SaaS Application Architecture Best Practices

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Key Takeaways

• In the SaaS model, applications and data are stored on distant servers, making them accessible to users with internet-connected devices.
• Software as a service architecture emphasizes low costs, scalability, easy deployment and access, robust support, security, and compliance. It often uses microservices, serverless computing, and modern data isolation techniques.
• Best practices in SaaS applications architecture involve prioritizing user requirements and customization, implementing a multi-tenant model, ensuring smooth integration with other software, and upholding strong security and compliance standards.

Anyone who’s ever used Google Docs, Dropbox, or DocuSign, has experienced the power of SaaS (Software-as-a-Service). The approach has been gaining traction due to how easy SaaS products are to deploy while offering plenty of features and great scalability at a fair price. If you’re planning to develop on-demand software of this kind, choosing the right SaaS architecture will be one of the first forks in the road.

Acropolium has empowered businesses with innovative SaaS solutions for 14+ years. We’ve successfully developed more than 137 projects, providing our clients with scalable, multi-tenancy custom systems. And now, we’re excited to share our knowledge with a wider audience.

In this article, we’ll talk about the main concepts of SaaS architecture, delve into its subtypes, and discuss the best practices for creating applications with it.

What Is SaaS Architecture and Why Does It Matter?

SaaS, or Software-as-a-Service, is a cloud-based distribution and licensing model on a pay-as-you-go basis. The apps and data are hosted on remote servers, and users only need a device with internet connectivity and a browser to access them.

The SaaS market was valued at $261.15 billion in 2022, and it’s predicted to keep growing at 13.7% annually from 2023 to 2030. North America led the way with more than 44% of the global revenue. Big companies like Adobe Inc., Microsoft, and Cisco played a big part in growing the market in this region.

Whether you’re making the move to the cloud by updating your legacy software or building brand new apps with an advanced tech stack, going with SaaS is a smart choice. Here are some of the top reasons businesses invest in SaaS-based development:

• Low TCO (total cost of ownership). First, you’re not paying for hardware maintenance. Second, the subscription fees are nothing compared to a full one-time license payment.
• Easy access from any location. Unless specified otherwise for security reasons, all your employees/customers need is a web browser and their login/password.
• Quick deployment and ease of use. Once the application has been built and configured, you don’t need to install it individually on every machine.
• Excellent scalability. Whether you need to scale horizontally or vertically, the SaaS model has you covered. Free from the hassle of setting up new servers.
• Robust support. No need to worry about updating the software locally — your vendor will do it in the cloud.
• High standards of security and compliance. With the SaaS model, you’ll automatically get the safest protocols and storage options.

SaaS System Architecture: What Kind to Go for?

At the most basic level, a SaaS system consists of:

-A database

• Nodes hosting an application with:
• • Backend (functional code with no user access)
• • Frontend (user interface)

The difference between the types of SaaS architectures lies in the way these layers are designed and set up, according to the various use cases. Let’s look at those classifications in more detail.

Monolithic vs. Microservices Architecture

Back in the day, it seemed to make sense to keep every line of code, including the database and the server- and client-side functionality, as one executable process, as monolithic architecture does. However, there was a need for a more dynamic approach, and things quickly changed with the arrival of DevOps and CI/CD (Continuous Integration/Continuous Deployment).

That’s when microservices entered the scene. This architecture is native to cloud environments and relies on APIs. The APIs serve the function of universal liaisons between the various modules of the app. The Lego-like structure of microservice-based apps allows for more flexibility, as many components are reusable once built. It’s also easy to update and scale these blocks individually. Maybe it’s time to migrate from monolith to microservices.

Horizontal vs. Vertical SaaS

Horizontal architecture has been the default type until recently, meeting the demands of a wide variety of users in most industries.

The purpose of vertical SaaS is to dive deep into the specific requirements of a particular domain. Healthcare, finance, and real estate eagerly adopt vertical SaaS application architecture because it offers the niche functionality and security they need.

Isolation of Data/Runtime Components

Depending on the security requirements, the speed of deployment, and other parameters, we can divide SaaS applications into four categories:

Type 1. A “cloudless” solution, where both databases and applications are isolated. For security reasons, those businesses need their own storage and differentiated access to data and apps.

Type 2. The security standards of these clients allow cloud storage, but separate access to data and runtime modules is still necessary.

