How to Calculate the Cost to Build a SaaS App in 2022

Building a software-as-a-service app is an excellent choice for your company. Because of the significant increase in demand for remote collaboration, services that provide the best software are becoming increasingly popular. As a result, creating a SaaS app is likely to be an excellent solution. So, how do you calculate the cost of developing a SaaS platform? We used our company's experience creating SaaS products to assist you in finding the answer. In this post, we provide an estimate and a list of the key factors that may influence the price.  

What Factors Influence the Saas Cost Structure?

You must have weighed all of the benefits and drawbacks before deciding to develop a Software-as-a-Service application. And now you want to know how much it will cost to develop a SaaS application and how long it will take. Of course, there is no simple solution. The saas service cost could range between $20,000 and $700,000 or more. It doesn't sound like a set price, does it? Well, the cost of developing a SaaS product is always determined by a plethora of factors that have a greater or lesser impact. The essential functions are those that aid in the achievement of your product's goal.  Every new feature you want to include raises the cost of SaaS app development. As a result, start with the fundamentals. To get a better understanding of the subject, let's look at which aspects are the most influential.

• Scope of your SaaS product
• The Implemented Features
• API Integration
• Platforms
• Making Tech Decisions
• Establishing Deadlines
• Additional Expenses

1. Scope of your SaaS product

The first thing to decide is this. Is your SaaS app going to be a platform or a tool? Not only do these two types of Software-as-a-Service differ in their essence, functions, and target audience. It influences the cost of developing a SaaS application as well as the time required for the development. To make an informed decision, understand the distinction between a tool and a platform. The SaaS tool has a narrower scope and is designed to manage a few key functions. In other words, the tool is designed to provide everything needed in a specific area but cannot be used for multiple purposes. Buffer, which was created to manage social networking accounts, is the most well-known example of a SaaS tool. The SaaS platform has a broader scope, employing multiple tools and providing more functions. As a result, they have more objectives and reach a larger user base. For example, large services such as Facebook provide users with a variety of tools that serve a variety of purposes. If you haven't yet developed a clear vision for how to launch your app, start with the SaaS tool. In this case, SaaS development pricing is less expensive and takes less time to produce. Furthermore, you will have the option to consider expanding the features in the future.

2. The Implemented Features

The features your SaaS app requires will be determined by the purpose of your service. If it's a simple tool that focuses on a single area, including only the essentials at the start of the project will suffice. However, more complex platforms with a broader scope may necessitate the implementation of some additional functions. Here is a list of a few key features that almost every SaaS app must-have.

• User Management and Permission

Many SaaS apps rely on custom management features. These are registration signup, login, logout, and editable user profiles. It's also worth considering a single sign-on option so that customers don't have to enter passwords for each application individually. Furthermore, users must be able to reset and change their forgotten passwords. Option to add and remove users can be included for permission control. Controlling the abilities of multiple users requires role-based access.

• Analytical Tools

Most users will require access to data analytics, as well as the ability to view metrics, charts, and graphs. A dashboard is a must-have feature for your app if your target audience is in the business intelligence field. For example, your app should provide users with reports, track real-time changes, and send notifications. Dashboards are used in the field of business intelligence. Furthermore, they can provide users with information such as the weather, the time of day, or changes in the stock market. Creating an analytical dashboard is also beneficial to your team. With this tool, the analytics will track the number of users, payments, and other important information for the growth of your business.

• Security

To prevent unwanted activity and control the environment in your app, audit trail and security functions may be required. Because SaaS applications typically provide data, services, and cloud storage to a large number of users, security is an essential component. Your app should be reliable.

• Communication

The use of communication tools is determined by the purpose of your app. In many cases, users require the ability to chat, receive notifications, and even make voice or video calls. A SaaS app may also include document storage and sharing capabilities. You can also include messages or emails sent within the system. Using integrations with some email service providers would be a good option in this regard.

• Account Management and Billing

This feature is required to display payment history and collect data on successful and unsuccessful charges. You can use an external hosting service to avoid dealing with this data on your own. Account management is another tool that allows you to keep track of the number of upgraded and downgraded subscriptions, deleted accounts, billing failures, and other important details.

3. API Integration 

API (Application Programming Interface) is software that allows apps to interact with one another. The data is sent to an Internet server and then returned to you with the necessary information. Your back-end system, on the other hand, allows the app to process data on its own. So the option is to use API integration or to build back-end functionality from scratch. To work with data, any Software-as-a-Service requires certain back-end functions. For example, most SaaS companies use APIs to integrate their payment system with large services like PayPal or Braintree. Using APIs will help you save money, but you will have to pay some maintenance fees. It also allows for the omission of some stages of app development. Furthermore, by integrating APIs, you are much more likely to scale your business.

