How to Build Your First Software-as-a-Service Product Step-By-Step

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How to Build Your First Software-as-a-Service Product Step-By-Step

Arul Raju

Published January 12, 2022

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Software-as-a-Service, or SaaS services, has managed to become a household name in the digital space. The pandemic changed the business models to move from on-premises solutions to SaaS. 

This technology disruption has enabled companies to build products that offer on-premise solutions, making SaaS one of the most cost-effective approaches compared to traditional IT infrastructures. Many organizations now rely on SaaS products to implement various business intelligence strategies.

SaaS has gained high value in a competitive business environment by providing cloud-based applications that are fast, accessible, functional, and efficient across all potential variables. It is now possible to run solutions in the cloud without remotely installing and running applications on each device and data center. 

Storming the cloud computing market, Gartner predicts that cloud application services will reach $122.6 billion in early 2022. Therefore, it is crucial to include SaaS in your business strategy. 

But before we explore building your first SaaS product, it is essential to understand what SaaS is and how it operates.

What is Software as a Service (SaaS)?

SaaS implies that you can avail software services with regular fee payment methods instead of purchasing a license. It enables remote access through any web browser as well as any laptop or mobile device. 

SaaS services are a business model, delivering software on-demand over the internet as a service. It allows you to detach from complex hardware and software management and directly access the application via the internet. SaaS applications are also known as web-based/on-demand software.

Cloud infrastructure is how SaaS applications are easily accessible; you can host them on private and public cloud servers from where they are built and deployed. SaaS applications are run exclusively on the provider’s cloud servers; they validate and provide access to the users to handle the application, including availability, security, and performance. 

How to Build Software as a Service Product?

By following this guide to building a SaaS product, you will be confident that you have taken all the necessary steps and precautions to develop it successfully. To get the most out of this, follow our step-by-step guides on creating a SaaS product. 

Let us closely look at how to build a SaaS platform and turn your ideas into software products.

Market Research: The What, Why, and How

Before getting into the SaaS services or product space, find out whether this is the right market segment for your product. Before building the product, analyze the market and align it with your product requirements.

The most crucial step is identifying the product idea and its target market. You must conduct thorough market research to find a product that resonates with your vision.

If there is a product already in the market, competitor analysis will help locate the missing factors with the current product offering. Identify the parameters where your product can be different and has a USP. 

Ask these questions with perspective to the product placement:

  • Where does the product fit in the market ecosystem?
  • Who are your target customers?
  • What can you do for them? How can your product be a savior for their needs?
  • What is the current business model?

These questions will help you ideate your product placement and find its true purpose. 

Then, create a detailed report on how the current market operates and how you should introduce the product to portray its benefits best. It should be clear, precise, and appealing to the viewers, tempting them to choose your product over others (if there are any).

Market research is the soul of any business project. Consider your competitors or others on how they operate, what is working for them, how they are doing it, and look into the ways they are lacking. Look for the obvious loopholes in their system; your product should fill the market gap with added value. Only then can you gain more credibility among potential customers.

Also check out: Cost of Building a SaaS Product

Create a Business Plan

The user community determines the roadmap for Open SaaS applications, while a central provider handles product updates and enhancements. 

One can define a business plan as a flexible or static document that provides developers, product managers, designers, team leaders, business analysts, and marketers with information on possible strategies and how to implement them. 

A product roadmap visually tracks product vision and strategic goals, making it easier for development teams to share and collaborate. The most important aspect of the strategy is the definition of business objectives. Until you determine the indicators of success, it will be difficult to chart a path towards achieving those goals. 

Instead, your roadmap should describe the difference your products will make in the lives of your customers. Therefore, it is a comprehensive document with various sections describing the goals of the service, the desired/planned features in the future, the timeline, and more. 

Here are some questions you need to answer in your business plan:

  • What is the USP of the product?

The answer to this inquiry should be precise and straightforward. It should counter the market’s current pain points and the SaaS services’ what, why, and how.

  • How do you plan to monetize it?

Each business proposition must have a revenue model to put your finances in place. Create an affordable and lucrative business model, subscription plans, product updates, etc. 

You can implement free, flat-rate, tiered, usage-based, or feature-based pricing that best suits your product.

  • How do you plan to invest in this project, and what are the expenses?

Create an estimate of the resources and workforce required to put the product on the floor. You may have an allocated amount from your budget, or else you may prefer investments in exchange for equity, crowdfunding, or bootstrap. 

You should also consider a scope you might be inclined to go for a Series A and Series B funding rounds.

Assembling the SaaS Service or Product 

The team that heavily works on the SaaS product can best define it. That is why you must learn to trust people and build a healthy community. 

Pick the people that would be an excellent fit for the product and have expertise or exposure in a similar space. It is not necessary to pick the best in the market, but choose the best combination of players that makes it a team.

Here are some key positions that need to be filled at the start to have a collective vision built for your product:

  • Business analyst
  • Software developers
  • Quality assurance engineers
  • UI and UX designers

These people would be the pillars that will lay the foundation and be responsible for the product’s success. 

If you can follow this pattern and find a talented developer and designer, you can start your SaaS business from scratch. But make sure you have a plan before moving on to a SaaS founder. 

Technical Stack

The technical or tech stack will include the decisions you need to make in deciding programming languages, tools, and frameworks that will ensure the smooth integration of your application. 

