Wondering how much will it cost to build a SaaS app? Check out the most recent findings!
It's no secret that cloud computing has revolutionized how businesses operate these days. Any company today can basically rent out computing power alongside software and platform solutions. Anything you need can be provided via the cloud (the Internet).
The most popular example is SaaS (Software as a Service). SaaS allows any company to either choose any existing software solution or create a custom solution tailored to their specific needs. Opting for an existing solution means you can use the software anytime you wish and on any device for as long as you're paying a subscription fee.
According to a report, the global SaaS market is expected to grow from $130.69 billion in 2021 to $716.52 billion in 2028 at a CAGR of 27.5% during the forecast period.
SaaS businesses can create custom apps for their clients that will be used in-house or further sold to the client's customers. The point, in fact, is that you create pretty much anything you need these days.
However, businesses that opt for such solutions often wonder how much does it cost to create an app for your business? Let's find out, shall we? But before we delve any deeper into the costs, let's see what a SaaS app is, and why SaaS is so popular right now. But before we delve any deeper into the costs, let's see what a SaaS app is, and why SaaS is so popular right now.
These apps are usually browser-based, so there's no need to download or install the software. Everything is configured and ready for use.
The end-users pay a monthly or a yearly subscription fee to use the software. Companies that decide to develop apps based on the cloud model do so to provide convenience for their customers or themselves, depending on who will be using the app.
Let’s consider a popular product that transitioned in 2012 from an on-premise software delivery model to the SaaS model - Adobe Photoshop. Adobe Photoshop and its countless other programs were sold to consumers for a one-time price. Once the consumer paid, they were given a key to indefinitely access a certain version of Photoshop.
But now instead of paying a high up-front cost for a one-time product license, Adobe customers must sign up for a monthly subscription to Adobe Creative Cloud.
For instance, the Photography plan that includes access to Photoshop and Lightroom starts at $9.99 a month, while the last version of Photoshop available with a lifetime license starts at $700.
Such subscription models are affordable for many different demographics, including students. Also, a monthly subscription can be canceled at any time.
To give you a rough estimate, the average cost of app development for SaaS business typically ranges from $50,000 - $150000. However, various factors contribute to these numbers -
Let’s analyze each of these factors separately for deep insight into the intricacies of each.
Complexity can be a combination of various functionalities, user roles, or a degree of difficulty faced by developers. For instance, SaaS apps designed for the healthcare domain with multiple integrations and functionalities have a higher complexity than one performing a basic task with a single feature.
However, there are SaaS platforms that offer a single purpose but are highly complex. For instance, Grammarly helps users with basic spell check and basic editing, but at the backend, AI and big data analysis play an important role in helping the software achieve its aim.
Therefore, complexity is a relative term you can’t define properly. However, you can say that higher complexity means more developing hours, leading to higher costs of app development for SaaS business. Based on this, we can divide SaaS applications into four categories -
|Complexity||Average price (approx.)|
|Micro SaaS||$10,000 - $15,000|
|Basic SaaS||$30,000 - $35,000|
|Average SaaS||$45,000 - $60,000|
|Complex SaaS||$140,000 - $150,000|
Another factor that affects the cost of SaaS app development is the type of software or app developed. Some SaaS apps are difficult to build and require more effort, while others have basic features that developers can build within a limited time frame.
So, based on the types of SaaS solutions, the cost calculations are listed below -
|Type of SaaS solution||Avg. price of MVP||Example|
|CRM||$50,000 - $60,000||Freshworks|
|Email marketing||$60,000 - $70,000||Mailchimp|
|Project Management||$60,000 - $70,000||Confluence|
|Accounting||$70,000 - $80,000||Quickbooks|
|ERP||$100,000 - $120,000||Netsuite|
The most important factor in determining the cost of creating an app is the scope of the project. For example, the costs of building a simple tool that will address an issue or two largely differ from developing a platform with a wide variety of features.
In other words, how much does an app cost depends on what do you want to build? This ultimately determines the SaaS application cost. The larger the project, the more resources it will require. This rule applies to any project, not just SaaS apps. That's why it's of vital importance to determine your needs before setting up a budget for the project.
Another factor that impacts the custom app development cost is to who you outsource the development. Some companies choose to outsource this task to freelancers, while others opt for development companies. So, what's the difference? Freelancers are usually cheaper and there are fewer strings attached.
On the other hand, mobile app development companies offer a variety of services for a fixed but slightly higher price. So, freelancers are a more budget-friendly option, but development companies offer more features, such as tech support, updates, fixes, patches, etc. Basically, it comes down to what you can afford and how much room for maneuver you have in your budget.
