Custom SaaS App Development: Challenges, Solutions, and Benefits

by | Nov 15, 2022 | Mobile App Development

According to Gartner, user spending on SaaS is growing year-over-year, far ahead of other as-a-service delivery models. Recent growth is estimated at tens of billions of dollars annually, from $121 billion in 2020 to $145 billion in 2021. Gartner projects $171 billion in user spending on SaaS by the end of 2022, with an 18% growth in comparison. with 2021.

In this article, we reveal the entire process of developing custom SaaS apps. The theoretical material is supported by our real-world technical experience and case studies we’ve worked on, actionable insights into outsourced SaaS development, and recommendations from our experts.

What is a SaaS solution and how does it differ from traditional licensed software?

This is an application deployment model. Users can access a cloud-based application through the Internet and a web browser without having to install any software on their device. With traditional licensed software, users would purchase a software license and install the software locally on their own devices. Compared to traditional software products, SaaS applications do not require customers to use their own server hardware or run software on a specific device. Instead, they allow customers to access off-the-shelf software from any device, and all the heavy lifting is done in the cloud.

Benefits of SaaS

The benefits of this software delivery model encompass multiple aspects of building, maintaining, updating, and provisioning a solution.

Financial benefits

Regular income. A subscription-based business model ensures regular income. With the introduction of new features, subscription costs usually increase, increasing the company’s revenue.

Reduction of unit costs with business growth. The steady growth of the supplier’s business and an influx of customers over time allows a supplier to switch to wholesaling at a lower price while increasing their net profit.

Advantages of hardware and installation

Easy, economical and reliable maintenance. Vendors don’t spend resources on purchasing and maintaining hardware because they pay for it indirectly through a subscription to a cloud computing platform. This approach ensures greater hardware reliability. Some cloud computing products have servers all over the world. With a content delivery network, or CDN, customers can enjoy high performance from anywhere.

Quick and regular updates. With traditional licensed software, end users have to wait a long time for an update to be delivered to their hardware, which is inconvenient. SaaS delivers updates simultaneously, automatically, and quickly to all end users.

Less time to start. Suppliers do not have to work with customer hardware. A customer can use the application right after starting a subscription.

Development and improvement benefits

scalability. A SaaS delivery model gives vendors absolute control over the entire platform, regardless of customer and end-user locations. They can keep it from one place, serve a large number of users, and shape traffic with minimal effort.

Flexibility. SaaS is very flexible in meeting the needs of the public and adapting to new market trends. The ability to change directions and rapidly deploy new components makes these solutions a replacement for traditional licensed software.

Safety. SaaS applications are based on on-demand cloud computing platforms that provide world-class security for your platform, cloud network, applications, cloud operating system, and physical infrastructure. Your company’s sole responsibility is to protect customer data.

Configuration and additions. Cloud-based solutions allow custom configurations and integrations with third-party providers.

Commercial intelligence. With a web-based app, analysts can conduct an in-depth analysis of end-user requests and behavior, enabling specialists to make informed decisions about future software enhancements and infrastructure changes. Business intelligence metrics analysts collect during post-release analyzes help marketing and technical experts make customized offers, manage server capacity, and fine-tune business models.

Increased customer satisfaction and loyalty

Flexible monetization model. SaaS apps allow users to pay monthly, quarterly, annually, or any other interval, rather than all at once.

Customizable service packages. Customers can choose the functionality they need and pay nothing extra.

Budget flexibility and billing control. Customers can choose an appropriate plan with the required feature set. They can stop using the app at any time, add new features to their subscription, and downgrade or upgrade their subscription with just a few clicks after reviewing their activity.

Increase in the value of life. Constant application updates also benefit customers. Providers provide customers with the functionality they need to get their jobs done, helping customers achieve their business goals and streamline their workflows.

Customer service and support. SaaS makes it possible to offer customers many advantages to increase their satisfaction: real-time human support, discounts, special offers, an option for white label and personalization software, etc.

trial period. Companies offer short free or discounted trial periods for users to test an application’s capabilities before making a decision.

Availability on multiple devices. SaaS applications can be used on any device with internet access, which is a critical issue these days due to remote work due to COVID-19.

The next step is to check if your company is ready to use these benefits to further develop your software.

Determine if your business is ready for SaaS

You can consider such solutions whether your business is small, medium or large. What really matters are your company’s business goals, budget, and customers. The B2B segment remains the most suitable candidate for adopting SaaS solutions as this delivery model helps B2B vendors sell a single platform that is tailored to the needs of multiple customers from different industries or locations, as well as the needs of their end users.

Before building SaaS, make sure your business has the experts it needs. Working with SaaS applications requires a significant amount of time and a skilled team of professionals capable of planning, designing, developing and implementing a new solution.