4. Platforms

SaaS, like any other app, can be developed for a variety of platforms. When deciding between web and mobile, consider your app's goal and target audience. For example, B2B companies prefer to use a PC platform because their employees are more likely to work on a large screen. Although the content of the mobile and web apps is the same, the user experience (UX) differs significantly. Making your application available on two platforms at the same time may sound appealing. Nonetheless, it will raise the saas software cost. Begin with a project for a single platform and then consider expanding after a while.

5. Establishing Deadlines

The development of a SaaS app can take anywhere from 3 to 9 months, or even longer. The timeline, like the price, is determined by complexity, features to be included, and the stages you should go through before launching your app. Building an MVP or a proof of concept (POC) to determine the viability of the project should also be considered. Creating a demo version of your app usually takes less time and does not necessitate a large investment. Setting time constraints is critical in any business. However, you must evaluate your project objectively. Discuss potential time frames with your development agency.  

Creating a Cost Estimate for a SaaS Product

There are a few key stages that take time and money to complete. To estimate SaaS development costs, examine each level of development and assign rough price tags. Prices will also vary depending on the complexity of your project and the location of the development team you choose to work with. To create a SaaS product, you must go through the following stages:

• Validation and planning (40 - 250 hours)
• Creating an MVP or a Proof-of-Concept (300 hours or more)
• Design of UI/UX (120 - 250 hours)
• Front-end programming (400 - 600 hours)
• BaaS has the potential to reduce back-end development time (up to 800 hours).
• Project management and post-release support

1. Validation and planning

If you already have a good idea for your product, the next steps are to solicit feedback from potential customers, define product goals, and create a solid plan. Developing a budget for SaaS app development is difficult. So, if you're looking for investment for your startup, you might want to start by developing an MVP (Minimum Viable Product). This type of app has only the most basic features. At this point, you'll know if it has a future. It's critical to determine whether you're heading in the right direction. A non-complex project will cost between $25,000 and $80,000 to build an MVP for your SaaS app.

2. Costs of Creating a User Interface for a SaaS Product

UI/UX design is an important stage in the development of your SaaS product because it defines how the interface will look and what user experience it will suggest to customers. UX is one of the most important aspects of development because it is responsible for creating all conditions for users and meeting all of their needs. Testing is also an important stage because it informs you whether your product's User Experience is appropriate for the target audience.  Test your app at each stage of development and use the feedback you receive after launching your MVP to improve the UX even more. UX design typically costs between $30 and $50 per hour. A non-complex SaaS app takes about 3 weeks to design on average. The average cost of UX design is $3,500 over three weeks.

Stage of development	Approximate timeline	Hourly rate range	Average cost
UX design	3 weeks	$30 - $50	$3600 - $6000

Sources: Glassdoor

3. Costs of Creating a Front-End for a SaaS Product

To begin, select the best technology stack for your SaaS app. These are front-end, back-end, and mobile development technologies. To make an informed decision, consider all of your app's core features. Some frameworks are better suited to the needs of your app. The cost of front-end development is also difficult to estimate due to the numerous factors that must be considered. Working with an in-house team will be more expensive than working with one that is outsourced. Hiring a freelancer will be the most cost-effective option.  But first and foremost, consider the quality of your work and the ease with which you can communicate. The front-end developer's work will typically cost between $20 and $80 per hour. The entire front-end development process takes about 10-12 weeks.

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

Sources: Glassdoor

4. Costs of Developing a SaaS Product's Backend

As previously stated, the complex back-end of a SaaS app necessitates starting from scratch. This method is much more expensive, but it should only be used in exceptional circumstances. A much more common and less expensive method is to provide a back-end via APIs. The backend cannot be skipped because it creates the necessary data structure and security. Depending on the complexity of the functions, the average back-end development cost ranges between $20 and $100 per hour or more.  It is possible that dealing with all stages will take more than 20 weeks. By using the backend as a service and selecting one of the best BaaS providers, you can drastically reduce your bill.

Implemented feature	Approximate time	Hourly rate range	Average cost
File management	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	$20 - $80 per hour	$13,600 - $69,800

Sources: Glassdoor

5. Expenses incurred after SaaS release

Even if you've successfully developed and launched your SaaS app, your work isn't done. To calculate the cost of developing a SaaS app, you must go a step further. Any SaaS product is designed to serve a large number of people. As a result, it requires constant updates, bug fixes, improvements, and the addition of new features to remain relevant and meet the needs of users. Continue to collaborate with your development team to obtain professional support and upkeep for your SaaS app.  It is critical to hire a professional project manager and a good team for the further development of your project. Your product does not exist solely to ensure its survival. It must evolve to assist people and remain competitive in the market. This implies that promotional campaigns and marketing will also necessitate investments. Depending on the nature of your product, some of the additional SaaS app development costs will be related to legal licensing, subscription, and more.  

