How Much Does It Cost to Build a SaaS Platform: A Comprehensive Guide for 2024

Software as a Service (SaaS) is the preferred business model for IT solutions in different sectors. It allows companies to sell their products immediately with all the necessary updates when needed. That's why businesses are focusing on SaaS product development.The question they are thinking about is the cost of starting a SaaS product.

We’ll use our personal experience to clarify the price details of creating viable SaaS products. So, this article will describe SaaS development costs forming aspects, price estimation examples, and many more.

When developing a SaaS application, it is important to understand that the cost goes beyond just a number. Now, we’ll delve deeper into the key elements contributing to the formation of SaaS development costs.

The complexity and scope of a SaaS project play a significant role in determining its cost. Projects with complex features (involving extensive user processes or requiring large-scale implementations) typically demand more time, resources, and expertise, which may lead to increased development expenses.

The intricacy of your SaaS app can range from basic to complex, depending on the features you want to include in the product (e.g., payment gateway integration, custom app interface, or automated email alerts) and considerably affecting the cost of SaaS implementation and development. The SaaS app development scope can be influenced by the number of users you plan to target and the range of products or services you want to provide.

According to our SaaS software development experience, we broke the complexity of the Software-as-a-Service applications into four levels, giving a rough cost of building a SaaS product to each of them:

• Micro SaaS development costs may vary from $10,000 to $25,000+
• The approximate price for a SaaS app of the basic level may vary from $25,000 to $50,000+
• The medium SaaS software cost will be equal to $50,000-$150,000+
• The complex SaaS app may cost $150,000-$500,000+

You should be informed that the above prices are approximate and can vary. To calculate the cost of your SaaS idea, contact our Business Development manager.

The type of SaaS application you plan to develop significantly influences the complexity of developing a SaaS app and SaaS startup cost. Straightforward may demand less effort and financial investment due to their standard functionalities and widely available integrations. On the other hand, the cost to develop a more intricate solution tailored to specific industries or business needs, with a sophisticated technology stack and numerous integrations and custom features, may be much higher. For example:

• Custom CRM development may cost $30,000 - $150,000+
• E-commerce website development can cost anywhere from $40,000 to $200,000+
• ERP software development cost may vary from $50,000 to $250,000+
• Human Resources Management software development can cost from $25,000 to $120,000+

Understanding the specific requirements and complexities associated with each type of application is crucial for accurately estimating the cost of SaaS software development.

The cost of developing a SaaS platform largely depends on the number and complexity of features. For instance, including advanced features, customizations, or integrations with external services can increase the development resources and time needed, thus extending the overall expenses. It’s good to consider the Minimum Viable Product (MVP) development to keep the cost of a SaaS software development down. It means building an app version with only core features implementation to test its viability on the market. Here’s an approximate cost of building a SaaS product MVP:

• Simple SaaS MVP: $25,000 - $50,000
• Medium complexity SaaS app MVP: $50,000 - $150,000
• Complex SaaS MVP: $150,000 - $300,000+

Building a SaaS MVP is an efficient strategy of cutting budget costs and gathering early users’ feedback, as it focuses on the essential functions integration. The list of must-have functionality for the typical SaaS app is below for your consideration.

Your SaaS product's UI and UX design is vital to its success. When it is planned properly, it will improve the user journey by delivering an efficient user experience while reducing customer churn rates. Here’s how UI/UX design influences cost of creating SaaS platform:

• Simple SaaS application design: includes basic UI elements and minimal custom features. Cost can range from $5,000 to $15,000, depending on the size of the application and the number of screens.
• Medium complexity design: includes a more advanced user interface with additional features and user experience capabilities. Cost can range from $15,000 to $40,000, depending on the number of screens and level of design detail.
• Complex design: involves a high level of detail, unique user elements, and an elaborate user experience. The cost of developing such a design can start at $40,000 and exceed $100,000, especially if each screen and interface element needs to be customized.

How much does it cost to build a SaaS platform? The chosen cooperation model largely determines it. The most commonly utilized models for software development are outsourcing and outstaffing, both of which have distinct advantages when it comes to cost and project management.

