Due to the significant increase in the demand for remote cooperation, services that provide the best software are getting popular. Therefore, the creation of a SaaS app is likely to be a great solution.
So how to find out the cost of building a SaaS platform?
To help you find the answer, we used our company’s experience in creating cloud products.
In this post, we provide approximate SaaS development cost estimation and list the key factors that may affect the price.
❓ What Factors Impact the Price of Creating a SaaS Product
You weighed all the pros and cons and decided to create a Software-as-a-service application. And now you want to find out the cost to build a SaaS application and how long the development will take.
Of course, there is no simple answer.
The price may vary between $20,000 and $700,000 or beyond.
It doesn’t sound like a definite price, right?
Well, the cost of building the SaaS product always depends on dozens of factors that have a more or less notable impact.
To study the topic in more detail, let’s find out which aspects are the most influential.
- Scope of your SaaS app
- The Features
- API Integration
- Selection of the Platform
- Making Tech Decisions
- Setting Deadlines
- Additional Spendings
The essential functions are those that help to fulfill the purpose of your product. Every new feature you want to add impacts SaaS app development cost. Therefore, add the basics first.
Scope of your SaaS product
Here is the first thing to decide.
Will your SaaS app be a platform or a tool? These two types of Software-as-a-service differ not only in the essence, functions, and target audience.
It influences the cost to develop SaaS application together with the time required for the development. To decide wisely, make sure you see the difference between a tool and a platform.
The SaaS tool has a more limited scope and is set to manage several key functions.
In other words, the tool is focused on providing a specific area with everything necessary but can’t be used for multiple purposes.
The most popular example of a SaaS tool is Buffer, created to manage social networking accounts.
The SaaS platform has a wider scope, using several tools and having more functions. Accordingly, they have more goals and reach a wider audience of users. For instance, huge services like Facebook offer users different tools that serve different purposes.
If you haven’t built a clear vision on how to launch your app yet, try the SaaS tool first.
SaaS software development cost, in this case, is not so costly, not taking so long to produce. Besides, you will have a chance to consider expanding the features in the future.
The Implemented Features
The features your SaaS app needs will depend on the aim of your service. If it’s a simple tool that focuses on one area, it will be enough to include only the basics at the beginning of the project. But more complex platforms with expanded scope may need some extra functions to be implemented.
Here is the list of a few key features that almost any SaaS app has to contain.
User Management and Permission
Custom management features are determining for many SaaS apps. These are signup for registration, login, logout, and editable user profiles. It’s also worth considering a single sign-on option for not making customers enter passwords for each application separately. Besides, the users need to be able to reset and change the forgotten password.
For permission control, one can include options to add and remove users. Role-based access is important to control the abilities of multiple users.
Most users will need access to data analytics, viewing metrics, charts, and graphs. If your audience is in the business intelligence field, a dashboard is a must-have feature for your app. For instance, your app needs to supply users with reports or track real-time changes and provide notifications.
Dashboards are used in the BI field. Moreover, they can supply users with information about weather, time of sleep, or changes on the stock market.
In addition, creating an analytical dashboard is beneficial for your team. Armed with this tool, the analytics will track the number of users, payments, and other important information for your business’ growth.
Audit trail and security functions may be needed to prevent unwanted activity and control the environment in your app. As long as SaaS applications usually provide data, services, and cloud storage for many users, security is a core component. Your app should be trustworthy.
The need to use communication tools depends on the purpose of your app. In many cases, users need to chat, receive notifications, or even have voice or video calls. Storage of documents and sharing them are other features a SaaS app may include.
You may also add messages or emails sent inside of the system. In this regard, using integrations with some email service providers would be a good option.
Billing and Account Management
This feature is required to display payment history and collect information on successful and unsuccessful charges. Not to deal with this data independently, you can use the service of an external hosting.
Account management is another tool that helps you control the number of upgraded and downgraded subscriptions, deleted accounts, billing failures, and other things that will be worth noting.
API (Application Programming Interface) is software that makes interactions between apps possible. The data is sent to the Internet server and after returns to provide you with the required information. In contrast, your back-end system enables the app to process the data on its own.
So the choice is between using API integration and building back-end functionality from scratch. Any Software-as-a-service needs certain back-end functions to work with the data. For instance, most SaaS businesses choose to use APIs to integrate their payment system with huge services such as PayPal or Braintree.
Choosing APIs will help you cut some costs, although you will have to pay some fees for the maintenance. It also allows skipping some stages of app development. What is more, using API integration, you are much more likely to scale your business.
Like any other app, SaaS can be developed for different platforms. Choosing between web and mobile, take into account your app’s goal and target audience. For instance, B2B companies prefer using a PC platform, as it is more typical for their employees to work on the big screen.
Although the content of the mobile and web app is the same, the UX differs considerably. The idea of making your application on two platforms at once may sound attractive. Still, it will also increase the cost. Try to start with a project for a single platform and think about expanding after a while.