If you don’t have a team yet, there are several options to choose from:

  • Hiring an in-house team on a permanent basis is useful for building and improving long-term solutions, but it means paying regular salaries even when app building is on hiatus.
  • Hiring temporary freelancers is suitable for developing applications that are not updated regularly or that stop improving soon after the first or a short series of releases. However, you will need to reunite a team in case you want to continue developing and your new team will spend a lot of time exploring the app.
  • Hiring an outsourcing software company is the best option as they offer SaaS application development and consulting services. X-Strategy Services, for example, has extensive experience working with such solutions. The advantage of this option is that you can quickly build the team of experts you need. You pay a flat fee and if you need additional work on your project, your outsourcing provider will already have documentation of your project details.

The structure of a SaaS product development team varies from project to project, but the staff skeleton is universal: the team should include DevOps, back-end developers, front-end developers, quality assurance specialists, UI / UX designers, solution architects and managers to lead development.

Now that we’ve covered the business details, let’s dive into the SaaS product development process. In the following sections, we will rely on X-Strategy Services‘ experience in developing software-as-a-service applications and present this process from the perspective of an outsourcing company.

A detailed guide to developing SaaS products

Developing a software-as-a-service application takes time and is cumbersome. It requires a lot of preparatory work, post development monitoring and a lot of professionals. To clearly understand what this process entails, let’s take a look at the SaaS development lifecycle.

Phase 1: road mapping

Roadmapping is one of the most crucial steps in creating SaaS. Includes in-depth research, planning, and app concept approval. We cannot deny sudden changes due to unpredictable external or internal conditions, such as the urgent creation of specific features, budget or time savings, or the relocation of cloud service providers. However, X-Strategy Services experts and our customers are discussing and approving the key development path at this stage. The roadmap includes:

Research and analysis

The first step is to research and analyze your needs, the expectations of your business and your products. Business analysts meticulously study the industry, competitors, and audiences to identify business opportunities, develop customer acquisition and upsell strategies, and evaluate opportunities to scale the application.

In this context, our experts create the concept of an MVP with main components (design theme, monetization model with advanced billing, user stories with style guides, mockups, functional prototype, etc.) that solves the problems of the end user and resolves issues.

Strategic planning

During planning, a lead developer can provide rough estimates of solution development times. Our customers need to clearly see how their product is improving over time and when each update is made. Strategic planning includes evaluating the most suitable cloud providers (AWS, Google Cloud, Azure, etc.), building partnerships, and announcing new features to end users. The last point is particularly important because it shows our customers the potential of the application and also demonstrates our own expertise. Especially for the B2B segment, it is important to allow end users to request features already in the strategic planning phase to plan their implementation accurately.

Communication with customers

When communicating with customers, we give them a clear understanding of how a Software-as-a-Service application is developed. We offer customers a detailed presentation of their software development and accompany them with our suggestions, because customers do not always have clear expectations vis-à-vis their applications or are not always able to accurately describe their vision. of these. A business analyst can describe potential business scenarios and processes, view revenue streams, present the benefits of partnering with a specific cloud or service provider, and highlight the benefits our customers will derive from the app in the future.

X-Strategy Services best practices in the roadmapping phase

Analyze the possibilities of a solution in a long-term perspective. Once the MVP version is released, we can continue to modernize and scale the product in any direction. That is why we must plan everything in each case in a five-year perspective. Integrations, features and partnerships have a substantial impact on the solution. Things you don’t think about at first can cause complications later. For example, a new collaboration could force us to rethink architectural design.

Standardize services and features. The customer determines the default feature set and we help them create subscription templates. It is important to analyze all dependencies, end user needs, and possible end user feature requests. Build a detailed monetization model. This model should include all billing operations supported within the platform, i.e. H. Subscription models, transaction fees, purchases, custom pricing, and trial periods. We typically implement anti-fraud mechanisms and payment privacy with data encryption and storage.

Create clear cost forecasts. Maintenance expenses are one of the critical issues to consider when developing SaaS solutions. Before presenting cost projections to clients, we consider the cost of everything: hardware, software, cloud service providers, human resources, integrations and communications.

Sometimes the collaboration between a client and an outsourcing company involves more than just clarifying details and approving a SaaS product development strategy. There are projects where customers actively participate in the analysis phase.

Our experience working with our clients’ stakeholders

In order to best meet their expectations, we encourage our clients to work closely with us in the research and analysis phase. A project where the client’s specialists supported us in the analysis was the work on a SaaS solution for RAKwireless. X-Strategy Services has developed a device management platform for maintaining IoT networks. X-Strategy Services and RAKwireless specialists provided insights that allowed us to clearly define business objectives, understand the customer’s product vision, and develop a SaaS solution that fully met our customer’s needs.

