SaaS is now one of the most widely used business models in the recent past to generate more revenues. However, SaaS is known to be quite expensive, as the actual cost of SaaS development starts at $60,000. For many businesses, this is convenient and cheaper as it enables the owners to pay a subscription fee to access an application from any connected device.
However, creating a high-quality SaaS product demands more initial investment, so the development costs are higher than for conventional software. Also, SaaS development often requires many programming languages, such as Python, Django, Flask, etc.
In this article, we are considering some main reasons why SaaS development is expensive:
1. Complex Infrastructure
In contrast to on-premise software, where the application resides in a customer’s IT infrastructure, SaaS applications are hosted on the cloud. This implies that the developer has to handle servers, databases, APIs, networks, storage, and backup, among other things. The infrastructure must be responsive to user traffic, highly available, dependable, and secure, which can imply using more than one programming language in the development process. All this entails considerable fixed capital investment in infrastructure.
2. Ongoing Operations and Maintenance
This means that the work continues once the SaaS application is deployed in the market. The developer team has to stay vigilant of the software and keep it updated with new features, bug fixes, compliance, and performance. Such costs must be factored into the subscription price and cannot be overlooked as one-off costs only.
3. High Level of Customization
It is also important to remember that every business is different and may require specific features unavailable in a standard package. SaaS products must be able to customize features, integrations, roles/permissions, and workflows according to the client or the organization. Backing all this customization requires intricate product development.
4. Integrations and API Development
Today’s SaaS platforms depend on hundreds of third-party applications their customers employ. Maintaining open APIs and integrating with CRM, marketing, payments, and similar applications is highly developer-intensive.
5. Multi-tenant Architecture
SaaS applications utilize multi-tenancy, which enables the delivery of applications to multiple customers from a single instance of the software. When the product is designed as multi-tenant, it creates additional challenges for developers, increasing the costs.
6. Responsiveness and Mobility
Modern users interact with SaaS applications not only from their workstations but also from their mobile devices, including smartphones and tablets. Application developers must spend some additional time and effort to ensure that the application is responsive so that it mimics the native app experience across different devices and screen sizes.
7. Rigorous Testing
SaaS solutions cannot afford to be unavailable or lose data, as organizations depend on them to run. Before deployment, they should be properly tested on all aspects, including key user flows, integration points, scalability of infra, etc. Such rigorous testing raises product release overheads.
8. Ongoing Product Expansion
The product requires new apps, microservices, and features to retain subscribers in the competitive environment. Over the years, a significant investment in product line extension has led to increased product development costs.
Therefore, the requirement of building complicated structures, tailoring the item, adding more functionalities, offering constant access, programming in several languages, including Python, and conducting thorough validation makes SaaS application development a costly process. The costs are further magnified when it comes to managing live products that are being used by thousands of business customers in their operations. Such factors explain why established SaaS companies invest millions of dollars and employ numerous engineers to develop and launch new products.