With the emerging use of cloud services and the internet, enterprises are moving from traditional applications to Software-as-a-Service (SaaS) platforms. As per Gartner, the SaaS end-user spending is anticipated to breach the $591.8 billion mark in 2023. SaaS applications are the most current trend in the industry, and every organization should plan to have a SaaS application rather than a traditional one. Having a clear understanding of the different factors involved while building SaaS applications in 2023 is essential. This article is an assortment of expertise of industry leaders that provides insight on SaaS applications, including the development process, latest trends, SaaS architecture, development process, and challenges.

What is SaaS Application Development?

A SaaS application is a way of delivering software over the Internet-as-a-Service. In traditional applications, users must run the setup process to install the App on their system. Not only is it time-consuming, but it requires additional resources as well. However, rather than installing software, with a SaaS application a user only needs to access it through the internet via a browser, eradicating the installation and hardware aspects of the process.

Such applications run on the developer or application service provider’s servers, managing the entire application for you, applying updates, etc. Though it varies with the application, SaaS Apps are mostly offered on a subscription basis, where the user will simply pay to use the software for the desired duration. One of the most significant advantages of SaaS applications is that the maintenance, compliance, and security actions are automatic. They can be used on multiple devices and will have the same configuration on all devices. 

Benefits of SaaS Applications

The reason why startups and enterprises prefer SaaS applications is because of the benefits offered. Here are the primary advantages that you will get from developing such applications.

1. Cost Effective: SaaS applications may come in shared or multi-tenant nature, reducing the hardware and licensing cost compared to traditional software. Furthermore, the maintenance cost is lower for SaaS applications, making them more cost-effective in the long run. 
   
2. Remote Access: The world has shifted substantially from office working to a work-from-home model, and this new way of working requires access to many tools that need to be installed on a remote system. SaaS applications have supported the work-from-home model as the users can access the software and tools from any device they want, as long as they have the proper login credentials and permissions to do so. There is no need to install any software, making it easier for work-from-home employees to perform their job. 
   
3. User Friendliness: Every developer wants to make their software as user-friendly as possible. As SaaS applications can be accessed from several platforms and on different devices, including computers, smartphones, and tablets, they are already more user-friendly than other applications. In addition, the learning curve is straightforward, making it popular among new users. With better customization options, users can customize the app in any way they want, making it easier for them to become familiar with the software.
   
4. Data Security: Users are always concerned about their personal data’s safety, especially when using cloud-based data backup services. Having secure login credentials is undoubtedly the duty of the user. However, as a developer, you can add additional layers of security like anti-phishing programs and multi-factor authentication.

SaaS Application Trends in 2023

SaaS applications are cloud-based and can be made to fulfill any functional requirements of the users. When building SaaS application, knowing about the latest trends is pivotal as it will help stay ahead of the competition and target the audience better. Below are the top SaaS application trends in 2023.

• Collaboration Tools: The COVID-19 pandemic forced organizations to let employees work remotely. Several organizations have even allowed their employees to work remotely permanently. And all this is possible because of the collaboration tools that help enhance remote collaboration with different employees and teams no matter where they are located. Even though Slack is the current leader, the industry is extremely new and wide, and there is a high demand for new SaaS applications.
  
• Artificial Intelligence: Artificial intelligence has been talked about in the technology industry for decades. Currently, organizations are trying to get the most out of real-time AI analytics to provide customers with what they want. For instance, Netflix uses its AI to offer suggestions based on what the viewer may want to watch.
  
• Open API: Application Programming Interfaces, or APIs, allow the integration of SaaS products with other programs. With APIs, your users can integrate their current systems with your SaaS software. Furthermore, they can synchronize their database without any manual effort. Building an API will make it a lot easier for your users to work with your application and give you an edge over SaaS Apps that do not have APIs.
  
• Vertical SaaS: Horizontal and vertical SaaS applications always compete in the industry, and the trend suggests that vertical SaaS will be expanded in 2023. Horizontal SaaS tries to provide as many functions as possible in a single software application. On the other hand, vertical SaaS is all about fulfilling the specific requirements of a user unique to their market segment. The reasons why vertical SaaS will be a trend in 2023 are that the market is becoming less competitive, and therefore there are more opportunities for business growth.

Best Practices to Build SaaS Applications:

Specific actions or processes are considered the most effective, and these are considered the best practices. Rather than beginning the SaaS App development process ad hoc, knowing the best practices that will help make the App better and the process smoother is necessary. The following are the best practices for SaaS app development.

• Take the Backwards Approach: At present, SaaS applications are taking users by storm. Almost every user on the internet is using a SaaS application knowingly or unknowingly. The reason behind this is that they fulfill the user’s needs. With that in mind, building a product suitable for the users is necessary. Rather than starting with your idea, understand what the users want. This approach is called the backward approach and is used by legions of leading organizations for building a SaaS app.
  
