SaaS (software as a service) is the latest trend and every business owner has invested in this model. Companies using a SaaS business model received 47% of venture capital funding in 2023, according to Dealroom. SaaS solutions exist in nearly every industry. Many businesses, in the fintech, healthcare, and tech sectors, are switching to a SaaS-based business model. However, there is a question in every business owner’s mind “How much does it cost to build a SaaS platform?”
SaaS attracts more companies’ attention and due to an increased demand, its market is rapidly growing. About 45% of small and medium-sized businesses use various SaaS solutions.
It will rise from over $130 billion in 2021 to an incredible $717 billion in 2028, according to Fortune Business Insights.
However, like other businesses, setting up the SaaS platform will require money. It is tricky to determine the actual software as a service pricing.
To help you identify SaaS development costs, we gathered information that will provide a complete price for building the SaaS platform.
What Factors Influence the Cost of SaaS Development?
Are you planning to build a SaaS product? Or, are you already in the process of developing one? Knowing its cost is an important factor in developing the SaaS platform. However, several factors impact the cost of SaaS development.
Let’s discuss the factors that influence the cost of SaaS development.
1. Features and Complexity
The features of a SaaS product play a crucial role in determining its pricing. The SaaS app requires various features that depend on the goal of your business. Start the project with basic features if the product is simple will suffice. However, if your business scope is expanded, you will add some extra features.
Here is a list of a few key features that affect the cost of a SaaS product.
Core Functionality: Basic features like user authentication, data storage, and simple dashboards are less expensive to develop.
Advanced Features: Complex features like integrations with third-party tools, AI/ML capabilities, real-time data analysis, and custom workflows significantly increase development costs.
Customization: Highly customized solutions tailored to specific client needs require more time and expertise, driving up costs.
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2. Type of SaaS Product
It is another factor that determines the cost of building the SaaS solution. Building the SaaS product may be challenging when adding new features and the sensitive data needs to be managed.
Below is a list of SaaS costs based on the solution you have to offer.
| Type of SaaS | Cost |
| ERP | $110,000 – $120,000 |
| CRM | $50,000 – $60,000 |
| Project Management | $60,000 – $70,000 |
| Martech | $90,000 – $100,000 |
| Visual Website Builder | $140,000 – $150,000 |
| Email Marketing | $60,000 – $70,000 |
3. Platform and Technology
Choosing the right tech stack is crucial for both front-end and back-end development. The platform and technology stack you want to use also impact the cost of the SaaS application. The latest technologies provide better performance and faster development but require more expensive talent and resources.
Cloud Platform: The choice of cloud provider (AWS, Azure, Google Cloud) can impact costs, with different pricing models and features.
Programming Languages: Some languages are more expensive to develop SaaS due to their complexity or specialized skill sets (e.g., Python, Java).
Database Technology: The type of database (relational, NoSQL) and its scalability requirements influence costs.
4. Team Size and Expertise
The size of the development team and the expertise you opt for may affect the SaaS app development cost. The most commonly used models for software development are insourcing and outsourcing, both offer different advantages and each has its own cost.
Insourcing: Hiring a dedicated team of SaaS developers can be expensive, but provides more control and flexibility.
Outsourcing: Engaging external development agencies or freelancers can be more cost-effective but requires careful vetting and communication.
The below table shows the popular outsourcing regions and their hourly wages.
| Outsourcing Region | Hourly Price |
| Asia | $20-$40 |
| Africa | $20-$45 |
| North America | $100-$200 |
| Western Europe | $75-$150 |
| North Europe | $50-$70 |
5. UI/UX Development
UI/UX costs can be significant, but investing in a well-designed SaaS based platform can pay off in the long run. It helps to increase customer engagement, reducing churn, and driving revenue growth.
Moreover, tools like Figma, Adobe XD, Sketch, and InVision are essential for creating prototypes and wireframes. These tools often come with subscription fees. Therefore, keep the SaaS cost management in mind and use the tools that are necessary for building the SaaS platform.
