Why Building A SaaS Application Is Expensive And Real Reasons Behind Its Cost?


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The cost of building a SaaS application is higher than any other application or website. It is a primary concern of any company that wishes to get an app developed for its business operations. The SaaS application development cost is approx one million dollars. There are various aspects that you as an application owner needs to decide to plan your SaaS app effectively. You can manage the expenses related to the development of your SaaS application by considering 5 important price-related factors before the development of your application.

The cost of your SaaS Product development services is based on the following factors, so have a look at them to manage your expenses in a smart way:-

1. Outsourcing

As per your business requirements, you can choose among onshore, offshore and nearshore outsourcing. These three are different kinds of outsourcing that are available and each one has its own advantages. You can choose one of them depending upon your requirements and the skills that you need in your app developers. The trainers contain a particular skill set depending on the location that they are trained at.

The offshore agency is advantageous for your project management if you look from the cost perspective. But at the same time, it is not that friendly if you look from some other aspects. For example, you cannot have a guaranteed legal recourse in case any problems arise in the middle of the app development. The time period within which you want your application, language-related barriers and the developer’s experience is the various concerns.

On the contrary, you might find the support, experience and best implementation practices in the nearshore and onshore developers. They, however, might be out of your budget. You can also choose another option where you go for a hybrid approach. It is a combination of offshore and onshore. A hybrid developer brings many benefits like the development of an app based on a global framework. They will put forward an advanced methodology for the smooth and effective management of clients, workers, and processes. This aids in the consistency of experience irrespective of the location difference between the stakeholders and the project team.

2. Budget

By deciding the ownership expenses you can decide the application budget. The total ownership expenses are calculated on the basis of updates, licensing, training / technical support and subscription cost. You should be sure enough that you would be able to manage the Total Cost of Ownership(TCO) after the first year as well. You have to consider the opportunity cost as you might not be able to spend that stack on the core competencies of your business. This is likely to be the case for every business organization that plans to put its money in advance for the software solutions.

The time duration for the development of your SaaS application might stretch from 6 months to a complete year and thus you must be able to have a realistic idea related to the expenses that you would need to manage monthly as well as for the longer term.

3. Features

Make a complete list distinguishing the must-have app features and the wishlist features. The cost of an application containing complex features is more than other simple applications. You can choose to mitigate the development cost by reducing some of the complexities provided that your chosen reductions do not cut the overall value of the app. Your application should be user-friendly at the end of the day. You can go for more robust software solutions if you wish to make an empowering application.

If you are going to launch your application on cross platforms then that would be more expensive than the one that is launched on one single platform. However, it has been evident that the cross-platform applications are subject to better success. You can attain Asp.net development services from a reputed company that is known to provide quality SaaS app development for years.

4. API Integration

Most of the SaaS applications contain backend functionality. You can decide whether you want these features to be developed using the API integration or from the very beginning. It is quite obvious that the cost of API integration is lesser than the cost of building the backend features from scratch. With API integration you can rapidly scale your business and it also reduces the time of development by cutting many steps in between. It is not a smart choice to reinvent the already existing SaaS app architecture. You do not make the best use of your budget while making such choices over API integration.

5. Overhead Cost

There is a variety of overhead costs related to SaaS app development. Let’s understand it in detail:-

No One-time Cost

Do not consider the app development cost as one time because it does not end once your app gets developed and gets ready for deployment. For example, deciding upon the medium of attracting the targeted users towards your application. You have to calculate the marketing and advertising costs. This is quite fundamental as a step. And it can be ongoing as well.

Legal Costs

There are federal, local and state laws that one needs to comply with and we need to pay the expenses related to compliance when the application is in its developmental process. There are some industries based on high regulations and you might need to pay additional charges to comply with those extra securities and privacy measures. Your SaaS application development provider must comply with the following acts as mentioned below:-
● ‘Do Not Call’ List
● Gramm-Leach Biley Act (GLB Act)
● Health Insurance Portability and Accountability Act( HIPPA)
● Can-Spam Act
● Sarbanes-Oxley Act (SOX)

Accounting Cost

With an increasing subscriber base, the bookkeeping cost grows as the volume of monthly transactions increases. You would also require assistance with the tax-related advice, financial statements preparations as well as auditing.

Final Words

In this article, we learned about the various major factors that affect the cost of SaaS app development and make it expensive. Although, you can consider the above aspects while choosing a Microsoft technology associate for your SaaS app development.

Amit Agrawal
As the Founder and COO at Cyber Infrastructure Inc, it is my aspiration to drive our global clients ahead in the competitive technology world by enabling them to receive huge financial and operational benefits in web development through my years of experience and extensive expertise as technology adviser and strategist. In my current position at CIS, I spearhead management of various technology initiatives, expansion of our technology capabilities, and delivery of quality excellence to our clients.


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