• Easy Integration: Every SaaS developer’s priority should be to ensure that their developed product integrates with the user’s environments, be it cloud, hybrid, or on-premises. Having APIs is currently trending for SaaS apps, and missing out on it can be catastrophic for this type of software.
  
• Subscription Model: Undeniably, SaaS applications have replaced traditional software applications and eradicated the need for lengthy installation processes on the system. Furthermore, it has become affordable for users as they have to pick subscriptions rather than paying a large chunk for the service. Having a subscription model allows the user to determine whether they should be using the SaaS App or not.
  Implementing a subscription model is undoubtedly the proper practice, but it is not the best. The best practice is to have multiple subscription options for tiers of service depending on the features provided to the customer. This gives a better scope of offering the services while giving flexibility to the user when choosing the SaaS App.
  
• Future Approach: Building a SaaS product may not be a significant deal, but having a long-term vision for the users is the way to ensure that your product remains functional. The SaaS App you develop should adapt to the upcoming needs of the future. The key is to have short-term and long-term plans for your application so that it can not only tackle the rising demand in the future but also have certain features in the development pipeline that will be best to release in the coming months or years.
  
• Monitor User Behavior: Features in a SaaS product can be altered or added in the future. But how to know which modifications to make? The answer is by analyzing user behavior. By understanding the behavior of users on your application, you can create features that help in enhancing the quality of the product. With analytics, you can determine the most and least used features so that you can evolve the app as per the changing behaviors and desires of the users.

SaaS Application Architectures

The architecture of SaaS applications is what makes them popular and useful. However, this architecture is unique for each application, but it can be divided based on certain factors so that it can be understood better. This section will divide SaaS architecture into two: based on functionality and component shareability.

1. Industry and Functionality: Depending on the industry and functionality coverage, SaaS apps can be divided into Vertical and Horizontal SaaS. Both are unique in their way and serve the necessary purpose.
   • Vertical SaaS: Vertical SaaS application is a type of SaaS architecture that focuses on developing apps for a particular industry like finance, retail, healthcare, and many others. The application will have several functions in such an architecture but will be helpful for only a specific industry. Though it may narrow the user base, it fulfills the requirements of multiple organizations in a single industry, broadening the scope.
     
   • Horizontal SaaS: Horizontal SaaS application focuses not on the industry but on the functionality they want to provide, including marketing, communications, collaboration, and sales. Such functionalities are not limited to any specific industry and can be used across different businesses. A horizontal approach broadens the reach of the application. However, users must be specific on what features they want before picking a horizontal SaaS application.
     
2. Component Shareability: The SaaS tenancy models are based on tenants (discrete groups or organizations of users), and they are considered the fundamental components of SaaS Apps. A tenant is any users utilizing the SaaS application. There are three primary SaaS tenancy architectures, which are elaborated on below.
   
   • Single-Tenant Architecture: A single-tenant architecture provides the SaaS software to a single user who pays for the desired service. The tenant will obtain the software, a single server, database, and infrastructure. The perk of this architecture for the tenant is that they do not have to share any of the aforementioned resources with any other tenant. Furthermore, they can customize the SaaS software in any way they want.
     
   • Multi-Tenant Architecture: Multi-tenant architecture is one of the commonest architectures used in a SaaS application. Unlike single-tenant architecture, resources like database and app information are shared with multiple tenants here. However, the individual user data is secured separately, ensuring utmost data security.
     
   • Mixed-Tenant Architecture: As the name suggests, mixed-tenant architecture is the blend of single and multi-tenant architectures. In this SaaS application architecture, single or multiple parts of the application are assigned to a single tenant, whereas the remaining are shared between different tenants.

SaaS Application Development Process:

Building a SaaS application requires a systematic approach that should be followed to make sure that the application is feature-rich and secure. Here is the step-by-step process of developing a SaaS application.

• Step 1: Planning– Planning is the foremost step in building a successful SaaS application. In this step, you need to determine the technology you will use, the target audience, the type of SaaS application you will create, the primary features, and the motive for building the application.
  
  Furthermore, planning will help in managing technical debt as well. Lack of preparation can increase costs and reduce the overall return on investment. Considering that fact, planning the development process and determining the necessary tasks should be your priority in the first place.
  
• Step 2: Discovery – The second step in the SaaS product development process is Discovery, where you need to create the development plans of the product. In this phase, the business analysts will identify the project details and information regarding the following aspects:
  • Risk Assessment – It identifies certain risks that may occur during the development phase and the actions that can be taken to reduce such risks. 
  • Cost Analysis – It analyzes the estimated cost of developing the planned SaaS application. 
  • Software Requirements Specification – This part highlights the application structure, dependencies, groups, and other features.
  • Feature Breakdown – This will include the features you want in your app and the estimated time to build them.
    
