s scalable, secure, and user-friendly.

What are the benefits of SaaS application development?

The top benefits of SaaS products are:

• They are cost-effective as they reduce the initial expenses of setting up the software.

• SaaS applications significantly save businesses' time as they are ready to use after the download.

• The scaling process is more uncomplicated and straightforward. Businesses merely have to upgrade their subscription or existing plan.

• As the vendor takes care of the service's maintenance, they will ensure no compatibility issues arise.

• As the method stores data in cloud storage, there is no fear of data loss.

• Compared to traditional storage methods, SaaS offers a high level of security for your data.

Wrapping up

This article has helped you understand how SaaS can be beneficial. The next stage is to find a suitable vendor to develop the appropriate SaaS product for your company.

RaftLabs would love to work with you to design and build a SaaS application. We will collaborate closely with you to create a delightful SaaS product that fits your business niche perfectly. So, if you are gearing up to take your business to the next level, contact us and let us know your requirements and expectations for SaaS app development.

Riya Thambiraj

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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.