Why is a SaaS development company irreplaceable nowadays?

SaaS, or Software as a Service, is one of the most promising areas in the IT market. According to the British analytical company Technavio, its share will only increase every year. Analysts expect that the average annual growth will be 11%. Now, more and more companies are thinking about moving to this cooperation model and looking for the best SaaS development company.

Only because of this is it possible to say that this software will help some firms to succeed. If you, too, are thinking about developing a similar product, now is the time. The more profits this field generates, the harder it will be to get into it in the future.

Does it make sense to find a SaaS development company immediately?

The hype surrounding this topic is not a blown bubble. Business owners are actively following the publications of analysts, evaluating the possible pros and cons. At this stage, the given direction is promising for development, as the previous forecasts of experts confirm it. 

In 2019, Technavio professionals also assumed a systematic growth of this area. At that time, analysts talked about a steady growth of $60.3 billion between 2018 and 2023. 

By now, experts are predicting growth of $99.9 billion by 2025. These are colossal numbers, even in the current context of rapid industry-wide development. 

In the future, the growing trend will likely continue, and SaaS development companies will be in incredible demand. It is especially true for programmers with niche experience, who can close the specific tasks of firms and better develop the product because of the industry specifics.

What is a SaaS, and what are its features?

Despite the increasing popularity of this field, not everyone fully understands the essence of this method and the principles of its operation. In simple terms, a SaaS (Software as a Service) is a model of distribution of various programs in which customers pay for the ability to use the software.

How it works:

• a firm creates a specific web-based program on its own or hires a SaaS app development company for that purpose;
• then the software owner hosts his product in the cloud and makes it available to customers over the internet;
• the company-owner afterward distributes and manages the software (or outsources this task to a SaaS development company);
• users pay for the possibility to use the application features via the internet.

Because the software is stored on a separate platform in cloud storage, purchasers do not waste storage space on their devices. Moreover, the software provider gives its customers limitless options for handling different types of data. 

When a client buys a subscription, they can use all the SaaS and application interface options to edit, update, transform, or collect information. One of the advantages of this solution is that the service is managed entirely by the service provider. Users themselves do not have to worry about updates, expanding the storage space, etc.

Types of Software as a Service and its business models

Before contacting a SaaS app development company, it is highly critical to decide on software. In a professional environment, programmers divide these applications into horizontal and vertical.

1. In the first case, software vendors focus on a particular category of applications. These can be tools for photographers, web developers, marketers, etc.
2. In the second case, the software owner covers the needs of a particular industry. For example, it can be a niche of automotive, sales, or real estate. That is why it is vital to hire a SaaS development company with experience in the required industry for such projects.

The companies which will develop the app or want to order it from a third-party partner should do thorough research for the product to be successful. It will help choose the suitable business model for the product distribution, target audience, benefits, and risks. 

If a SaaS development company builds a project from scratch, then this responsibility lies on it. But business people should be prepared that such a service will have to allocate an additional budget for service.

To date, there are the following business models for this type of software:

• subscription;
• bottom-up;
• fintech.

Monetization based on the subscription principle is the most understandable for users – they pay money and get the necessary tools and services. What about the others? The bottom-up model can include several monetization options, the best known of which are freemium and trials.

Fintech is the most difficult for clients to understand, as it is divided into several other business models. It includes traditional banking applications and insurance digital business, digital wallets, wealthtech, and many others.

Examples of the most popular and promising SaaS applications in the world

Even if today's people think they have never experienced the phenomenon of Software as a Service before, this may not be so. The most prominent example of this type of service is Google Docs. This free text editor allows users to store, edit, and share text documents. Only unlike commercial applications, Google Docs is a 100% free solution.

Other well-known software of this type:

• Salesforce;
• Dropbox;
• HubSpot;
• ZenDesk;
• Canva.