Type 3. Data must be isolated while sharing the same application components/hardware.

Type 4. The most standard of the four SaaS architecture patterns, the use cases for this type don’t require separate access to data or runtime.

Single- and Multi-Tenant Solutions

There are two SaaS architecture patterns to choose from:

• A single database for all users to access
• Different databases assigned to individual users or selected groups

When you build a product with single-tenant SaaS architecture, this means running a single instance of the software per user, as well as a dedicated database. This can deliver better security and flexibility. However, it’s also more taxing on resources and comes with high maintenance and configuration costs.

Many startups and enterprise businesses that are getting into cloud solutions opt for multi-tenant SaaS architecture as it covers most typical scenarios. Such systems are usually less resource-hungry and deliver superior performance when compared to single-tenant products. They are also easier to scale, maintain, and back up.

Check out our in-depth comparison of single-tenant vs. multi-tenant SaaS architecture patterns to gain a better understanding of the two.

Serverless SaaS Architecture

The idea behind serverless SaaS is putting third-party services right where you need them, without the need for always-on servers. Here, you’ll be dealing with one of the two possible options:

BaaS

Backend, as we briefly mentioned earlier, is the code that end users never interact with — the app’s backbone services, including the data layer.

When developers choose BaaS, they want a ready hassle-free solution to build the frontend functionality upon. It’s a huge marketplace: different BaaS products offer complete packages of backend features to run any service imaginable.

FaaS

The simplest example of Function-as-a-Service is a trivial contact form on a website. A user event triggers an action with a single click of a button, and — voila — the message is sent!

When you don’t need complex functionality, why make a full-blown app if you can pull one function from a microservice? Call it, execute, and then kill it off when the required action is completed.

Just in case you want to go a level deeper, we have an excellent article on our blog describing the difference between BaaS and FaaS.

Making It Work: SaaS Architecture Best Practices

The guidelines listed below will help you get a clearer picture of how to achieve your goals.

Focus on the User’s Needs

That’s always a great place to start. Knowledge about your potential user is immensely helpful and will govern many of your decisions. Like creating a user-friendly interface with the essential features easily available.

Netflix is a prime example of a company that tailors its UI based on user preferences. The platform employs sophisticated recommendation algorithms to display content based on a client’s viewing history, ratings, and other factors. This approach helps users discover content they will likely enjoy, enhancing their overall experience.

Strive for Self-Service & Personalization

Your app should be robust and not require admin privileges for the basic functions to work. Operations like creating a login and password, setting up the workspace, or accessing data must work flawlessly. It’s best to minimize onboarding efforts and avoid service calls.

MailChimp, an email marketing platform, is designed for self-service. Users can sign up, create and send email campaigns, manage their subscriber lists, and track results without extensive onboarding or customer support. The app’s intuitive interface and personalization options allow companies to tailor their email marketing campaigns to their specific needs.

Go for the Multi-Tenant SaaS Model

Unless your project has very specific restrictions, the multi-tenant approach should cover the majority of use cases. When implementing the model, remember to be very consistent with identification, so users only have access to their data.

Stripe is a multi-tenant SaaS platform that handles payment processing for various businesses. It securely manages sensitive financial data for multiple customers while ensuring data isolation and compliance with industry standards like PCI DSS.

Ensure Easy Integration

The SaaS architecture is built around the idea of integration. Using SaaS cloud-native architecture, you’ll have access to standard APIs when developing your app. This way, your customers will be able to connect other SaaS-based software when needed.

Slack, a team collaboration platform, maintains an App Directory with many integrations. Developers can easily create and share apps that connect with Slack, allowing teams to add functionalities like project management, file sharing, and more directly within the Slack environment.

Get the Best Cloud Provider

If you don’t need on-premise servers, it’s best to consider going with a known cloud provider. Start with the holy trinity of Amazon Web Services, Microsoft Azure, and Google Cloud, and dig deeper into smaller brands if you need to. With the multitude of options currently on the market, you’ll be able to find a subscription plan that fits your needs.

Dropbox, a cloud-based file storage and sharing service, has a long-standing partnership with AWS. Dropbox relies on AWS to store and sync user files securely across various devices, taking advantage of the provider’s data storage and distribution capabilities.

