SaaS Product Lifecycle: From Planning to Successful Launch

Imagine living in a world where SaaS products don’t exist. Imagine organizations have to manage customer interactions without software like Salesforce and Zoho, organize workflows without project management tools like Asana and Trello, and establish communication among remote teams without apps like Google Meet and Slack. They would face enormous challenges in managing their routine tasks and operations.

Fortunately, with the rise of high-speed internet and cloud computing, software as a service (SaaS) products have become widely available for businesses of all sizes. As of 2023, companies are using around 130 SaaS apps on average. This number has increased by 18% compared to the previous year, and this growth shows no signs of stopping.

SaaS tools have become irreplaceable. They not only allow instant access to required services without requiring maintenance; they also contribute to cutting time and resources.

In 2022, early-stage SaaS startups received over $30 billion in venture capital (VC) investment. Consequently, if you’ve decided to enter the SaaS market with your own product, you have a great chance of finding a niche and dedicated customers. The question is, where should you start? How can you build a SaaS development process that will cover all aspects required to create a product that brings true value to its users? This article aims to provide you with a comprehensive guide to the SaaS product development lifecycle.

How does software as a service (SaaS) differ from software as a product (SaaP)?

Before we move to the main point of this article, it’s necessary to explain the difference between SaaS and on-premises (also known as software as a product, or SaaP) products. Software as a product refers to a traditional model where software is sold and distributed on a license basis, while software as a service (SaaS) is a cloud-based model in which software is accessed over the internet and charged on a subscription basis.

We will point out what you need to consider before we proceed to the SaaS product development lifecycle.

Delivery method. SaaS products are hosted in the cloud and are delivered via the internet, while traditional software needs to be installed on the user’s device. That’s why you should choose a cloud provider to host your SaaS app.

Pricing. On-premises software is sold with a perpetual license for a one-time upfront cost. When it comes to the SaaS business model, there are several monetization strategies: users can pay a fixed monthly/yearly fee, pay for certain features, etc. When building a SaaS product, you are free to choose from several monetization methods.

Maintenance. A SaaS product development team handles software maintenance, upgrades, and security. With on-premises software, the development team issues updates, and users either update the software manually or simply use an outdated product version.

Customizability. SaaS applications are designed to be customizable and configurable, allowing users to adapt them to their specific needs. Regular software usually has limited customization options.

Scalability. SaaS apps need to dynamically scale resources up or down based on demand. Additionally, scalability means more than just accommodating a larger number of users; it also involves expanding the product’s functionality. SaaS apps can be launched with just one or a few features and then get enriched with new ones. On-premise software doesn’t need a high level of scalability.

Integrations. Most SaaS applications are integrated with other cloud-based services, such as payment gateways and email providers. Traditional software doesn’t necessarily require third-party integrations.

These are the key aspects that distinguish a SaaS product from traditional, on-premises software. You need to consider them before you proceed to the development of your own SaaS product.

Stages of the SaaS product development lifecycle

Just like traditional software, SaaS products are built following a certain development lifecycle. In this chapter, we guide you through the SaaS product development lifecycle.

1. Planning

The main purpose of this stage is to form a clear vision of the product to be built, define your main goals, find out about the prospects for your product on the market, spot your competitors, and anticipate and plan everything you may need during the actual development process.

As you’re reading this article, you may already have an idea of the product you want to create. However, it’s necessary to shape your idea and evaluate its viability. For this, you need to conduct market research.

Market research

Market research is one of the key components of the SaaS development lifecycle, as it ensures your project’s success. It encompasses defining your target audience as well as researching your competitors and the industry as a whole.

• Target audience research

Defining the target audience is very important for any software development project, as it allows you to understand the product’s potential customers. Within the scope of this process, you will have to find answers to the following questions:

Who are your product’s target customers?

What are your target customers’ specific needs?

What are the key features that customers expect from your software?

The first thing you should do is to determine who your ideal customer is. Second, you should identify research methods that will help you collect information about your potential customers’ needs; some of the most common include surveys, interviews, and usability testing. Finally, you need to analyze the received data in order to identify patterns and trends. This will help you understand how you can satisfy your users’ needs with your product.