Outsourcing in SaaS development means hiring a software development agency not affiliated with your company. This model allows you to reduce internal development costs and flexibly scale resources.

Outstaffing in SaaS development involves hiring remote team members through an IT service provider. These specialists are part of your team but are contracted and managed by an external provider. It allows you to optimize costs by reducing office space and equipment expenses.

The development team’s location can also influence cost of developing a SaaS platform due to variations in labor rates and overhead expenses. Moreover, if you are hiring a SaaS development outsourcing company, you should know that every IT outsourcing destination has its own price for software development services.

Below we give you the average hourly wages for the services of IT specialists in different regions.

The size and structure of your development team can also affect the SaaS software development costs. If you have a larger team, it may be more expensive as there will likely need to be more meetings and communication between team members. On the other hand, a smaller team may be more cost-effective if you don't require as many resources to complete the project.

The team composition for SaaS product development can include the following specialists:

• Project manager to coordinate and oversee the project
• Business analyst to gather requirements and translate them into technical specifications
• Solution architect to manage the database infrastructure
• UX/UI designer to create the user interface and experience
• Developers to build the client-side components and handle server-side development
• QA engineer to conduct testing and ensure quality
• DevOps engineer to manage deployment and infrastructure

Remember that this is not the ultimate staff composition for your SaaS app development project. The number of specialists and additional roles may differ concerning the project’s complexity, scale, functionality, and specific business requirements.

Cleveroad is eager to help you with a proper team composition according to your project’s specific demands and budget. Our IT professionals will help you bring any-scale SaaS projects to life, backed by 12+ years of experience in SaaS software development.

The tech stack also impacts the cost to build SaaS product. Certain technologies or frameworks may require specialized expertise, licensing fees, or additional development time.

Moreover, you should realize that integrating the SaaS app with 3rd-party services or building APIs for integration with other systems can also add to the development expenditures. The complexity and number of integrations required affect the effort and resources needed.

Please be informed that the complete tech stack choice and a list of integrations depend on the particular project peculiarities. To facilitate your task, you can ensure the support of an IT vendor. They will help you select the appropriate tech stack for your SaaS product.

SaaS applications are prime targets for hackers due to the sensitive user data they handle. The risks, such as data breaches, malware attacks, and leaks, can lead to severe financial and reputational damages. Non-compliance with privacy and security regulations can result in substantial fines. Continuously addressing safety issues can be resource-intensive, while lacking customer trust hinders your chances of success.

Incorporating robust security measures during product development is essential not only for safeguarding sensitive data but also for ensuring compliance with industry regulations. Implementing features such as two-factor authentication, role-based access control, and field-level encryption adds an extra layer of security to the system, thereby mitigating the risk of unauthorized access and data breaches. While these security measures may increase the initial development costs, they ultimately contribute to long-term cost savings by protecting against potential security incidents and regulatory fines. Thus, investing in security measures upfront can result in greater overall cost-effectiveness and peace of mind for both businesses and their users.

The SaaS app development includes several stages. Each influences the overall price to build a SaaS product. Let’s explore each essential stage and how it impacts overall SaaS development estimate:

The Discovery phase’s aim is to create a roadmap for successful SaaS platform implementation. It implies gathering data about your business, requirements analysis, and defining the scope of the upcoming project. This phase is crucial when you plan to start a SaaS company successfully. Product Discovery Phase services typically take one to three weeks. To estimate the cost of this phase, multiply the total number of hours (40-120) by the hourly wage of a specialist. The estimated cost will be $1,600-$4,800+.

We at Cleveroad offer two types of project estimates: rough and detailed.

• A rough estimate provides clients with a general idea of expected costs and development stages. It undergoes two iterations, with the first one compiled after a Solution Design Workshop and the second after the Discovery Phase. The second iteration incorporates updated requirements and team composition, resulting in a more accurate assessment.
• A detailed estimate involves developers directly and is based on thorough documentation and requirements from the Discovery Phase. It offers a highly accurate cost evaluation and is created during the development phase, considering various factors and incorporating detailed requirements for each sprint or two. This ensures meticulous planning and transparency in project management.