Don’t Forget about Security and Compliance

To avoid reputation losses and legal battles, make sure your SaaS-based solution has industry-standard security standards in place. For instance, an integrated firewall that is also properly set up is a must.

There may be additional requirements for projects that operate with very sensitive data, such as financial institutions or medical facilities. The servers must be kept at a secure location, and the software needs to be compliant with data privacy standards like HIPAA or GDPR.

In 2020, Zoom lost over 500 million usernames and passwords. After facing these security and privacy challenges, the company took significant steps to enhance its security. Zoom introduced measures like advanced chat encryption, waiting rooms, the ability to kick out Zoom bombers from meetings, etc.

Monitor Performance and Be Ready to Fix Issues

When your new SaaS solution is up and running, it’s easy to rest on the laurels and forget about maintenance. Yes, we said you’d be able to cut back on maintenance but not eliminate the need for it altogether. Your IT department (or your software partner) will have to monitor the app’s performance and interfere when necessary.

AWS, one of the leading cloud service providers, maintains a robust monitoring system to ensure the performance and availability of its services. AWS CloudWatch allows users to monitor their resources and applications, set alarms, and react promptly to performance issues or anomalies.

Master Data Management

SaaS apps generate a lot of data. You can use a data warehouse or lake to store and organize all the information to handle it well. Create a data pipeline to move and change data between different systems. You can also use real-time data processing tech to analyze information as it comes in. This helps SaaS apps provide insights and stay competitive.

Microsoft Power BI is a powerful business intelligence and analytics tool used by SaaS providers to turn data into insightful reports and visualizations. It helps companies make data-driven decisions and maintain competitiveness in their respective domains.

Benefit with Microservices

With microservice architecture, each service can be developed, tested, and deployed independently, enhancing agility and reducing the risk of system-wide failures. This modular structure simplifies development and maintenance and enables SaaS providers to respond rapidly to customer needs and industry challenges.

Uber leverages microservices for real-time data processing, location-based services, and dynamic pricing. Such architecture allows Uber to scale its services based on ride demand, ensuring a seamless user experience and a quick response to market changes.

Company Experience

We have been delivering SaaS development solutions since the beginning of our existence and were fortunate to work for a wide range of markets. They include healthcare, fintech, supply chain and logistics, retail, risk management, business automation, etc.

Whatever your business needs, Acropolium will provide the solution. SaaS web or app development, API, integration with third parties, or system modernization — we will do everything within the planned time and budget. Our specialists work according to ISO 9001:2005 and GDPR standards, guaranteeing the security of your data and the quality of the finished product.

Let’s take a look at some of our latest SaaS solutions:

Biotech Enterprise SaaS Development

The client, a corporate medical equipment supplier, suffered from high human and administrative costs for auditing and quality control of all assets. In addition, it was important to establish a connection between the client and the supplier.

We developed an effective CMMS (Computerized Maintenance Management System) that connected suppliers and technicians and accelerated quality control. As a result, the solution created helped the company increase sales by 65%, loyalty by 75%, and attract 30% of new customers.

Accounting SaaS Platform

The goal of this project was to create accounting software for multiple small businesses, accountants, and bookkeepers. We have developed a wide functionality that allows end users to conduct transactions, track them, pay by various methods, and generate reports. In addition, the solution enables customers to quickly generate invoices and reports using templates.

In five months, the SaaS solution was ready. Good functionality and a quick 5-click setup made it possible to achieve a 30% conversion from the free demo version to the paid one.

Bottom Line

Software-as-a-service has become a perfect solution for many industries, particularly finance, retail, healthcare, and IT. This market is improving because of a growing adoption of cloud-based solutions, integration with other tools, and centralized data-driven analytics. Moreover, key players focus their business initiatives on partnership and collaboration.

Adopting SaaS is a great opportunity to cut down on infrastructure costs while getting access to an unlimited variety of software. SaaS applications are reliable, scalable, and adhere to the highest security standards.

Finding the right SaaS outsourcing partner to handle the development of your custom software is one of the choices you will never regret. Acropolium is ready to support your project on any level. We can start with consulting and continue by offering you a dedicated team of highly trained professionals to get the job done.

Get in touch today, and we’ll talk you through the options.

Sources of Information

• Grand View Research’s SaaS market report
• Fortune Business Insights’s SaaS market overview