The outcome of customer research is an established user persona — a portrait of your ideal customer.

• Competitor research

Competitor research helps you understand your prospects on the current market and find out how to launch a competitive, valuable product. This process is aimed at defining your key competitors:

Who are your main competitors in the market of similar software solutions?

What are the key features offered by competitors’ products?

What are the strengths and weaknesses of competitors’ products?

You should start by identifying your direct competitors (those who offer a SaaS product similar to yours) and indirect competitors (those that may solve the same problem using a different approach) in the SaaS niche you are about to enter. Evaluate their products, explore features they offer, and analyze their user interfaces. Pay attention to their value propositions, pricing models, feature sets, and unique selling points. Consider how your product can compete with them in terms of functionality, user experience, and innovation.

The outcome of competitor research is comprehensive information about SaaS solutions similar to the one you want to create. You need to know their unique selling propositions (USPs), pricing strategies, striking features, and other characteristics.

• Industry research 

Industry research helps you understand opportunities for business growth in the desired market segment. It involves investigating current SaaS industry trends, key players, and business models:

What is the current state of your target market? 

What are the key trends in your target market?

What are the industry-specific challenges or pain points that your software could address?

You need to identify reliable sources for your research (industry reports, market studies, reputable news outlets), collect data, and analyze it to then use it for planning the development process.

Selecting a SaaS architecture model

Architecture refers to the overall structure, design, and organization of a software system. It has a strong influence on the software’s scalability and performance. When it comes to a SaaS architecture, you can choose from two options: single-tenant or multi-tenant.

To explain the difference, let’s compare an app’s architecture to a house.

A single-tenant app is a single-family home. One family can live there and enjoy all the amenities for themselves. This is similar to when an app is built to be used within a single organization.

But when you build a SaaS app, you want to serve multiple groups of users. So if you build a single-tenant app, that means you have to accommodate multiple families in one house. With the single-tenant architecture, you can build a large house and give each family their own private room. However, they’ll have to share common spaces with other families. This may cause some inconveniences, as all users of a single-tenant app have to share finite storage and computing capabilities. When one user consumes too many resources (like a neighbor that uses all the hot water), other users may notice the app lagging.

Surely, you can build a separate house for each family. In this case, they will all get ideal living conditions and support and be really happy. However, in the case of a SaaS product, this means that you will have to build a whole new app for each client. This is definitely overkill, as there’s a better solution to give your clients the privacy and autonomy they desire.

With a multi-tenant architecture, you build an apartment building and each family gets their own apartment. They don’t have to share the kitchen or living room with other families, as they each have their own. They can also customize their apartment according to their preferences. Generally, each user of a multi-tenant app gets infrastructure reserved just for them. They aren’t affected by the neighbors and their habits.

On the whole, a multi-tenant architecture is more stable and easier to scale than a single-tenant architecture. It also allows you to customize the SaaS app for the needs of the specific customer, which contributes to user loyalty.

If you would like a more detailed explanation of the SaaS architecture, read our article on the SaaS platform architecture.

It’s important to note that the choice between a single-tenant and multi-tenant architecture depends on various factors, such as the nature of the application, target customers, requirements, scalability plans, and cost considerations. Switching from one tenancy model to another is challenging, so carefully consider all of these aspects before you choose.

Selecting a cloud provider

Choosing the right cloud provider to host your SaaS product is crucial because it will directly impact your application’s performance. You need to assess cloud providers in terms of reliability, flexibility, scalability, accessibility, security, and other aspects and choose the most suitable option for your project.

As of Q4 2022, the most in-demand vendors in the cloud infrastructure services market were Amazon Web Services (32% market share), Microsoft Azure (23% market share), and Google Cloud (10% market share). Let’s take a brief look at each of these services.

1. Amazon Web Services (AWS) is known for its comprehensive range of over 200 services. Among them, you will find Amazon Simple Storage Service (S3), Amazon Elastic Block Store (EBS), Amazon Relational Database Service (RDS), AWS Lambda (a serverless computation engine), Amazon Virtual Private Cloud (VPC), user management features, and more.