6. Front-end Development
SaaS companies select the tech stack before beginning the front-end development. Users can quickly create an app by selecting the good stack. The front-end tech stack determines how the user interface (UI) of the SaaS application is built. It includes languages like HTML, CSS, and JavaScript, as well as frameworks like React, Angular, or Vue.js.
Experienced front-end developers with expertise in specific frameworks can command higher salaries. Some frameworks are more complex to learn and use, requiring more development time and potentially higher costs.
Below is a rough estimate for building a basic front end.
| Simple, single-page application | $5,000 – $15,000 |
| Medium complexity, multi-page application | $10,000 – $30,000 |
| Complex, feature-rich application | $20,000 – $100,000+ |
7. Back-end Development
The cost of back-end development for a SaaS product is influenced by several factors, including:
- The selection and configuration of the server platform
- The need for third-party software or data
- The administrative tasks involved managing user accounts, data backups, and permissions
These costs can vary significantly, with an estimated time frame of 20-25 weeks and a cost range of $16,000 to $56,000 depending on the complexity of the project and developer fees.
8. Update and Maintenance
Update and maintenance are the critical factors of SaaS application cost. SaaS providers typically charge monthly or annual subscription fees that often include updates and maintenance. However, these fees can vary significantly based on the complexity of the application, the level of support offered, and the number of users.
9. Customer Support
After releasing the product in the market, the next step is to provide better customer support. Assist customers by answering their queries if they face any issues in using the product.
Also, keep in mind that customer support is important but it’s not free. It comes at a cost and budgeting for the same while planning for your SaaS product.
10. Marketing and Sales
Marketing and sales are crucial for SaaS success, but they also come with significant costs. These costs include developing marketing materials, running advertising campaigns, attending industry events, building a sales team, and managing customer acquisition strategies. The cost of marketing and sales can vary greatly depending on the target market, the competitive landscape, and the chosen marketing channels. Effective marketing and sales strategies are essential for driving user growth and generating revenue for SaaS products.
How Long Does it Take to Build a SaaS Platform?
The time to build the SaaS platform can depend on several factors such as:
| Factor | Impact on Development Time |
| Complexity of Features | More complex features require more time to design, develop, and test. |
| Size of Development Team | A larger team can work on more tasks simultaneously, reducing overall development time. |
| Experience Level of Developers | Experienced developers can work more efficiently, leading to faster development. |
| Technology Stack | Some technologies are more complex than others, impacting development time. |
| Design and User Interface (UI) | A complex UI requires more time to design and develop. |
| Integration with Third-Party Systems | Integrating with other systems can add complexity and time to the development process. |
| Testing and Quality Assurance (QA) | Thorough testing is crucial for a successful SaaS platform, and it takes time. |
| Deployment and Maintenance | Deploying and maintaining a SaaS platform requires ongoing effort. |
The below table shows the rough estimates of the time of building the SaaS platform. The actual development time can vary significantly depending on the specific project.
| Simple SaaS platform | 3-6 months |
| Medium SaaS platform | 6-12 months |
| Complex SaaS platform | 12+ months |
SaaS Development Cost – Examples
Let’s look at some SaaS development cost examples, keeping in mind that these are estimates and actual costs can vary widely:
Example 1: Simple Project Management Tool
Features: Task management, project boards, basic collaboration features, user accounts
Technology: React for front-end, Node.js with Express for back-end, PostgreSQL database
Development Team: 2 developers (front-end and back-end)
Estimated Cost: $15,000 – $30,000 (including design, development, and basic testing)
Example 2: E-commerce Platform for Small Businesses
Features: Product catalog, shopping cart, checkout, order management, payment integration, basic analytics
Technology: Vue.js for front-end, Python with Django for back-end, MongoDB database
Development Team: 3 developers (front-end, back-end, and database)
Estimated Cost: $30,000 – $60,000 (including design, development, and basic testing)
Example 3: Online Learning Platform
Features: Course creation, video hosting, quizzes, user profiles, community forums, payment gateway integration
Technology: Angular for front-end, Java with Spring Boot for back-end, MySQL database
Development Team: 4 developers (front-end, back-end, database, and QA)
Estimated Cost: $60,000 – $120,000 (including design, development, and testing)
Example 4: Enterprise Resource Planning (ERP) System
Features: Inventory management, accounting, customer relationship management (CRM), payroll, reporting, integrations with other systems
Technology: React for front-end, Node.js with Express for back-end, PostgreSQL database
Development Team: 5+ developers (front-end, back-end, database, QA, and DevOps)
Estimated Cost: $100,000+ (including design, development, testing, and ongoing maintenance)
Successful Examples of SaaS MVP Development Cost
Below are some successful top leaders in the market to help you better understand the SaaS product development cost.
