Cloud based SaaS application is a modern way of providing software to users that quickly replaces traditional software licenses. According to the IDC forecast, “total worldwide spending on cloud services will surpass $1.3 trillion by 2025”.

As you can see, cloud-based SaaS apps may soon become a dominant model of software on the market; many of them we use on a daily basis (Dropbox, Google Docs, etc.). More and more companies find Saas web platform beneficial for their businesses: Statista reports that only in the United States there were around 15,000 SaaS companies in 2021.

That is why more and more companies wish to build cloud apps. Find out how to make your own cloud-based SaaS application with our article.

What is SaaS?

Software as a service (also known as “On-Demand Software”) is a cloud based software that provides access to data from any device connected to the Internet. Initially, SaaS services were not popular, but in the last 10 – 15 years, this model has become very widespread in the software development environment.

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The idea that cloud-based software can be used by businesses was voiced back in 1961 by the scientist John McCarthy, the author of the term “artificial intelligence”. In the late 1990s and early 2000s, companies like Salesforce started to use SaaS.

Usually, such software is needed by small and medium-sized businesses that want to reduce their budget. However, although large organizations are more prone to office-administered systems, SaaS services have a lot to offer even for corporations (for example, software as a service tools are used by Aston Martin and TripAdvisor).

The main disadvantage of cloud software as a service is dependence on the Internet connection. However, it’s possible to implement the ability to work offline (data will be synchronized when the connection is restored).

SaaS in cloud computing gives a lot of benefits to both users and developers:

SaaS Advantages for Users

  1. SaaS apps don’t need to be physically installed on the user’s PC and, therefore, won’t take up any storage space. One can access SaaS web platform from any device.
  2. Cloud computing means that you won’t have to buy the software to use it. SaaS apps are suitable for any needs as they offer different pricing models: the users can buy a subscription with only basic services or extended ones. It’s also possible to easily upgrade and downgrade the subscription as soon as the business needs change.
  3. Cloud based SaaS applications have a high level of security and all the data is reliably protected.
  4. There is no need for a complex setup and software maintenance: as usual, you just need to create your own account and that’s all.
  5. Cloud-based apps update automatically as the development team constantly works on their improvement. There is no need to download and install updates manually.

SaaS Advantages for Developers

  1. The developers will be getting revenue on a regular basis from subscriptions. With this monetization model your income is more or less predictable
  2. You can attract more users by scaling your SaaS app, making it accessible for users who are on a budget and for those who are ready to pay more. In the case of op-premise software, implementing scalability is a problem.

How to Build Cloud-Based SaaS Application in 9 Steps

Step 1. Create a Visualization of Your Project

Before proceeding to development, you need to have a clear concept of what you are going to do. Conduct a market research and highlight your idea: think about problem that your SaaS solution could solve. Look for comparable SaaS products available on the market to find out if your idea is unique or not. You should also ensure that the SaaS model will work for your app.

Step 2. Define Your App’s Functionality

After research, you may start thinking about the key functions that can attract your customers and make them sign up for a subscription. It’s recommended to add functions that will allow for a high level of customization (add customizable templates, give more manageable capabilities, etc.). You should also understand how to create software requirements specification (SRS). An experienced SaaS software development company can really assist you in writing a decent SRS document for your product.

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Step 3. Choose a Technology Stack

Choosing the right technology is an important part of SaaS application development. According to modern trends in the web development world, you can choose from such technologies:


For frontend development, you can use such JavaScript frameworks as Vue.js, React, and Angular.


Select a programming language depending on the main characteristics of your product. For example, if your app is data-sensitive, choose PHP (Laravel). You also can resort to Python (Django) and JavaScript (Node.js).

Backend Storage

It’s recommended to consider MySQL, MongoDB, or PostgreSQL when choosing the most suitable database for backend data storage.


The choice of servers is narrowed down to either Apache or Nginx.

Step 4. Decide on How Your are Going to Sell Subscription

When it comes to cloud-based SaaS application service, there are no strict rules in terms of pricing. For example, you can make a free trial for several days to attract more potential customers. A good idea for this purpose is to make some functions charge-free. However, this is not necessary if you already have a base of potential customers. It’s recommended to make 3 types of subscription:


For those who are not willing to pay a lot for subscription and don’t need more than just basic functions.


Type of subscription that opens up a few exclusive functions for customers and has a middle price.


The most expensive subscription that gives a full set of features to the clients. Often, dedicated customer support is included in the price.

Depending on the type of your app, you can develop your own pricing strategy which will be fundamentally different from the rest. However, if you are not sure of the immediate success of your app, don’t lead an aggressive pricing policy, making the prices for subscriptions higher than those of your competitors.

Step 5. Define Budget for SaaS Application Development

When defining the cost of your project, you should consider such points:

  • Costs for business plan development
  • Labor costs
  • Software costs
  • Advertising costs
  • Cloud platform costs

You should also understand that the costs may vary depending on how large your project is. Obviously, a basic app MVP will be much cheaper to develop than a large SaaS product.

Step 6. Hire SaaS Developers

After you come though the basic stages of the process, you can start thinking about hiring a team of dedicated developers. You are going to need such experts as designer, software developer, analyst, and project manager. Look for flexible specialists that can provide a variety of software development background to suit your business needs. There are 3 the most effective ways to find such specialists:

Hire a Team From SaaS Development Company

Cooperation with an experienced SaaS development company is the perfect solution when you are dealing with a complex SaaS product. Such a company has all the resources, experience, and skills to complete your difficult project on time.


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This is a less expensive option for hiring talented SaaS developers. Consider bringing in the specialists from freelance platforms if you want to save your budget and your project is not difficult to accomplish.

Hire an In-House Development Team

Hiring an in-house team seems like a reasonable option, but this will significantly increase the costs. You need to pay your workers on a regular basis, find a workspace for them, and constantly provide them with work.

Step 7. Create an MVP

Creating an MVP for your SaaS product is essential for testing the core features before you deliver the end product to your customers. User feedback will help you identify weak points in your SaaS application and fix them.

Step 8. Remember About Regular Updates and Maintenance

Regular updates are important for satisfying all the needs of your users. Keeping in mind the latest market trends and user requests, you should provide updates and fix errors timely.

Cloud Based SaaS Solutions: What’s the Price?

The costs for cloud-based SaaS application development vary depending on the product’s functionality, complexity, etc. It also depends on the country where the app is developed. For example, in countries like the USA and Canada, you will probably have to pay more than $150 per hour for development. The price will be lower in Western Europe (up to $120 per hour) and Eastern Europe (up to $75 per hour). The lowest prices are in Asia and South America (up to $45 per hour).

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All these means that the price for a simple app may start from $15,000 and reach $100,000 and more.


There is a high demand for cloud-based SaaS application on the modern market which means that you have high chances to create a successful product. During the cloud based application development, you should make sure that you will provide a reliable and consistent service to your customers, or nothing will stop them from starting to use your customers’ products.

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