The approximate timeline of SaaS app development is about 3 - 9 months or even longer.
Same as the price, the timeline depends on complexity, features to be included, and the stages you should go through before launching your app. Building an MVP or a POC to see if the project is viable should also be considered. Creating a demo version of your app usually takes less time and doesn’t require a large budget.
Setting time limits is crucial to any business. However, you need to assess your project objectively. Clarify possible time frames with your development agency.
⭐ Estimating the Cost of Developing a SaaS Product
There are a few key stages that take time and require investment. To estimate SaaS development, let’s analyze each level of development and set approximate price tags. Note that the prices also vary due to your project’s complexity and the location of the development team you choose to work with.
You will have to undergo the following stages for building a SaaS product:
- Validation and planning (40 - 250 hours)
- Creating MVP or POC (300 hours or more)
- UI/UX design (120 - 250 hours)
- Front-end development (400 - 600 hours)
- Back-end development (up to 800 hours) could be reduced by BaaS
- Project management and post-release maintenance
Validation and Planning
If you have a clear idea about your product, the next steps are to get feedback from potential customers, define product goals, and prepare a good plan. Obviously, it’s quite hard to develop a budget for SaaS app development. So if you look for investment for your startup, you may need to start by creating an MVP (Minimum Viable Product). This type of app includes only basic features. At this stage, you will understand if it has a future. It’s important to find out if you are moving in the right direction.
To build an MVP of your SaaS app, you will spend $25,000 - $80,000 for a non-complex project.
Prices of Building the UX for a SaaS Product
UI/UX design is a core stage of your SaaS product development since it defines how the interface will look and what user experience it will suggest to the customers. UX can be considered one of the most important parts of development because it is meant to create all conditions for the users and meet all their needs.
Testing is also an important stage, giving you information about whether the User Experience of your product suits the audience. Test your app at each stage of development and use the feedback you’ve got after launching your MVP to make UX even more user-friendly.
The approximate price of UX design is $30 - $50 per hour. The average time of designing a non-complex SaaS app is about 3 weeks.
Cost of UX design for a SaaS app
|Stage of development||Approximate timeline||Hourly rate range||Average cost|
|UX design||3 weeks||$30 - $50||$3600 - $6000|
Cost of Building the Front-end for a SaaS Product
First, select the right tech stack for your SaaS app. These are technologies used for front-end, back-end, and mobile development. To make your choice wisely, keep in mind all core features of your app. Some frameworks are better for the purposes your app may have.
Front-end development price is also not easy to estimate because of the factors you need to consider.
Working with an in-house team will be more costly than with outsourced ones. Hiring a freelancer will be the most economical option. But what you need to think about first is the quality of work and convenient communication.
The average price of the front-end developer’s work will be somewhere between $20 and $80 per hour. All stages of front-end development take about 10-12 weeks.
Front-end development cost for a SaaS app
|Implemented feature||Approximate time||Hourly rate range||Average cost|
|Creating documents and uploading files||1 - 3 weeks||$1,600 - $6,400|
|Search||1 - 2 weeks||$700 - $2,600|
|Preview and download||2 - 4 weeks||$2,300 - $9,300 (and beyond)|
|Sharing, access tool, export||1 - 2 weeks||$700 - $2,600|
|Total||10 - 12 weeks||$20 - $80 per hour||$5,300 - $21,000|
Costs of Building the Back-end for a SaaS Platform
As was mentioned above, the complex back-end of a SaaS app requires creating it from scratch. This method is much more expensive, but you should use it only in exceptional cases. A much more typical and cheaper way is to provide a back-end via APIs. Considering that the back-end creates the necessary data structure and security, it cannot be skipped.
The average back-end development price is between $20 and $100 per hour or more, depending on the complexity of the functions. The approximate time it will take to deal with all stages might be more than 20 weeks. Read about How to hire backend developers.
Back-end development cost for a SaaS product
|Implemented feature||Approximate time||Hourly rate range||Average cost|
|File managemen||10 - 12 weeks||$6,400 - $12,800|
|Push notifications||2 - 3 weeks||$1,600 - $8,000|
|Search||4 - 6 weeks||$3,200 - $16,000|
|Previews||2 - 4 weeks||$1,600 - $8,000|
|Export||2 - 3 weeks||$800 - $4,000|
|Total||20 - 28 weeks (or more)||$20 - $80 per hour||$13,600 - $69,800|
You can reduce the bill drastically by using backend as a service, and choose one of the best BaaS providers. Learn also about most popular backend frameworks.
Read also: Software Development Pricing Models: Which One Best Suits Your Needs?
If you have successfully developed and launched your SaaS app, it’s still not over. To calculate the cost to build a SaaS app, you need to go even further. Any SaaS product is set to work for a wide target audience. So it requires constant updates, fixing bugs, improvements, and adding new features to stay relevant and satisfy users’ needs. Continue working with your development team to get professional support and maintenance of your SaaS app.