2. Microsoft Azure can be considered as a cheaper alternative to AWS. It’s a cloud platform that provides a wide range of services such as Azure OpenAI, Cortana Analytics, stream analytics, machine learning, and SQL services. Besides, it integrates well with Microsoft’s product suite, making it suitable for organizations with existing Microsoft infrastructure.

3. Google Cloud is Google’s cloud computing platform that emphasizes scalability and offers a suite of advanced features such as AI and machine learning, virtual machines, a Kubernetes engine, and BigQuery.

At Clockwise Software, we prefer AWS since it offers wide functionality and the potential for scalability and customization. Many of our clients and partners prefer AWS too. Check out the case study for Whitelance — our biggest multi-tenancy project — to see an example of how AWS can be used in SaaS application development.

Note that it will be difficult to change the cloud provider once your product is deployed. In doing so, you will face challenges with data migration (which is time-consuming and costly). You may also encounter some security implications when moving data from one environment to another. Additionally, you will face infrastructure differences (which may require serious architectural rework) and the need for staff training (you will have to invest time and resources to train your staff to work with the new platform and tools). So choose wisely.

Defining your revenue strategy

Choosing how you will monetize your app is one of the crucial factors impacting its success. When choosing a pricing strategy, consider factors such as your target market, competition, and the value of your app. Here are some of the most common pricing models you may want to consider:

• Freemium

Freemium is probably the most popular pricing model. With the freemium model, you offer a basic version of your app for free with limited features and functionality. As users start seeing the benefits of your app, they can switch to a premium plan and unlock more features. This strategy helps you attract a larger user base and allows users to assess the value of your app before paying for it.

• Flat-rate pricing

Flat-rate pricing is one of the simplest ways to sell your SaaS solution, as it provides access to all app features for a single fixed price. This strategy offers predictability and simplicity but may not be suitable if your app has a set of features with different levels of value.

• Tiered pricing

Tiered pricing is one of the most flexible pricing models. It involves charging customers according to the number of features they use by offering different feature packages suitable for various budgets and needs. This strategy allows you to cater to different customer segments and their specific needs while providing an opportunity to unlock more features.

• Usage-based pricing

Usage-based pricing, also known as the pay-as-you-go model, is the most transparent way to sell your app: users pay only for the services they use. This pricing model makes it difficult to predict revenue but offers high customizability for users and reduces usage barriers. Users pay more as their needs increase or pay less as their needs decrease, without any upfront costs.

You don’t have to stick to one pricing model; you are free to test various models until you find the most suitable one for your SaaS product. For example, you can start from freemium when launching the first version of your app, then switch to tiered pricing as you gain a loyal user base.

How can you handle the SaaS product development planning stage?

Everything related to a project’s planning is usually handled on the side of the product owner and stakeholders. However, if you don’t have the necessary technical expertise in-house, or if you simply don’t have enough time to dedicate yourself to a new project, you have two ways to go: pay for a discovery phase service (or software development consulting), or outsource the whole project to a reliable software development company that has experience in SaaS product development.

By choosing the first option, you outsource the research and preparation of the actual development process to an expert team. This team will do everything to extract the most value from your idea. The artifacts you get as the result of a discovery phase are called deliverables. They may include an interactive prototype, a risk assessment and mitigation plan, time and cost estimates, a product roadmap, a product architecture, and a feature breakdown structure. When paying for a project discovery phase, you can choose the type and number of deliverables to provide the most value to your project.

The second option is IT outsourcing. In this case, a development team consisting of specialists chosen according to the specifics of your project will start the development process from the discovery phase and lead it right through the product’s launch.

The second stage is requirements elicitation, which is based on the results of the planning stage.

2. Requirements elicitation

The development of any software product requires a clearly defined plan, strategy, and requirements. You can’t just reach out to your development team with a brief description of a SaaS product you want to get. They won’t be able to create the solution you desire without having complete, clear requirements and being aware of your expectations.