Regions of the SaaS App Development Team

The size and location of your development team have a significant impact on the cost of developing a SaaS product. First, decide on the type of specialists with whom you will collaborate. You can delegate your project to a freelancer or a development firm. Hourly rates for independent contractors are typically lower. Working with a development team, on the other hand, has several significant advantages:  

• You will delegate your project to a group of highly skilled professionals with relevant experience. You will not have to look for each specialist individually.
• Development firms maintain constant contact with their clients and report on all stages of production.
• You will have more specific agreements and timelines to ensure that your project does not become stalled.

If you want to hire developers, you'll have to make another decision. Will it be an in-house or an outsourced agency? Prices vary significantly. The cost of developing a SaaS application is highest in the United States or Canada. Western and Eastern European shops have prices in the middle. Choosing an outsourced agency based in Southeast Asia or South America is the most cost-effective option. The main advantage of in-house app development is that American and Canadian companies provide constant communication and the ability to visit the office to check on the progress of development. However, even in-house companies now frequently work remotely. Given that the cost of developing a SaaS system in North America is twice or three times that of Europe, it is worthwhile to consider outsourcing. Keep in mind that higher prices do not always imply higher quality. Pricing flexibility is caused by differences in economic conditions, market characteristics, and general cost of living. Communication issues and time zone differences are two potential issues with using an outsourced agency. However, if you are willing to work with off-shore companies, they can provide good quality at a reasonable price. The average price ranges for SaaS software development in five major regions are shown below:

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

Sources: Statista & Glassdoor

The Company Experience

For the past 17 years, the Mobirevo team has provided solutions for various types of complex software. Throughout this time, we've encountered a plethora of different cases and challenges relating to various SaaS products. Here are some of the key areas where our team has provided SaaS solutions:

• Healthcare
• Fintech
• Supply Chain and Logistics
• Retail
• Risk Management
• Business Automation

These two examples will help you explore the market and gain real insights from the development process if you want to launch a successful app:

1. Operational Command Software Development

This difficult case in the risk management field required the development of a complex SaaS product with a core function to ensure social security during public events. The communication server was designed by Ruatti Systems to provide a unified platform for social services such as firefighters, police officers and medical workers. This large project included the development of operational command software for desktop and mobile platforms. We needed to provide constant surveillance of certain locations in addition to creating a unified space for information delivery.  Building the basement core to make software scalable and reliable was our internal solution to achieve this goal. The architectural solution was to store and process the data using AWS cloud services. We also built a subsystem to receive and transmit data from digital communication devices, GPS, and IoT. Finally, within a specific framework, we discovered a way to create a unified information space. These are the objectives we were able to achieve while developing a complex SaaS system:

• In the event of an emergency, information can be exchanged between social security services.
• Created a situational centre for registering, analyzing, processing, storing, and analyzing large amounts of data.
• To prevent crime and maintain public order, a communication channel for social security services was established.
• Constant surveillance of specific locations was provided for their protection, as was controlled access to specific areas.
• Tools for real-time inspection and evidence collection are included.
• Management of duty units was enabled.

2. Biotech Enterprise SaaS Development for Remote Device Management and Quality Control System

This healthcare-related case involved providing a SaaS product with a solution for remotely controlling devices and providing a quality control system. The primary goal of this project was to develop a CMMS, reduce labour costs, and improve communication between clients and vendors. Our team was looking for both web and mobile solutions to make it all work. We established a development system as well as the company's SaaS architecture. We launched a versatile platform designed to address the issue of asset suitability and maintenance.  In addition, we improved cloud storage and enabled remote control of medical devices. To assist the company in monitoring all of these processes, our team developed an SSO and a mobile app. The following were the positive outcomes of this project's development:

• 65% increase in sales.
• A user-friendly dashboard with a variety of functional and administrative panels has increased loyalty.
• The capacity for heavy loads has increased.

 

Final Calculations

Let's do some final calculations after we've learned about the factors that influence pricing and cost-cutting opportunities. Please keep in mind that these are only estimates. You should consult with the development team you will be working with to get more precise numbers. They will take into account the type of SaaS product, all features you want to include, design and development stages, and other specifications. So, how much does it cost to create a SaaS application? Assume it's a standard SaaS tool with basic features, and you've hired an Eastern European outsourcing firm to develop it. In this case, the price will range from $40,000 to $160,000, with an average of $80,000. If you want to take the next step and go from calculations to actions, the Mobirevo team is here to help. Get in touch with us, let's talk about making your SaaS ideas a reality! Our dedicated development team has extensive experience. You can contact us today to get a free quote. Our team at Mobirevo strives to provide unrivalled services to all of our valued clients. You can also check out our case study page to see our client's portfolio and get a better understanding of the quality of products we deliver. Also, contact us if you have any questions about our services, and we will get back to you as soon as possible. Want to receive more content like this? You can signup for our newsletter, which features curated opinions, and product discovery tools for building remarkable digital assets. If you sign up for our weekly newsletter, you will be the first to know when we publish awesome content like this. You can also visit our blog to see other content created with love by our amazing team.