At this phase, UI/UX designers focus on crafting an intuitive and user-friendly interface of SaaS solution that fosters engagement and encourages users to interact frequently with the platform. They meticulously build a SaaS app design for each element, from navigation menus to interactive components, ensuring a seamless and enjoyable user experience. Additionally, the design team starts a SaaS design by conducting user research and testing to gather insights into user preferences and behaviors, refining the design iteratively to optimize usability.

The cost of UI/UX design services for SaaS varies depending on factors such as project complexity, the scope of work, and the level of customization required. Prices typically range from $5,000 to $50,000 or more, with more complex projects commanding higher costs due to the additional time and expertise needed to create tailored and impactful designs.

SaaS solutions incorporate a range of frameworks, libraries, and development tools within their intricate architecture which includes front-end and back-end development. From an implementation perspective, SaaS components can be developed on outsource to a third-party provider. For example, many SaaS companies rely on third-party providers for hosting and maintaining their products.

Approximately, two SaaS developers at least can create an MVP in three months, resulting in a minimum cost of developing a SaaS platform of $30,000+. Don’t forget about the expenditures for Quality Assurance services that are the essential part of the custom software development services for a SaaS product, which can range from $5,000 to $20,000+.

Support and maintenance is a critical factor of SaaS application cost. The monthly cost of maintenance and upgrades by a small team of developers, designers, and quality assurance engineers will range from $10,000 to $20,000+. Average SaaS hosting fees may vary from $1,000 to $10,000+.

Operations must adhere to project requirements, service-level agreements, security regulations, and the common infrastructure of cloud services. Launch marketing and sales campaigns effectively when launching your SaaS solution. Refresh, upgrade, and optimize services frequently. Developers must implement updates using no-downtime deployment to ensure continuous availability and avoid user base fragmentation. Post-release expenses may also include SaaS product promotion, the cost of which varies depending on your marketing strategy.

To better understand the SaaS product development cost, we’ve selected several top SaaS market leaders as examples.

Zoom is a cloud-based video conferencing application that provides an easy and high-quality online communication experience. It has quickly become one of the most popular video conferencing apps due to its ease of use, reliability, and affordability.

Zoom’s core features include the following:

• Screen sharing
• Whiteboard collaboration
• HQ audio and video
• Chat functionality, etc.

Starting from the MVP, Zoom successfully created a user-friendly platform that revolutionized remote communication, leading to its widespread adoption as the go-to solution for virtual meetings. The average cost to build Zoom's MVP was around $250,000.

Zendesk is a customer service and support platform that enables businesses to manage customer interactions and support tickets. It is used by organizations in various industries, including technology, healthcare, retail, financial services, and more.

Zendesk was built with the following must-have features:

• Ticketing system
• Customer engagement tools
• Analytics and reporting
• Knowledge base
• Live chat

Zendesk's MVP improved customer service and support efficiency, increasing customer satisfaction. Its MVP SaaS application cost was around $300,000 to build.

Slack is a cloud-based team collaboration tool that enables users to communicate with each other in real-time. This tool allows teams to be more efficient and organized by providing an intuitive user interface for message management.

The core features they’ve implemented in Slack are:

• Text, video, and voice calls
• Notifications by e-mail and in-app
• Reminders
• File sharing
• Chat privatization

Slack's MVP improved teams’ productivity by providing a centralized platform for collaboration, reducing email overload. This SaaS app development cost is around $1.5 million.

Shopify is a powerful ecommerce platform that makes it easy for businesses of all sizes to create and manage their online stores. The company offers various plans, from entry-level Lite plans to advanced Pro plans so that companies can find the perfect fit for their needs.

Shopify’s basic features contained:

• Order fulfillment instruments
• Secure payment processing
• Product management
• Customizable website templates, etc.

Shopify's MVP helped entrepreneurs and small businesses establish an online presence, driving e-commerce growth and enabling seamless online shopping. So, cost of developing a SaaS platform MVP for Shopify was equal to about $500,000.

Now that we've looked at the factors that affect the cost of SaaS development, it's time to finalize the calculations. So, what is the total cost of developing a SaaS product?