The development process should be based on a software requirements specification (SRS) document that describes the project’s goals, the scope of work, functional and non-functional requirements, features, and functionality to be developed. An SRS document serves as a guide for the team throughout the development process. It also reduces the time and resources required to complete your project by making the development process and its outcome more predictable, organizing the workflow, and avoiding misunderstandings within the team.

An SRS document should be laid down according to decisions made during the planning stage. The creation of an SRS document is the responsibility of a business analyst (BA). The business analyst discusses the project’s goals and expectations with stakeholders and the development team to form precise and comprehensive documentation.

Depending on the development methodology you choose (we will talk about the options later), requirements may be strict or changing. However, it’s important to make the SRS document as precise as possible.

According to the EEE/ISO/IEC 29148 standard, an SRS document should consist of three parts:

Product overview 

• Introduction
• Objectives
• Types of users

Requirements

• Scope of work
• Functional & non-functional requirements
• UI requirements

Appendix

• Glossary
• References
• Assumptions & dependencies

This example is not the holy grail; an SRS document is intended to be used within the group of people involved in the project and interested in its success, so its length, level of detail, structure, and format may vary. The main thing you should remember is that an SRS document should be understandable for all team members and stakeholders.

If you decide to outsource the discovery phase or outsource your entire project to a software development company, you will get an SRS document as one of the deliverables.

3. UI/UX design stage

The user interface (UI) and user experience (UX) design stage in the SaaS product development lifecycle is about elaborating the visual and interactive aspects of your software: that is, everything that users will see and interact with while using your application.

A UI/UX designer is the one responsible for your product’s design. This team member creates a prototype of the product in accordance with the requirements and shapes it until it fully meets stakeholders’ expectations.

When working on the user interface of your SaaS app, you should prioritize versatility and flexibility. Since SaaS apps are accessed via the web browser, it’s necessary to create a UI that is convenient and intuitive on both mobile and desktop devices. A UI/UX designer should prepare design variants for devices with different resolutions.

For the first version of your app, focus on simplicity and user-friendliness. You shouldn’t waste too many resources on this version, as your purpose is to highlight the most important features, make them easy to use, and ensure that your user interface is intuitive.

It’s also important to note that design trends change constantly, and it’s important to follow these trends to remain competitive on the changing market. Identify common design patterns used by the industry’s top players, learn from them, and develop an up-to-date, trendy app design.

4. Development and testing stage

Once you have requirements and a UI/UX design in hand, you can proceed to development. During this stage, backend and frontend developers create your SaaS app, its functionality, and its interface in accordance with the requirements. Along with QA engineers, developers ensure that each part of the app works properly — both in isolation and as part of the system.

As you start the development process, you need to choose the technologies that will be used for building the client and server sides of your SaaS application.

Choose a technology stack

Everything related to the choice of technologies, programming languages, and tools to use during the development process will be handled by the frontend and backend developers within your in-house or outsourced team. This choice is based on your needs and goals, the project’s scale, and your budget and resources. First, you need to choose the frontend and backend technologies.

Front end

Since your SaaS app will be accessed via a web browser, you can only choose among JavaScript frameworks, as this is the only programming language browsers can interpret. There are dozens of JavaScript frameworks, but the most popular and widely used are Angular, React, and Vue.js. Check out our Vue vs. React vs. Angular article to find out more about the strong and weak sides of these JavaScript frameworks.

Back end

For the back end, you can choose from various programming languages and frameworks including:

• JavaScript (Node.js)
• PHP (Laravel)
• Ruby (Ruby on Rails)
• Python (Django, Flask)

Choosing JavaScript for both the front end and back end of your project will be a wise choice, since you won’t have to hire two separate teams or involve additional specialists to work on your project. Moreover, a JavaScript-based stack allows for scaling fast as your startup grows, which means you won’t have to switch to more advanced technologies over time.

Third-party integrations

Third-party integrations are a vital part of any SaaS product. Each SaaS product we use in our daily life or work routine is integrated with a bunch of other services. For example, Slack is integrated with Google Drive (to share and collaborate on files directly from Slack), Zoom (to start video conferences or join meetings from within Slack), and Trello (to integrate task management and project tracking into Slack).