Once we have agreed on the concept with our client and completed the strategic planning phase, we start working on the architectural design.

Step 2: Architecture of the SaaS solution

Creating the SaaS application architecture is one of the key aspects of SaaS application development. This affects not only the operation of the application, but also its technological and commercial evolution. Solution architects create the design with the possibilities of fluid scalability in mind. When creating the architectural vision, it is important to consider a number of things that are usually implemented at later stages. In the future, it will help you not only to develop the app but also to test, release and update it with little effort and trouble.

X-Strategy Services best practices for building a quality solution architecture

According to X-Strategy Services specialists, here are the main things to consider:

Multi-tenant architecture. It allows a platform to evolve. To build a software-as-a-service application that can handle a large number of clients, you need a multi-tenancy architecture with a database containing information about multiple clients.

Data security. Developing multi-tenant applications requires a strong emphasis on privacy. With shared databases, there is a risk of data loss if a server goes down or if data is exposed to other users within the shared server. To protect end-user data, X-Strategy Services specialists apply data loss prevention practices and tools, data and file encryption mechanisms, and malware prevention methods when developing SaaS products. We also strongly advise our customers to implement multi-factor authentication for access control, role and permission management mechanisms.

In addition to providing standard security measures such as HTTPS/SSL, cloud databases, encrypted file storage, tenant isolation, data backups and access levels for different user roles, we consider security measures specific to business type, industry and region.

For example, the X-Strategy Services development team considered Health Insurance Portability and Accountability Act (HIPAA) requirements when developing a SaaS solution for online scheduling of medical facilities. The developers chose AWS as the HIPAA-compliant infrastructure provider, used HTTPS/SSL protocols for secure data transmission, data encryption techniques, implemented roles (RBAC) and other security measures.

Significant Architectural Requirements (ASR). To ensure architecture stability, we evaluate performance requirements, load factor, and projected growth of the architecture. Standard third-party integrations. Instead of on-demand custom integrations, it’s better to build a list of ready-made third-party integrations for payments, audits, and more. for all customers.

SLA (service level agreement). Downtime cannot be avoided. Our customers and their end users need guarantees that the platform will be stabilized quickly if something goes wrong. This is where an SLA comes into play. With our SLAs we demonstrate our desire to ensure the stability of the server in relation to:

  • High availability: A guarantee for customers that the platform is stable 99.999% of the time
  • Latency: The maximum time it takes for the service to return data in response to a user request
  • Durability: The level of assurance that individual customer data will not be corrupted or lost
  • RTO (Recovery Time Objective): maximum time allowed for restoring service in the event of an incident
  • RPO (Recovery Point Objective): The maximum allowed history of a customer’s operations that can be lost due to an incident. For example, if we set the RPO to 20 hours, after recovery the client service should be in the state it was in no more than 20 hours before the crash.

Risk assessment and management strategies and disaster recovery plans. Disaster management activities should be standardized, documented and automated. The platform must meet the specified deadlines for disaster recovery as set forth in the SLA. Therefore, every second of platform unavailability should be dedicated to recovery procedures. If the problem is new, we will review and update the recovery plan.

HA / DR strategies to minimize data loss. In the event of an unforeseeable disaster, it is the provider’s responsibility to restore the solution as soon as possible. We implement a high availability (HA) strategy to help the system cope with database or server failures and a disaster recovery (DR) strategy to cope with data center failures.

Warnings and protocols. First, key on-call and customer service teams should be notified of emergencies through communication channels associated with a company’s chosen monitoring tools. Secondly, specialists must know how to deal with emergency situations. To meet these conditions, we configure the alert system and design mechanisms for automated troubleshooting based on risk management strategies.

User lifecycle documentation. X-Strategy Services specialists create the technical documentation for three stages of user involvement with the service: registration, stay and departure. User activities on the platform, such as transactions or data management, must be documented and automated by the provider. We detail the onboarding (contracts, keys, etc.), work (billing, communication, integrations) and exit process (clearing customer data, blocking payments, limiting access) in the project documentation. These procedures are usually automated to avoid errors.

Admin dashboard for customers. Customers need a place to view their activity and billing details, customize service, and configure features. For this reason, there is a strong need for a convenient online account that allows customers to manage their business and receive top notch support.

Admin dashboard for a support team. A SaaS solution is a huge automated environment where human support is an essential element. Support specialists should have tools to communicate with customers, log into the platform under a customer support account, generate reports for the QA team, etc.

