How Much Does it Cost to Build a SaaS Product in 2023 : Aalpha

How Much Does it Cost to Build a SaaS Product

SaaS stands for Software as a Service. Therefore, SaaS is a software distribution model that provides application hosting services through a third party. The hosted applications are then made accessible to a wide range of customers over the internet. In the field of cloud computing, there are some associate categories, and these involve IaaS (infrastructure as a service), PaaS (Platform as a Service) and SaaS itself. Therefore, SaaS plays a significant role as part of cloud computing.

Software as a service works well basing on the fact that it can relate to the services provided by demanding software delivery models as well as application service providers. The similarity between SaaS and ASP comes in where both models host the customer’s software and present the software to approved end-users over the internet.

Considering the software on-demand SaaS model, customers are provided with network-based applications developed with the aim of SaaS distribution. In this case, the source code used in developing the app is similar all through. Therefore, when the roll-out of new features and functionalities take place, all customers utilizing the same are guaranteed to be updated. The storage of customer data relies on the service level agreement. It entails local storage, cloud storage, or both.

A number of institutions have the capabilities of integrating other software using APIs. Examples of SaaS applications include sales management, customer relationship management, email, human resource management, among others.

Other leading companies are on the verge of providing the best of SaaS. These include Oracle, Microsoft, Intuit, among many more.

Also read: difference between PaaS, IaaS and SaaS

SaaS products are utilized by many people ranging from business users to IT specialists. Just like any other thing, SaaS has the better side and the worse side. Some of the advantages and disadvantages are as highlighted below.

Advantages of SaaS

With SaaS customers, users or organizations face fewer processes of having to install applications on their computers. With this, the extra costs incurred during software licensing, installation and support, hardware acquisition, and maintenance are all eliminated. SaaS model is also advantageous in the case that it allows the following:

There is a lot of flexibility when it comes to payments. What usually happens is that customers have to subscribe to a SaaS offering. After these subscriptions, the pay for this service periodically using the pay-as-you-go model. With SaaS, all users can terminate offering anytime to stop any recurring costs.

There is greater scalability with the use of cloud services like SaaS. Associated customers can choose the number of services they require. They can opt for more or fewer services depending on their own decision.

This is quite advantageous as the cost of purchasing new software is completely cut off. SaaS providers take care of automatic updates as well as software patches that may arise during the period of customer usage. Additionally, in-house IT staff is also reduced by a great deal.

The SaaS products or applications are available anytime and from anywhere over the internet. This makes things easier for customers.

Disadvantages of SaaS

The use of SaaS is also enveloped with some shortcomings. One of the disadvantages of SaaS is the reliance on outside vendors. Many businesses or co-operations will frequently tend to rely on external sources for the provision of the software itself, functionality, maintenance, monitoring, and providing an accurate report of all billings as well as securing business’ data from malicious activities. Consider an instance where a critical issue arises when providers experience service disruptions. This imposes challenges, especially when there are changes in service offerings. These issues can be proactively mitigated through a proper understanding of the SaaS provider’s service level agreement.

Costs to Consider Before Starting Development

Before bringing a software product to the market, there are some considerations you should make. Going straight into software development is likely going to prevent you from exploring the essential aspects of SaaS cost structure. A long time ago, developers would come up with platforms, and after that transpose, codes to suit different environments. The cost of development of a SaaS will often be encountered by a set of factors that are quite key when they are kept in mind.

Before coming up with a SaaS, it is more important to consider that something of a significant impact is being set up. Think from a real-world point of view. In the building industry, there are lots of structures being developed. Comparing to software development, code elements associated with the system can sometimes be wrongly interpreted to building materials. But this is wrong when it comes to software development. All the components used in software development can simply be attributed to the target persons who are the end-users.

Your end-users are the critical factor that determines whether you will come up with a powerful masterpiece of SaaS or not. This can be achieved by involving a high level of expert knowledge from trained and experienced professionals. Additionally, always keep your team in mind when desiring to come up with an everlasting piece of software. The team is of much essence as it incorporates several ideas that cannot be handled on personal grounds.

The scope of a SaaS should be identified before the development of SaaS and the determination of its costs.