• Step 3: SaaS Model Design– In this phase, you will determine the SaaS model design, which includes its user interface and user experience. Make sure to design the interface in a way that fulfills the requirements of the target audience. As SaaS applications support multiple platforms and devices, the UI/UX should be compatible with each type of device so that the users can utilize the app on any device they wish without compromising the app quality.
  
• Step 4: Cloud Computing– SaaS applications are cloud-based, and it is essential to manage the cloud environment on the service used by the App, be it Amazon Web Services, Microsoft Azure, or any other cloud. Additionally, creating an architecture design that showcases the connections and components of the SaaS application should also be done in this step.
  
• Step 5: Development and Testing– This is the phase where the actual SaaS application development will take place. Being an elongated process, it is divided into several subparts so that understanding the process becomes easier.
  • Technical Specifications– The first step in the development phase is to obtain details on the trends, target audience, technology stack, and competition. With this information, you can determine your application’s functional and non-functional needs, which could help you create your Minimum Viable Product (MVP).
    
  • Determine the Revenue Channel: Without a doubt, maintaining a SaaS application requires finances. You need to determine your revenue model as it will not only decide the structure of your App but the future as well. The subscription model is the most popular SaaS app revenue model. However, you can also opt for advertising, freemium, or any other revenue model that you feel is suitable.  
    
  • Pick a Cloud Provider– Your SaaS application will rely heavily on the cloud infrastructure provider you choose. The next step is to pick the most reliable and suitable cloud provider that will offer the right services, fits the budget, and ensures utmost data security. The cloud infrastructure provider should also come with flexible options to choose from and should support third-party integrations as well. 
    
  • Build Your MVP– MVP is like a trial application that comes with basic features and is released to a small number of users. Creating and releasing the MVP is one of the most crucial aspects of SaaS development so the process should not be rushed.
    
  • Test and Implement– Once the MVP is released, you need to obtain feedback from the users. Getting feedback from the users will help in understanding what the users want. Moreover, making changes in the SaaS app is easier in this stage as compared to later stages. After getting the feedback, you must make the necessary changes to the SaaS app.
    
  • Commence Development– In this phase, the development team will begin writing the code in the desired language and using the necessary frameworks and tools. The team’s priority should be to ensure the utmost code quality and meet the SaaS product’s set requirements. Agile methods are proven to be effective in enhancing development speed, so implementing such methods is going to help in the process. In addition, quality assurance testing should be done in every phase of the development process.
    
  • Release– Once QA testing is done, the application is ready to release to the users. The SaaS app will become available to the users and user acceptance testing will begin.

SaaS App Development Challenges:

SaaS application development is not just about building the application using the right tools and best practices, but also tackling the challenges that come midway. Knowing about the most common challenges helps in creating a plan that will aid in meeting the challenge. Here are the common SaaS app development challenges you may face during the process.

1. Subscription Lifecycle Management: A subscription lifecycle includes trialing, subscribing, upgrading, canceling, and resubscribing. However, managing this entire lifecycle is a challenge every SaaS application developer with a subscription model must face. Improper management of this lifecycle can result in not just monetary loss but also the loss of a user base. A tailor-made payment and subscription solution is the best way to tackle this challenge and ensure that subscriptions are managed effectively.
   
2. Third-Party Integration: Payments are the most significant part of the SaaS application as the entire future and maintenance rely on the revenue it generates. However, payment in most SaaS Apps is achieved by integrating a third-party payment service. In most cases, this third-party integration is a bit challenging with the SaaS App. This challenge can be met by performing manual and automated tests to ensure that the payment integration is completed successfully.
   
3.  Zero Downtime during Deployment: Updating the application is necessary to keep the users hooked and provide them with something new. The biggest challenge during the new version deployment is downtime. Even if it is scheduled downtime, it will still affect the users. Implementing the blue-green deployment strategy is the way to make zero-downtime deployment possible.

SaaS Application Development Services by ThinkSys:

Understanding the SaaS app development process is undoubtedly a positive step toward building an App. However, making a stable and intuitive program requires sheer practice and the utmost skills. If you want to have a SaaS application, the best thing you should do is seek professional assistance. ThinkSys is an industry leader in providing SaaS application development services. 

Our team includes professional developers and testers who will perform every step of the process carefully and with the best practices. Furthermore, we use leading development tools to ensure that the created application performs as anticipated always. Here are the different SaaS application development services offered by ThinkSys.

Frequently Asked Questions(SaaS Applications)