Let’s consider developing an MVP of your SaaS product in partnership with an IT outsourcing agency in the CEE region, where the average hourly rate is between $40 and $80. Typically, the development process takes 3 to 6 months with a team of 3 to 5 specialists. In this scenario, the estimated SaaS development cost will be between $50,000 to $500,000+.

SaaS development can be complex and expensive, requiring careful planning, budgeting, and execution. However, taking a strategic approach and working with a trusted development partner can reduce risks and lower SaaS app development cost while achieving a successful outcome.

Here's a breakdown of SaaS building strategies to optimize and minimize the cost of starting your SaaS application development:

• Conduct thorough market research to identify essential features and prioritize development efforts to avoid hidden costs of SaaS projects.
• Utilize agile development methodologies to streamline the development process and minimize unnecessary expenses.
• Consider outsourcing specific tasks or components to regions with lower labor costs without compromising quality.
• Invest in scalable infrastructure and architecture to accommodate future growth without additional costs.
• Employ QA practices to detect and resolve issues early, reducing the need for costly rework later.
• Leverage open-source technologies and frameworks to reduce licensing fees and SaaS implementation costs.
• Negotiate flexible payment terms with software vendors to manage cash flow effectively and reduce upfront costs.

Let us tell you more about Cleveroad. We are an outsourcing software development company, with 12+ years of experience in delivering software, including SaaS solutions of any complexity to our clients — startup businesses, mid-size enterprises, and large companies from different business domains, such as Logistics, Healthcare, Ecommerce, FinTech, Education, and so on.

Working with us, you are ensured with a range of benefits:

• Hands-on experience in developing diverse SaaS solutions like CRM, Enterprise Resource Planning (ERP) Software, SaaS e-commerce solutions, Learning Management Systems, etc.
• Partnership with a software vendor with high level of expertise and proficiency in cloud services underscored by attainment of the AWS Select Tier Partner status within the AWS Partner Network
• Cooperation with AWS-certified software experts skilled in developing SaaS digital solutions
• Flexible collaboration models that can be chosen according to your business peculiarities: Dedicated Team, Time and Material, Staff Augmentation, Fixed Workscope
• A team of agile-minded IT professionals with expertise in dealing with cloud services, such as Google Cloud, AWS, or Aure
• Access to ISO 9001-certified quality management expertise to ensure compliance with software quality requirements
• ISO 27001 certified security management based on proven policies and processes to ensure robust data protection

We’d like to share with you some examples of our successfully delivered SaaS projects.

Our client was Prime Path Medtech, a well-known medical device manufacturer. They already had a cloud-based solution for their business; however, it was inflexible, non-customizable, and ineffective.We transformed the outdated QMS with a new automated system. We also integrated the new Quality Management System with the customer's quality control services, providing software compliance with FDA and ISO requirements.

As a result, the client received a new QSuite system that allowed the company to cut costs for B2B SaaS use by 20% for their end users. Moreover, the built system complies with the FDA 21 CFR 820, 21 CRF 11, ISO 13485:2016, and MDSAP regulations for medical device manufacturing.

• Explore our Quality Management System case in detail

Here's our client's opinion about their successful cooperation with Cleveroad:

Our client, a US-based eCommerce company, needed a SaaS solution for offering a set of tools for a retailer to streamline their business procedures. Our team created a SaaS-based RetailOps system to help retailers manage their sales operations, including tools for Warehouse Management, Inventory Management, and Receiving.

As a result, our client got a robust SaaS retail system that allowed the company to digitize workflows and reduce paperwork. Moreover, they could attract more new clients through their mobile app and offer them company services at any required time.

• Explore our RetailOps case in detail

Our client, a prominent US consulting and technology services company specializing in the financial sector, sought a SaaS web-based platform that was quite complex and unable to be created with the resources of the internal team. We created a minimum viable product for a SaaS platform that provides for using all applications as standalone solutions or as part of a common platform of integrated apps. We also ensured the platform complies with MiFID II rules to help the client consult their EU clients.

As an outcome, our customer got the robust and secure Broker research platform, enabling efficient tracking, initiation of official feedback loops, and assessment of valuable and affordable brokerage services. Moreover, the client can offer their services to the target audience on legal grounds.

• Explore our Broker research platform case in detail