SaaS Product Development Costs

We are going to explore a detailed guide to determine the costs of SaaS product development in this section. SaaS development costs require that you have a strong and reliable backup team that can provide you with the best.

The cost of product development doesn’t come with a blind view of the period within which the actual development is to take place.

Let us now get set to estimate the general costs that accompany the development of a SaaS product. The expenses of SaaS product development are not just confined to the actual coding. It is something much more than that. In most cases, costs in the form of money will always be spent on the desired staff. These costs change according to the kind of team conducting the development of the SaaS. Most experienced staff will charge huge costs. The number of staff also plays an essential role. The higher the number, the higher the costs, and vice versa.

Determination of the period for the completion of the SaaS product will guarantee you to start calculating the costs to be issued to employees. You can do this by multiplying the amount of time by the hourly rate of all your employees. It is, therefore, evident that the cost estimates are to be determined relative to the period spent on every procedure or step. These steps include; validation, planning, UX design, and project management.

SaaS Product Development can costs as low as $5000 US to as high as $70,000 US and beyond, it all depends on what you are trying to build at Aalpha information systems.

Did you know? As per the reports by 2028 the global SaaS market size is anticipated to reach USD 344.3 bn.


This step is vital as it acts as the determinant of whether other people will opt to purchase your software or not. It is, therefore, essential to prioritize this stage well to ensure that all is done perfectly well. In the validation process, you will need to do thorough research to determine all the competitors. Also, explore the possible areas you can get complaints as well as visit business owners whom you anticipate to be your customers and determine their preferences. To validate your concept, you will encounter lots of ways. The niche you go for will always impact the course validation you go for. The stage takes at least ten hours, depending on the number of elements to be incorporated in the final product. The customer acquisition process is also featured in this stage.


It is always clear that a project well planned brings out an assurance of an even smoother process. In this step, there should be confirmation of all goals associated with your project. After performing this procedure, establish the most efficient way to meet all these goals using a more experienced architect. The planning process will take you a whole thirty and more hours. The amount of time should not surprise you. Planning isn’t just any simple process you can think of. Projects require that you take a considerable amount of time in the planning stage to incur less costs. The phase is crucial when determining your SaaS product development cost.

UX Design

A precise examination of this stage depicts some form of extension from the planning step. When a considerable SaaS effort is directed towards user comfortability, then everything will seem easier and better. This requires extensive preparations and a high level of innovativeness. As initially covered in the validation step, you are likely to understand the preferences of users. This can be a useful guide in coming up with a wonderful UX design.

Project Management

Project management requires that you seek an experienced project manager. He is the coordinator who is responsible for any issue arising from any area of the project. It takes a considerable amount of time, depending on the sharpness of associated designers and developers. You, therefore, need to have a powerful team that won’t let you down when it comes to project management.

SaaS App Development Cost based on Complexity

One of the SaaS app development costs is the nature of the app. An app with a lot of features and roles will definitely cost more. For instance, if an app requires customization, payment gateway integration, access control, high-end data protection, and scalability can make app development costs escalate because the developers will take more time and face difficulties along the app development journey.

Besides, some extra features such as high-end data protection require experts. As much as you want your app to be free from all forms of threats, you must hire an expert, and this call for more costs. What’s more, a well-secured SaaS app will require continuous monitoring, which means sending more on the same.

As for businesses, many will opt for product customization, making their products and services unique in a special way. This, therefore, means that developers have to build everything from scratch, thus more costs and long working hours for developers.

Note: While the complexity of an app plays a significant role in determining the costs of a SaaS app, some apps differ in varied ways. For instance, one app may require technical functionalities with several integrations while another app may require basic features but complex functionalities.

Therefore, it’s quite hard to define complexity in relation to SaaS app development costs. Nonetheless, it is okay to say that long working hours mean the app is more complex, thus higher development costs.


Cost estimation for SaaS product development is not simple; it might be thought of. Develop a team of experts who are in for the best when it comes to handling the cost estimation for SaaS products. You will then achieve the best out of your SaaS projects.

Also read: mobile app development cost in India | software development costs

Originally published at on May 11, 2023.



Aalpha Information Systems India Pvt. Ltd.

Aalpha is specialist India based Software Solutions company providing solutions for Web and Mobile development,