SaaS Development Challenges and How You Can Overcome Them

15-Second Summary: Although not all SaaS projects have the same pain points, a lot of them run into similar hurdles that originate from the same causes. So, before you take the leap, it's crucial to know what you’re up against. This blog addresses that very note by shedding light on the most critical SaaS development challenges. Read ahead!

What if leaders, developers, and executives from a pioneering SaaS company could give advice and share real-world insights with you?

Well, it’s happening in this article.

For 25+ years, we’ve witnessed the SaaS evolution from a short-lived trend to a 232-billion-dollar industry. So, we’ve asked our experts to share the most pressing SaaS development challenges that they’ve faced along their journey.

The result is this piece of content stacked with all the hard tasks and hidden problems Software as a Service professionals might face while building and maintaining their assets.

We’ve also shared one of our flagship products and signature projects on SaaS development services where we transformed challenges into opportunities.

Real talk, no filler, no sales pitches.

Just 9+ common challenges (and tips to overcome them) shared by industry experts exclusively for fellow SaaS enthusiasts.

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Is SaaS Development Really Challenging?

If you’re thinking about how difficult SaaS development is, the answer is a bit tricky.

In all probability, it’s doable but there’s a great deal to learn – not only how to create a product or understand its value proposition, but also about the inevitable challenges that come with it.

For example, here are the most critical ones, as per BetterCloud’s latest SaaSOps report:

Moreover, the greatest concern of organizations is securing SaaS products. The major concerning areas as stated by survey respondents are:

• Enterprises are using more SaaS applications than ever, but the growth rate has been slow, from 38% to 18%.
• There are 65% unsanctioned SaaS apps. This phenomenon is shadow IT where users run apps without IT teams knowing about it.
• 50% or more of the revenue goes to sales and marketing. It's the highest expense for SaaS providers.
• Every organization now has 7.6 duplicate apps and 4.3 orphaned apps.
• Only 18% of teams regularly monitor SaaS environments and check on data leaks. That's because it’s a complex task to pull off.
• It can take up to 7.12 hours to offboard staff from all SaaS resources across an organization.

Top SaaS Development Challenges You Should Prepare for

Face the fact - the Software as a Service industry is at a crossroads where organizations are finding themselves in the thick of two massive waves.

“On one hand, SaaS providers are gaining major traction because software on the cloud is the engine that runs almost every business now,” explains Pratik Mistry, EVP at Radixweb. “On the other hand, the market is concurrently undergoing a huge correction.”

So, while we’re facing a shortage of skilled professionals all around the world, the demand for SaaS solutions isn't slowing down anytime soon.

As a result, companies are at the center of the biggest SaaS problems, from security to integration.

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Make the Plunge

Take a look at what’s keeping SaaS leaders and developers up at night:

1. Misconfigurations

At least 43% of companies have dealt with one or more security incidents due to SaaS misconfigurations.

The reasons are a lack of visibility into security setting updates, security setting access to many departments, and a deficit in security knowledge.

Enterprises now work with multiple apps, each having its own configuration and settings. When you can’t set them up properly, you’ll expose them to security vulnerabilities, just as NASA disclosed their private employee data in 2019 by misconfiguring Jira.

How to Fly Past It

Automation is the ultimate solution to this SaaS challenge. Especially, SSPM (SaaS Security Posture Management) tools can help teams quickly identify and fix misconfigurations.

2. NPD (New Product Development) Cost Hike

With inflation and rising costs, C-suite leaders find little to no room for resource-saving or offering competitive prices.

The cost to build a SaaS application is all-time high despite the rise of no-code tools. However, maintaining legacy products and paying off technical debt can be challenging.

With lengthy hiring processes and soaring tech salaries, recruiting skilled developers has become increasingly difficult, especially in countries with robust IT markets.

How to Fly Past It

Focus on increasing Average Revenue Per User (ARPU) and retaining existing customers. Bootstrapped companies relying on client cash flow must prioritize Net Dollar Retention.