Slack
Slack is a cloud-based team communication platform that allows users to communicate with each other in real-time. It’s faster, better organized, and more secure than email. This tool makes the teams more organized and productive by providing an easy-to-use interface.
Main Features
- File sharing
- Chat privatization
- Video and audio calls
- Set reminders
- Know team availability
- Get notifications
- Apps and integrations
Cost: The Slack app development cost is around $1.5 million.
Zoom
Zoom is a video telephony cloud-based platform that streamlines online communication. It is the one-stop solution for video calls with live messaging and content sharing. This tool allows users to create and join virtual meeting rooms where they can communicate with each other using video, and audio.
Main Features
- Use AI to generate team chat replies, summarize video calls, and share your availability to streamline scheduling
- Screen sharing
- Record meetings and generate transcripts
- User-friendly interface
Cost: The cost to build the Zoom’s MVP was around $250,000.
Shopify
Shopify is a complete eCommerce platform that makes it easy for all sizes of businesses to build and manage their online stores. It is a subscription-based SaaS sales platform that helps businesses sell their products online.
Main Features
- Currency conversion
- Product management
- Customizable website, templates, etc
- Secure payment handling
- Ship orders faster
Cost: Shopify’s Minimum Viable Product (MVP) transformed online shopping for small businesses and entrepreneurs. By providing a user-friendly platform for creating online stores, it significantly lowered the barrier to entry for e-commerce. This success is reflected in the estimated $500,000 cost of developing a similar SaaS platform for Shopify.
Tips for Reducing SaaS Platform Cost
Building a SaaS app can be costly, requiring careful planning and budgeting. Therefore, for your help, we compiled some expert tips to help you reduce the cost of building the SaaS platform.
- Start with an MVP that includes only essential features. This allows you to test your concept and gather user feedback before investing in more complex features.
- Consider using open-source software and tools whenever possible. This can significantly reduce licensing costs and provide access to a large community of developers.
- Don’t be afraid to negotiate with vendors for better pricing, especially if you are committing to a long-term contract.
- Use automation tools to streamline repetitive tasks, reducing the need for manual labor and potentially lowering personnel costs.
- Regularly monitor your platform’s usage and costs to identify areas where you can optimize and reduce expenses.
- Invest in a user-friendly interface and intuitive design. This can reduce support costs and increase user satisfaction.
- Serverless computing can reduce infrastructure costs by only charging for the resources used.
- Ensure your platform is responsive and works well on mobile devices, as this can attract a wider audience and reduce development costs for separate mobile apps.
- Continuously review your platform’s costs and make adjustments as needed.
Want to Build Your Own SaaS Platform with NinjasCode
SaaS is a prominent niche and is in high demand among businesses. The SaaS implementation will give companies more scalability, flexibility, data security, and cost efficiency.
If you want to build your own SaaS platform, you can consult NinjasCode. We have experience in developing and delivering solutions including SaaS of any complexity to our clients. From small startups to large enterprises from various business domains such as education, health, fintech, ecommerce, and more, we provide solutions.
When you work with us, you will get these perks:
- Dedicated team
- Flexible payment plans
- Timely delivery of projects
- Use latest technologies
Moreover, our specialists analyze your requirements and provide you with accurate SaaS development cost estimates.
Conclusion
How much does it cost to build a SaaS platform? If you decide to invest in SaaS development, this question is relevant more than ever. Now, you have to know that every SaaS project is unique, and the cost of building depends on your project requirements.
You can also schedule a meeting with us, to discuss your requirements, and get an estimate for your SaaS product.
