How Much Does It Cost to Build a SaaS Platform?

Are you a startup founder, product leader, or serial entrepreneur wondering what it costs to build a SaaS platform?

If so, keep reading to learn:

• How much it costs to develop SaaS software
• Factors that influence SaaS dev costs
• Hidden expenses of building a SaaS
• Case studies on real SaaS platform costs

Now that you know what we’ll cover, let’s kick things off by looking at the SaaS development cost.

If you prefer visuals over text, feel free to jump ahead to the bonus infographic.

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What Does It Cost to Build a SaaS App?

The cost of developing a minimum viable product for a Software-as-a-Service startup should typically range from $60,000 to $150,000.

However, other factors determine the exact cost, among which include:

• The complexity of the solution
• The type of product
• The type of team involved
• The location of the developmental team

Let’s consider each of them separately for deep insight into their intricacies.

SaaS Development Costs Based on Complexity

SaaS platform complexity is a term to describe the set of functionalities, user roles, and how they relate to each other in your application.

You can also describe them as the level of difficulty a developer faces while building the SaaS.

While the term “complexity” is quite relative, we can categorize them into micro, basic, average, and complex for better understanding.

As you might have imagined, the more the complexity of a SaaS app, the more time needed to be expended in its development; this will, in turn, affect its cost.

Let’s help you with a spreadsheet of the estimated cost implication based on complexity:

Complexity	Average price, $
Micro SaaS	15,000
Basic SaaS	35,000
Average SaaS	60,000
Complex SaaS	150,000

The price stated above is not definite, as some hidden costs might pop up along with the cause of development. E.g., the cost of purchasing a domain name, integrating with APIs, etc.

Another defining cost factor is the product type. Let’s dive into detail.

SaaS App Development Costs Based on SaaS Type

Another important factor that influences the cost of building a SaaS app is the type of software.

Some SaaS projects are very difficult to build, mainly because they should have a high level of new features and the sensitivity of the data being handled.

Take, for example, accounting software.

It requires state-of-the-art data protection technologies to prevent sensitive financial information from leaking.

This singular feature increases the price of the site:

Type of SaaS	The average cost for an MVP, $	Example
CRM	60,000	Freshworks
ERP	120,000	NetSuite
Accounting	80,000	Xero and Quickbooks
Project management	70,000	Confluence
Email marketing	70,000	Mailchimp
MarTech	100,000	Hubspot
Visual website builder	150,000	Weblium

 

SaaS Software Development Costs Based on Team Type

Let’s dissect how the type of development team you opt for may affect the SaaS app development cost.

To illustrate, we’ll assume you’re building a software-as-a-service platform with average complexity.

Type of Team	Average cost, $
In-house, the US	140,000
The local development company, the US	180,000
Freelance	50,000
Outsource agency	80,000

Does each kind of team in the spreadsheet seem confusing? Let’s help you have a better understanding of what they entail.

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Type 1. In-House Team

This hiring model entails employing a team of developers to work within your startup’s environment.

These developers take orders directly from the company’s administrators and report daily to superiors within your startup.

Before you decide on choosing this option or not, you should first educate yourself on its pros and cons:

Pros

Cons

Startups have quick access to the development team and can suggest requisite modifications to be handled at a prompt. This hiring model keeps delicate development information and workflow within the startup’s premises. Through regular interfacing with the development team, the team will have a deeper understanding of the company’s goals. In-house developers tend to stick better to laid-out security protocols. The startup has full control over developmental workflow and has legal rights over employees’ deliverables – including source codes.

There’s a continuously high cost attached to adopting this business model. Employees are responsible for ensuring that management and labor laws are adhered to. There are multiple hidden costs in this hiring model that also depend on the hourly rate of developers. Use our outsourcing cost calculator to have a hang on those costs.

An alternative to this option is hiring a local development company. Let’s discuss the nitty-gritty of this.