Also, recently, programs that are funded by the state are gaining momentum. It is an excellent chance for both businesses and a SaaS development company to conquer various industries. The most striking example in the industry is the Sedaro Satellite project, which helps specialists in model-based satellite engineering. The USAF will fund the development of this project for $1.7 million, which is a great motivation for other products in different industries.

What are the tasks of a SaaS development company for business?

A SaaS development company directly builds any category of SaaS solutions that the provider places on the internet. Also, firms can host applications on their own servers, but startups and small companies do not have such opportunities.

Both the software provider itself and a third party can act as a SaaS application development company. In today's reality, small businesses and startups perform the initial stages of product development on their own. It has advantages and disadvantages.

Pros and cons of independent development of Software as a Service solutions

Advantages

1. Budget savings and a gradual investment of cash
2. You know all the features of the product
3. Deeply diving into the process
4. You can independently build a dream team and enthusiasts
5. Can get to see the target audience and its needs

Disadvantages

1. You need to hire more than one developer
2. Can make mistakes, which can be costly
3. Your employees may not cope with the specific tasks for a particular niche
4. The cost of a mistake while creating a product without experience is much higher
5. You risk spending the budget before you get the funding

If you have never had any experience creating such solutions, it's better not to take the risk and hire a SaaS development company. Since such firms specialize in building applications, they will surely help you with specific tasks faster. Even with a limited budget, you can extend your team with at least one experienced developer to make the project more competitive for the market.

What you need to take care of when hiring a SaaS development company

Future software providers need to follow a clear plan to have a competitive advantage when launching your product. Without a roadmap for creating an application, you cannot find the right SaaS development company and see your unique benefit.

There are 7 simple steps you need to follow:

1. Form a project planning team or hire the necessary experts from a SaaS development company – it will allow you to draw up a plan and develop a strategy that will come in handy in creating the product. It is also important to think ahead about the software architecture and take care of the business documentation that you will provide to your development team or third-party programmers.
2. Decide on the final business model and its viability in the chosen niche – already mentioned above about how you can monetize the product. At this point, your task is to figure out which business model is most relevant to your SaaS solution. Several experts can help you with this task: a business analyst, a marketer, and, in some cases, a sales specialist. Only you should understand that in a SaaS development company, most often, you won't find such experts. They are not part of the full-time team, so you need to interact with freelancers or use an outstaffing service.
3. Research audience needs and user requirements for the type of projects similar to yours – both a business analyst and a SaaS development company will be of great help in this matter. BA will conduct a thorough analysis using the most popular tools (TA interviewing, feature set evaluation, dashboards, etc.). At the same time, the partner firm can share the relevant experience from personal experience, advise on the best solutions for the interaction with different gadgets, possible further development of the product, and so on.
4. Do not rush to implement all the possible functions – at the first stages, it is better to choose the minimum set of options and make the project just viable. In professional circles, this is called the creation of an MVP (Minimum Viable Product). The essence of the approach is that you spend less time, effort, and money on its creation, but it helps collect feedback from real people and get a real evaluation of the project. This way, you do not lose money on implementing functionality that may be useless for the TA.
5. Set specific goals and tasks for the selected SaaS development company – it will help you evaluate key performance indicators and trace the path of project growth in detail.
6. Buy your servers or choose a cloud platform – when your budget allows, you can buy your own servers for data storage. However, most firms still prefer to use a proven cloud platform. Ask your SaaS development company what solutions they use frequently and for what reason.
7. Make a final list of technologies and tools used in development – most likely, your firm will pick the primary solution for action even before selecting the appropriate partner. At this stage, you need to choose more precisely what kind of tools will be involved in the development, deployment, maintenance, and other phases.

Depending on the specifics of SaaS and your goals, you can add some other cycles to this guide. However, the average workflow will look something like this.

As you can see, the process of creating software is not an easy task. Without enough experience and skills, business owners are better to seek help from a SaaS development company. The main thing is to choose a firm with expertise and programmers with a solid technical background, like AVA.codes!