Third-party integrations are added by means of application programming interfaces (APIs) — a type of software interface that allows two or more software products to communicate with each other (and defines how they do so). To add a third-party integration, you need to explore an API of the service you would like to add.

There are many integrations you can add to your SaaS app: payment gateways, mapping and geolocation services, email marketing platforms, customer relationship management platforms, social media platforms, reporting and analytics tools, and others. The integrations you choose to add will depend on the type of your SaaS app and your target audience’s needs.

Choose a software development methodology 

Software product development is conducted according to a certain methodology. There is an abundance of software development methodologies that can organize a team’s workflow. We will talk about two essential ones: Agile and Waterfall.

• Waterfall

According to the Waterfall methodology, the product is developed according to a strict step-by-step plan, with few to no changes. Each phase of the software development process must be fully completed before the team moves to the next. This methodology is usually used by experienced teams for projects whose outcome is predetermined and for which the risk of failure is minimal. If you want to use the Waterfall approach, you need to be 100% sure about what you’re doing and not make changes to the initial plan.

• Agile

Agile software development takes an iterative approach. Each iteration gets evaluated as it ends so that positive changes can be made before the next iteration begins. This methodology allows for making changes in the initial plan and requirements. Agile is all about frequent releases and communication with users. It allows for fixing issues at the early stages of development, saving resources, minimizing risks, and adapting to changing external circumstances.

At Clockwise Software, we are committed to the Agile methodology, as we value its flexibility and adaptability that allow us to create user-oriented products and quickly adapt to market changes.

Create an MVP

A minimum viable product (MVP) is the first version of an app that has just enough features to be evaluated by users. Instead of launching a product with excessive functionality and risking user indifference, we recommend investing in an MVP first. This will allow you to shape your product based on real user feedback (instead of building a full product relying on assumptions and predictions) and spend your resources wisely, avoiding risks associated with user acceptance.

It’s essential to prioritize software testing during the MVP development process. The software testing lifecycle (STLC) is an integral part of the software development lifecycle (SDLC). Tests may be written even before actual code is implemented. There are dozens of testing methodologies and types, and which are relevant to your project will depend on numerous factors such as your project’s budget, scale, and complexity.

Some founders neglect testing, considering it costly and unnecessary. However, such disregard can cause significant financial and brand damage that may be impossible to recover from. By incorporating thorough testing practices, you can identify and address potential issues early on, ensuring your product’s stability and reliability. If you want to find out more about the STLC and its importance, read our complete guide to the STLC.

By combining the creation of an MVP with effective software testing practices, you can optimize your development process and mitigate potential risks, ultimately delivering a high-quality product that meets users’ expectations.

5. Maintenance and support stage

A truly valuable product is not one that was successfully launched and well-accepted. It’s a product that remains irreplaceable for its users no matter what. That’s why you should always follow industry and design trends and keep up with innovations.

The SaaS app market is constantly evolving and expanding. You should consider your SaaS product’s launch as the beginning of your path rather than its final stage. Encourage your users to leave feedback, follow the competition, look for new ways to improve your product, and invest in updates.

You can entrust your SaaS product’s maintenance to your in-house team or to a third-party software development company.

Conclusion

In general, the SaaS lifecycle is similar to the software development lifecycle, with only a few additions such as the need to choose a cloud service provider and delivery model as well as the need to design a UI/UX that is both mobile- and desktop-friendly. SaaS product development covers such stages as planning, requirements establishment, UI/UX design elaboration, development and testing, and maintenance and support.

Obviously, SaaS product development requires specific expertise. If you don’t have this expertise in-house, you can rely on CTO as a service to get an on-demand technical expert that will consult on all tech-related questions. Or you can outsource the whole project to an experienced SaaS development company.

At Clockwise Software, we have broad experience in SaaS product development. We have successfully completed multiple SaaS projects including Segment AI (a lead segmentation tool), StoneBay (custom property management software), and BackupLABS (a platform for backing up data).