A quick reminder: Software as a service (SaaS) is one of software licensing and delivery models, along with Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). In SaaS, software is centrally hosted and licensed on a subscription basis, and users can access it with the help of web browsers.

Software as a Service (SaaS) market is projected to reach $ 85.1 billion by the end of 2019 and $ 113.1 billion by 2021. Scalable toolkits, flexible payments, flexibility, and automatic updates are just a few advantages of SaaS. If you are ready for web-based applications to become an essential part of your business, it’s time to find out what it takes to develop your own SaaS.

Why custom SaaS?

Salesforce, Microsoft Office 365, Amazon Web Services and Google Apps are just a few examples of the most well-known turnkey SaaS on the market. They are very popular across businesses for the ease of implementation. But standard solutions can address only common business requirements and enhance only the core operations of a particular company. Custom development allows to create applications that enhance the internal and external structure of businesses. Here’s how: by seizing full data control, making development and maintenance easier to manage and tailoring solutions to your unique business workflow.

SaaS architecture: horizontal or vertical?

There is a single version of an application with a single configuration which is installed on multiple machines to support scalability. Sometimes, developers create a second version of the app for testing purposes. It is offered to a selected group of customers before the release. Usually, each version of the application is based on a unique code. 

There are two main varieties of SaaS: horizontal and vertical.


This is a type of SaaS that focuses on a category of software, catering to a business need, for example, marketing or HR. The model tends to be more mature as it has been around on the market for over a decade. 

Horizontal SaaS aims to reach a range of industries, that’s why its marketing and sales strategies require considerable resources. If you choose this model, run advertising targeted to a particular type of companies to ensure potential customers that they can find something they relate to.


With the vertical model, software products are developed for a particular industry, for example, health testing or insurance. This SaaS model doesn’t aim to cover a broad product category, instead, it focuses narrowly on industry niches. Vertical SaaS obviously take a more narrow approach to marketing than the horizontal ones, which would tend to require fewer resources.

The cost of developing a SaaS

There’s no single price for every SaaS on the planet because the costs of massive apps like Google Drive differ from simple SaaS projects. However, all of them will need BA and design, server, monitoring software, development and support, and marketing.

BA and design. At this stage, you will define the scale of the project, functionality, and business strategy. Be ready to spend from $6,000 to $10,000.

Server. Cloud-based SaaS architecture involves extensive server usage for hosting. Bear in mind that this cost will increase because of the increase in the number of users. The initial cost might be from $30 per month and raise to $8,000 and more. 

Monitoring Software ensures your server and applications work correctly 24/7. The price will start from $3,000 if your apps are simple. For advanced applications, the price can rise to $50,000.

Development and Support include building prototypes, testing, gathering feedback from customers, bug fixing, and launching. The cost of it all starts from $15,000.

Marketing. We’ve already touched upon this topic in the vertical and horizontal SaaS section. It’s worth mentioning that both models will need inbound marketing (content making) and outbound marketing (advertising) strategies. This will cost you around $3,000 per month after launch.

For the finale

No doubt, custom cloud applications will become essential for businesses across industries. If you want to have a competitive advantage, make sure that the idea behind your SaaS app is well thought out and accompanied by business and market analysis.