Hiring a professional project manager and a good team for the further development of your project is critical. Your product doesn’t exist just to survive. It has to evolve to help people and be competitive in the market. It means that promotional campaigns and marketing will require investments as well.
Some of the additional SaaS app development costs will be related to legal licensing, subscription, and more, depending on your product’s nature.
Read also: How to speed up your SaaS time to market.
📱 SaaS App Development Regions
The type and location of your development team also have a great impact on the price of building a SaaS product.
First, choose the type of specialists you will work with. You may entrust your project to a freelancer or a developing agency. Independent contractors normally have a lower hourly rate. But working with a development team has several major benefits:
- You will hand your project to a team of skilled professionals with relevant expertise. You won’t have to look for each specialist separately.
- Development shops keep constant communication with their clients and report on all stages of production.
- You will have more clear agreements and timelines to make sure that your project will not be frozen.
If you want to hire a SaaS developers, here comes another decision to make. Will it be an in-house or off-shore agency? The prices differ significantly.
The cost of SaaS application development in the USA or Canada is the highest. Shops from Western and Eastern Europe offer the middle range of prices. The cheapest options are to choose an outsourced agency based in Southeast Asia or South America.
The main advantage of in-house app development is that American and Canadian companies offer constant communication and the ability to check the progress of development visiting the office. However, nowadays, even in-house companies often work remotely. The fact that North-American cost to build a SaaS system is twice or three times more than European, it is worth considering the option of outsourcing.
Remember that higher prices don’t often guarantee better quality.
The pricing flexibility is due to the difference in economic conditions, market features, and general cost of living. The potential problems of picking an outsourced agency are communication issues and time zone differences. But if you are open to cooperating with off-shore companies, they can offer good quality and a reasonable price.
Here are the average price ranges for SaaS software development in five main regions.
|Region of SaaS app development||Hourly rate range|
|North America (the USA, Canada)||$40 - $270|
|Western Europe||$30 - $120|
|Eastern Europe||$25 - $85|
|South America||$20 - $70|
|Southeast Asia||$15 - $50|
🏆 Company Experience
The Acropolium team has been delivering solutions for different kinds of complex software for 17 years. We’ve faced an impressive amount of different cases and challenges concerning various SaaS products throughout this time.
Here are the core areas where our team has delivered SaaS solutions:
- Supply Chain and Logistics
- Risk Management
- Business Automation
If you want to launch a successful app, these two examples will help you explore the market and gain real insights from the development process.
Operational Command Software Development
This challenging case related to the risk management field was to create a complex SaaS product with a core function to ensure social security during public events. The goal of Ruatti Systems was to provide a unified platform for social services such as firefighters, medical workers, and police via the communication server. This big project included operational command software developed for desktop and mobile platforms.
Except for creating a unified space for information delivery, we also needed to provide constant surveillance of certain places. Our internal solution to reach this goal was building the basement core to make software scalable and reliable. The architectural solution was to use AWS cloud services to store and process the data. We also created a subsystem to get and deliver information from digital communication devices, GPS, and IoT. Finally, we found a way to create a unified information space within a specific framework.
These are the goals we managed to reach building a complex SaaS system:
- Enabled information exchange between social security services in case of any emergency.
- Developed a situational center to register, analyze, process, store, and analyze big amounts of data.
- Created a communication channel for social security services to prevent crimes and coordinate public order.
- Provided constant surveillance of specific places for their protection and controlled access to certain areas.
- Supplied with tools for real-time inspection and collecting evidence.
- Enabled duty units management.
Biotech Enterprise SaaS Development for Remote Device Management and Quality Control System
This case related to the healthcare field was to supply a SaaS product with a solution to control devices remotely and provide a quality control system. The main goal of this project was to create CMMS, reduce the costs spent on the human force, and improve communication between clients and vendors.
To make it all work, our team was looking for both web and mobile solutions. We set up a development system and the company’s SaaS architecture. We launched a flexible platform that was set to solve the issue with asset suitability and maintenance. Also, we improved cloud-based storage and enabled remote control over medical devices. Our team created an SSO and mobile app to help the company observe all these processes.
The positive outcome of this project development was:
- 65% of sales increase.
- A convenient dashboard with wide functional and administrative panels has increased loyalty.
- Heavy load capacity has increased.
🔹 Final Calculations
After learning the factors that change the pricing and opportunities to reduce costs, let’s make some final calculations. Keep in mind that these price ranges are approximate. To get more exact numbers, you should consult with the development team you will work with. They will consider the type of your SaaS product, all features you want to include, stages of design and development, and other specifications.
So how much does it cost to develop a SaaS product?
Let’s say it’s a common SaaS tool with basic features, and you have chosen an outsourcing agency from Eastern Europe for development.
In this case, it will cost from $40,000 to $160,000 with an average price of $80,000.
If you want to take the next step and move from calculations to actions, we at Acropolium are ready to join you. Our dedicated development team has fundamental expertise and successfully delivers various SaaS solutions. Get in touch with us, and let’s discuss your idea!