The location of your app development company also plays an important role in determining the overall cost of development for your SaaS app. The price varies across regions and continents significantly. For instance, the cost of development in areas like Ukraine is comparatively less as compared to UK or US.
Let’s take a look at the breakdown of development rate across different geographical regions -
|Location||Avg. cost (approx.)|
|USA||$170,000 - $180,000|
|UK||$130,00 - $150,000|
|South Asia||$45,000 - $50,000|
|Eastern Europe||$60,000 - $70,000|
|Western Europe||$80,000 - $1,00,000|
|Australia||$100,000 - $120,000|
Every app needs a good design. Otherwise, no one will use it. If the design is right, then more people will enjoy using your app. However, that means additional SaaS development costs because app design is a separate matter on its own. As you may already know, the more complex the design, the more difficult it is to bring it to life, and hence the cost of creating an app is more.
You also need to keep in mind that app design with great visuals will cost more to develop, so make sure your budget is capable of supporting a truly awesome app design, to begin with.
Generally, building a good UI/UX design takes around 2 to 3 weeks, and the average hourly rate is between $25 - $45, costing roughly $3000 - $5500.
Every feature you want to add increases the overall costs. One or two additional features may not affect the price that much, but if you're going to add more features, it will prolong the development process and, therefore, increase the costs.
Therefore, it’s advisable to focus on developing an MVP. An MVP includes enough features to attract early-adopter customers and get their feedback as quickly as possible. This would also help you save time and money. Once you get customer validation, you can create a full-fledged application.
For instance, a simple scheduling app with a calendar feature may not cost much. However, if you want that app to be available across multiple platforms and devices, that's a whole different story. The more complex the app is, the more it will cost to develop it because you have to do it right and that takes both the time and resources into account.
Here is the list of basic features that any SaaS app must have -
Let’s now shed some light on the most common hidden costs of SaaS mobile app development projects. Understanding these factors will reduce risks along with saving time and money. So, without further ado, let’s dive into each of them in detail!
Usually, support and maintenance cost is about 25% of the software development cost. For instance, if the cost of developing your SaaS application is $100,000, then your maintenance cost can be as high as $25,000 per year.
Your maintenance cost will include spending on -
This cost is important to consider to keep your platform running smoothly and provide a quick fix if an error or bugs occur.
When building a SaaS app, it becomes crucial to spend money on marketing in order to attract customers and gain visibility among the target market. In general, the marketing expenses are two to three times of app development costs.
The marketing costs include several important aspects like email marketing, SEO, social media marketing, content marketing, etc. However, without promoting your products in front of the target audience, it becomes difficult to become successful when technology is constantly evolving. Though marketing involves a lot of money, it will help you gain visibility, reach, and higher revenue.
When building an app, it’s prudent to keep in mind the app store requirements. When publishing an Android App on Play Store, you are required to pay a one-time fee of $25. Apple, on the other hand, charges $99 per year.
If you are looking to distribute your app exclusively within your organization, you will be charged $299 a year to join the Apple Developer Enterprise Program and provide your app via the App Store. Google Play doesn’t charge the service.
There are several successful SaaS products in the market like Uber, Twitter, Slack, Mailchimp, etc. If you want to develop a product that provides similar services, you must know how much it costs. This would help you plan better.
Here are the costs of building some successful SaaS products along with their feature list:
|App name||Feature list||Average price of MVP (approx.)|
|Mailchimp|| ||$80,000 - $100,000|
| ||$60,000 - $100,000|
|Slack|| ||$65,000 - $90,000|
| ||$40,000 - $60,000|
|Zomato|| ||$25,000 - $40,000|
I hope this article has perfectly answered your question - how much does it cost to create an app for your business? Developing a SaaS app is a complex process that requires a lot of time, effort, and dedication. It's only natural that the development of such apps will be an expensive endeavor. However, the price will drastically vary depending on your choices and needs.
It’s time to start working. You’ve got a lot ahead of you – and it’s probably a little daunting. If you have a great app idea, then we have sorted some of the top app development companies around the world to help you get started with custom app development for your SaaS-based business.
Aparna is a growth specialist with handsful knowledge in business development. She values marketing as key a driver for sales, keeping up with the latest in the Mobile App industry. Her getting things done attitude makes her a magnet for the trickiest of tasks. In free times, which are few and far between, you can catch up with her at a game of Fussball.
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