Type 2. Local Development Company

This option can be pricey for startups domiciled in the UK, USA, Canada, and other high-income nations.

We’ll consider its pros and cons to understand your options better.

Pros	Cons
The developmental team and startups are not constrained by cultural and time zone differences. Also, a fallout between both parties can easily be pursued in court since both parties are within the same legal jurisdiction.	The cost of building a SaaS product with a local development team in high-income nations is exorbitant especially if you consider the hourly rate of developers. Countries affected by this include Canada, the UK, the USA, Japan, etc. If you’re a startup domiciled in those countries, you might need an unlimited budget to develop the SaaS MVP.

The cons of hiring a local development team are too significant for most startups to bear. As such, we’ll discuss another alternative – hiring freelancers.

Type 3. Freelancers

Freelancers are independent SaaS developers with experience in several tech stacks requisite for developing a fully functional Software-as-a-Service platform.

These individuals are not committed to working for any organization but only focus on getting contracts from numerous clients and executing them as occasion demands.

Just like other options on this list, they also have their pros and cons to consider.

Pros	Cons
Freelance SaaS developers have a deep understanding of creating a fully functional and effective Software-as-a-Service product. They can offer deep and unbiased insight into the product.	Control over developers’ workflow is practically impossible. They exhibit no loyalty to the task or startup and can easily change clients without prior notice if another client offers better pay.

The last and arguably the best option to consider is an outsourced team. What does this entail?

Type 4. Outsourced Team

Opting for an offshore outsourced team is a trendy pattern for startups based in high-income nations.

The crux of this model centers around seeking a SaaS development team in a nation different from the startup’s country of residence.

For example, a US-based startup hired a software development agency domiciled in Ukraine to help build a SaaS solution.

This option offers lots of advantages, with only a few cons that can be worked around:

Pros	Cons
Offshore outsourcing offers the best value for money. Provided the development team is situated in a region with requisite technological infrastructure. E.g., Eastern Europe. It eliminates the difficulty of managing a fully functional team. The team is easily scalable Offshore outsourcing agencies have a network of highly talented developers and can easily hire one to handle the task.	Communication can be hampered due to time zone constraints. Cultural differences may hinder workflow expectations. This is particularly common with development teams based in Africa and Southeast Asia.

Another cost-influencing factor for Software-as-a-Service projects is the team’s location.

Let’s delve into this a bit.

SaaS Development Cost Based on Location

The country where your team is domiciled is a huge factor in influencing the cost of Software-as-a-Service development.

For example, a typical SaaS business solution that costs $180,000 in the United States will cost $60,000 in Ukraine.

Below is a spreadsheet depicting the cost of developing your solution in some countries.

Country	Average cost, $
Australia	120,000
The USA	180,000
The UK	150,000
Western Europe	100,000
Eastern Europe	60,000
South Asia	45,000

We analyzed the most significant factors in the SaaS development price.

Now, let’s look at some examples.

Development Cost Examples for 3 SaaS Companies

To better understand the cost of owning your Software-as-a-Service platform, we’ll use three examples as case studies.

Case Study 1: Slack Clone Cost

Slack is a communication platform where individuals can hold workplace-related conversations.

The core features of Slack

• In-app and email notifications
• Text, voice and video calls
• Channel privatization
• Apps integration (this feature helps it connect with other services )
• Instant messaging
• Reminders
• Messaging channels

The average cost of developing a SaaS messaging app would range between $70,000 and $100,000. The exact price depends on your SaaS design and the level of detail you want therein.

Case Study 2: MailChimp Clone Cost

Mailchimp is an all-encompassing marketing platform that aims to sharpen online marketing practices effectively.

The platform empowers millions of customers to start, grow, and market their businesses through the use of advanced marketing technology.

The key features of Mailchimp

• Custom forms
• RSS-to-Email
• Email automation
• A/B testing
• Geolocation
• Email pipelines
• Email segmentation

The development cost of such an MVP will be around $80,000 – $100,000.