Full automation. A SaaS solution can become a gigantic application over time. To ensure smooth monitoring and maintenance, we implement the following practices:

  • CI/CD. Our specialists create deployment pipelines, implement static code analysis tools, and provide coverage to eliminate human factors and accelerate the transition to production.
  • Standardization of procedures and processes. Suppose there are several teams working on different solution components and each team makes code changes. Simultaneous or uncoordinated changes to the codebase may disrupt system operation or cause system failure. For this case and others like it, there should be a responsible employee who controls and approves pull requests.

The architecture design phase concludes with the creation of a Solution Architecture Document (SAD) that outlines key strategies and decisions. It often includes SLA justification, technical diagrams, forecasts, key principles of the chosen architectural design, business strategies, revenue streams, job requirements, communication plans, and risk mitigation strategies.

The points we described above are nice to consider in advance from a technical point of view. However, there are situations where customers prioritize urgent solution delivery to end users and want to skip some steps. Unfortunately, pursuing short-term goals can lead to architectural clutter that hinders future scaling. We would like to share how we handled such a situation to satisfy both the development team and the client.

The X-Strategy Services experience adapts to the client’s business needs

On one of our projects, our client wanted to focus on the short-term perspective and develop certain features as quickly as possible, skipping the necessary technical steps.

Our team handled the situation as follows: We rescheduled development to meet the client’s business needs. At the same time, our team laid the groundwork for future enhancements by delivering new components through architectural middle layers instead of direct integrations. Later, our team was able to implement these integrations more easily and smoothly.

After the architecture design has been approved by the interested parties, application development begins.

Phase 3: SaaS software development

The development phase of the SaaS platform is bringing our plans to life. This process requires close collaboration between solution architects and developers. The development team often chooses an appropriate technology stack (framework, programming languages) at the design stage by evaluating the industry and region in which the customer’s business operates. This approach helps developers build a robust security system and ensure that security requirements are met.

Technical specialists need to be aware of the importance of their technology decisions. Where in theory an application can be written in any language, the practice says otherwise. Given the need to scale SaaS solutions, the wrong choice of technology stack can put jobs on the line.

Requirements that X-Strategy Services always meets:

Security Requirements. We pay close attention to the relevant laws and regulations in the jurisdictions where our clients’ solutions operate. Ignoring compliance requirements can lead to financial losses for the customer. If a chosen technology is not ready to meet local requirements, we may face a situation where nothing can be changed and the only option is to rewrite everything from scratch and rethink the technology stack.

Performance requirements. Before choosing a technology stack, we evaluate its capabilities and how it will contribute to broad scalability. Wrong technology or weak technology will lead to regular database partitioning or extra allocation of computer resources. Infrastructure scaling requires additional financial resources and, ultimately, specialists may need to think about a migration strategy.

Phase 4: Test and Optimize

SaaS testing is performed throughout the SaaS development process. It involves the code, the work of specific components of the product, the correct communication of the elements of integration, etc.

In the final testing phase, our QA engineers check performance stability, availability, security, interoperability, stress and load, and business workflows to identify defects and perform parcel analysis. bottle. After vulnerability optimization, the platform is tested again.

SaaS solutions are complex and massive systems that cannot be tested manually. That’s why we use automated testing approaches to avoid human error in the design phase of the architecture.

When everything is ready, the solution moves on to the production phase.

Step 5: Distribution of the MVP version and measurement

Once the platform is deployed and available to a large audience, we monitor performance stability and collect statistics on feature usage, server and database work, and so on. After gathering feedback on the work of the MVP version and fine-tuning its performance, the team will begin work on further versions of the service, modifying the functionality based on the results of the business intelligence analysis.

Outsource SaaS development to X-Strategy Services

X-Strategy Services values ​​the experience our specialists gain by collaborating with companies and working on projects. Our team applies the lessons learned in response to the problems they face and makes every effort to prevent these problems from happening again and to ensure a smooth, automated and error-free implementation process.

Poorly thought-out and poorly prepared implementation processes can lead to system failures, poor performance, and even data loss. Also, the absence of role and authorization management mechanisms can cause unstable work of system components. DevOps and release engineers have to troubleshoot performance issues in real time, which isn’t a quick and easy task. Only work with experienced software engineering companies to avoid such problems. Yalanits supports full automation practices and uses them successfully when working on SaaS solutions.

Now you know how to create a SaaS application. As you can see, developing SaaS solutions takes a lot of time, large capabilities, and a large budget. Make sure the SaaS application development company you choose to work with is competent enough. X-Strategy Services specialists have extensive experience working with SaaS applications, developing high performance architectures designed for years of active scalability, maintaining supercharged performance and ensuring high security standards in accordance with the latest methodologies and requirements. Contact us if you are interested in working with us.