Picking a technology stack for your SaaS application is similar to selecting building materials for a home. To create a SaaS solution, you need to determine the best technologies for the front-end and back-end of the application, the back-end storage database, and the application server.

SaaS software designed for use in a business environment must integrate seamlessly with other business tools and applications. At the very least, it should include an open application programming interface (API) so that third-party developers can easily access the code and program it to integrate with other applications.

  • Front-end

As the name suggests, it would be responsible for each detail you see on the screen. It functions on a modern JavaScript framework with React, Vue.js, Angular, etc.

  • Back-end

The back-end is the actual engineering process that helps the front-end function, ensuring the smooth handling of server requests. It is responsible for building the product’s core functionality and works on its responsiveness. 

The framework used here is Ruby, Node.js, or Django as its fast, scalable, and completely secure.

  • Database

It is where you will store all your consumer data. Choose wisely, as this is a matter of privacy. You can use services such as PostgreSQL, NoSQL, or MySQL.

  • Hosting provider

The hosting provider is the cloud provider used as a base to access the application. You can decide freely based on your budget and traffic needs from AWS, Google, Microsoft, or Heroku.

Build Your Product the Real MVP

Minimum Viable Product (MVP) is a preliminary product offering that has the features to attract new users and acts as an anchor to validate the idea. It helps to get the real-world response of the product on how well the audiences receive it. 

MVP acts as a validating factor to check how you can moderate the product to make it better fit the SaaS market; it allows testing the product’s effectiveness. 

Building an MVP rather than a finished product allows you to test different concepts and get feedback from users. Whether using an experienced prototyping team or building and managing your team yourself (not recommended unless you have experience), it will be more convenient to provide feedback on the prototype rather than the actual build.

Product release

In the final stage of building a SaaS product, you now have a clear idea of developing the right product with a strategy. 

By performing the above steps with extreme care and prudence, you will ensure that you are building your SaaS services or products in a way that suits the market and is beneficial to you. In this way, you will determine the appropriate strategy for SaaS development and understand how to create SaaS products in high demand. 

You need to balance your product strategy, customer demand, internal team demand, and stakeholder demand and somehow translate it into a SaaS product that makes sense. From a strategic point of view, you need to understand that your product needs to fit into a broader and efficient workflow. And if so, you can build a part of your roadmap on partnerships and technical integration. 

Once released, you must invest in providing the best tech support to improve your clients’ businesses. Further down the line, you should enhance the product with more updates to suit the market and customer requirements. 

You must implement a clear development strategy to build a better product. Only an alert team can create a phased and agile roadmap to adapt to changing customer and market needs.

Advantages of Using a SaaS Service or Product

Let us look at some advantages of SaaS services.


SaaS can provide significant benefits to most businesses, primarily cost. SaaS is the best business model for customers and software vendors when implemented correctly. It offers your customers an easy-to-use system, and at the same time, gives your business an easy way to update the product and easily communicate those changes to customers.

The traditional payment model included buying an enterprise software license, resulting in huge payment debts. Since SaaS is generally subscription-based, i.e., no license fees, up-front costs are lower. And the subscription-based payment depends on the use of the infrastructure.

SaaS exists in the cloud, which means no hardware installation costs. If you lease the software from a third-party service provider, you can reduce the internal costs of purchasing and installing all software and IT infrastructure to zero. 

On-demand Scaling and Accessibility

With the SaaS approach, companies can benefit by getting customized solutions that offer extra features to help them scale their services. SaaS is a software implementation model in which you build the applications in the cloud infrastructure; customers can use these SaaS services over the Internet. 

Other software distribution methods require the client to download and install the application on their computer or an organization’s server. Unlike these software products that need storage space, clients can access SaaS, stored on a server in a different location, over the Internet.

The SaaS Service model thus enables users to access the database from anywhere on any device. Therefore, the customers can now easily focus on their business and avoid constantly spending time and money upgrading hardware to support the application.


The SaaS services offer a seamless onboarding process and usage. Simply delivered online, customers can use it without IT support to manage the application, keeping the organization’s work systematic.

It has also created the opportunity for flexible working, providing more convenience for employees. SaaS flexibility further benefits to avoid overhead costs (workstations and servers) in many forms, helping evolve the whole business environment.


While the SaaS products are quite accessible, the internal infrastructure has high-grade security encryption. You can host the applications on different data centers that replicate data and provide complete functionality in case of downtime. Cloud solutions offer excellent data safety with security protocols and service-level agreements for undisputed uptime. 

For any application, data security is a growing area of concern. Major applications now support strict regulations for data privacy. SaaS is rapidly becoming the preferred programming model as more and more companies trust cloud services to gain a competitive edge.

AI-driven Analytics

Machine learning algorithms have become an integral part of AI-driven SaaS service models, helping businesses gain more visibility over their operations. SaaS applications can now benefit from automation and dig deeper into data and insights to gain a competitive edge.


The SaaS model has become the best product alternative by creating various business opportunities for customers and application developers. SaaS services have a higher hand over traditional applications, with features like easy upgrades, lower cost, and better scalability being the main reasons most companies believe SaaS is the future of computing.

Regardless of the size of your business, ATC will help build the right SaaS product for software companies for virtually every business technology in the world. So, if you are looking to level up and are ready to harness the potential of SaaS, get in touch with us and make innovation, growth, and intelligence your allies to expand your business.

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