Case Study 3: Pipedrive Clone Cost

Pipedrive is a CRM platform tailored specifically to help users visualize their sales processes and maximize their leads.

Key Features of Pipedrive

• Salesforce automation
• Calendar
• Marketing automation
• Reporting & analytics
• Customer support
• Social media integration

As in the case study above, let’s imagine that you’d like to develop a new CRM. The cost of such an MVP will start at $60,000.

Now that you have an idea of the cost implication of developing a software-as-a-service let’s take a dig at some SaaS-specific cost-influencing factors.

Key Factors Influencing SaaS Dev Cost

Let’s discuss how software development teams calculate the cost of building a Software-as-a-Service application.

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1. Business Logic Complexity

The business logic is a compendium of the overall workings of the app, the purpose of creating the solution, and the outcomes users get from using the platform.

The business logic determines the following attributes:

• The complexity of the solution,
• The tech stack to use on frontend and backend,
• The number of external integrations,
• The number of team members,
• The size of the application, etc.

For example, you’d like to develop a new EHR. If you copy existing competitors, the development can cost up to $300,000.

Let’s discuss another SaaS-specific cost influencing factor to note.

2. Tech Architecture

The technological architecture of a SaaS product entails the arrangement and interaction of entities according to the business and technical requirements.

Attributes within the technological architecture that determine the app development process and cost are:

• Number of API integrations,
• Multi-tenancy,
• Scalability, and more.

 

Another factor affecting the cost of developing software as a Service is the UX/UI design. Let’s discuss that in detail.

3. UX/UI Design

User Experience and User Interface design determine all actionable basic features, functionalities, and pages that the application will have.

Thus, it directly influences both the developmental activities and business logic involved in development.

A complex SaaS UX/UI design will make the design process more cumbersome for the front-end developer and increase the cost of building the app.

Now that you know the factors that affect the cost of developing a SaaS product, let’s discuss a bit of hidden costs that most founders and startups ignore.

Hidden Expenses of SaaS Development

These are costs that aren’t glaring to founders in the early face of the project.

The two more prominent SaaS product development hidden costs must be added to your total cost of ownership:

Maintenance cost

Marketing cost

Let’s discuss what each entails in detail.

1. Maintenance

Usually, support is about 25% of the software development cost. If the cost of developing your software-as-a-service is $100,000, then your maintenance cost can be as high as $25,000 per year.

Your maintenance cost will include spending on:

• Hosting
• Domain name
• SSL certificate
• Email services
• Premium technical support

This cost is necessary to keep your platform running and provide a quick fix if an error occurs.

2. Marketing

Startup marketing is an important aspect of growing your user base and ensuring corporate goals are attained.

If your development cost is $100,000, then be ready to spend not less than $200,000 – $300,000 annually on marketing your product.

The annual cost of marketing is this high because of multiple financially demanding aspects that include:

• Information architecture,
• Technical, on-site, and off-site SEO,
• Email marketing,
• Product Hunt launches,
• PR and social media marketing, and more.

Now that you know the cost of creating a captivating and highly demanding Software-as-a-Service solution, let’s help you get started.

Want to Build Your Own SaaS?

There you have it – everything you need to know about the cost to develop your own SaaS platform.

As you saw, costs can vary widely based on features, team, and platform complexity. But with smart planning and an experienced development partner, you can launch an MVP for a reasonable budget.

If you want to turn your SaaS company idea into reality, the team at SpdLoad can help.

Our talented group of 70+ developers has over 10 years of expertise in building all types of digital solutions.

Want proof? Check out our portfolio and rave reviews on Clutch.

Contact us to schedule a free consultation and receive no-obligation estimates for design, development, and launch.

Here is a summary of our in-depth guide. Learn the basics about how much it costs to develop a SaaS application from scratch.

Bonus Infographics

Here is a summary of our in-depth guide. Learn the basics about how much it costs to develop a SaaS application from scratch.