3. Integrating Third-Party Services

It's a global-scale concern for SaaS developers.

Integration is not easy for a number of reasons like lack of skills, complex technical requirements, compatibility issues, dependency risks, etc. However, users must have access to various third-party services, such as payment gateways, social media platforms, cloud storage providers, etc.

This dire need makes it an urgent challenge as SaaS products must provide the conveniences users are looking for.

How to Fly Past It

It's simple – get your hands on it or consult with an experienced application integration team that can get the job done.

4. Database Modeling

Designing an efficient and scalable database schema can be complex, especially when enterprises deal with diverse data types, complex workflows, and high volumes of data.

Poor database design can lead to inefficient data storage, performance bottlenecks, data inconsistency, and scalability issues.

How to Fly Past It

Developers have to make informed decisions, such as choosing between relational (SQL) and non-relational (NoSQL) databases based on the specific use case, normalizing the database schema to minimize redundancy, optimizing queries and indexes for efficient data retrieval, etc.

5. User Authentication and Authorization

Identity of access management (IAM) can be a real challenge for a number of reasons, mostly because SaaS apps have a diverse user base with varying roles, permissions, and access levels.

On top of this, companies face password vulnerabilities, multiple log-in devices, cross-platform compatibility, and so on.

How to Fly Past It

Implementing industry-standard authorization protocols, such as OpenID Connect (OIDC), OAuth, and Security Assertion Markup Language (SAML) is the most efficient way to address this issue.

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6. Sales and Marketing

Over the last seven years, the SaaS industry has grown by over 500%. There are almost 35K SaaS products available in the market.

Naturally, the competition is pretty cut-throat.

Other factors contributing to this crisis are market saturation, high churn rates, subpar UX, outdated support, boring UI, and so on.

Hence, if you don’t take a special approach to sales and marketing efforts, chances are you’re going to get lost in the crowd.

How to Fly Past It

Instead of marketing the service, learn how to service the market. Bring your USP to the audience and address their pain points that others haven't yet. The rest of the pieces will fall into place.

7. Multitenant Architecture

Designing an efficient and scalable SaaS architecture that supports several tenants at the same time is another challenge.

That's because it requires hands-on expertise in specialized tasks like data isolation, resource optimization, caching, vertical and horizontal scaling, etc.

All in one, it’s a complex task to create a multitenant architecture that has a fine balance between the needs of individual tenants and the efficiency of shared resources.

How to Fly Past It

There's a set of tried-and-tested techniques that can help you optimize a multitenant architecture, such as customization per tenant, containerization for process isolation, and tenant-specific database schema.

8. Pricing and Monetization Models

Setting the price for SaaS products is a tricky business. Too high, it can scare away potential customers. Too low, it might fail to capture the true product value.

Some of the most common monetization models are subscription, usage-based, tiered, and freemium, each with its benefits and downsides.

For example, Meanlime offers its core product for free while giving paid upgrades to premium features.

How to Fly Past It

This one is simple – understand your customer segments, competitor pricing, cost and profit margins, and market position. It's a delicate business to have the right mix of customer affordability and business profitability.

9. Zero Downtime Deployment

100% uptime is possible, in theory. Customers depend on your product, and it should be available 24x7.

However, no one can build an entirely foolproof system, as we discussed in our Benefits of SaaS Apps in Your Business blog. Bugs, technical failures, server crashes, etc. will come up and teams might take seconds, minutes, or even hours to fix them.

In short, ensuring zero downtime of your SaaS app is almost next to impossible.

How to Fly Past It

Regularly monitor data, enable real-time backup, implement high-end security measures and ransomware protection, and create a responsive support and maintenance team.

While our SaaS masters have covered the most critical challenges, let’s not sleep on the rest.

Here's a quick rundown of a few more SaaS development challenges to keep an eye on:

• Cross-browser and cross-platform compatibility
• Technical debt
• Legal and compliance requirements
• Performance optimizing
• CI/CD pipeline setup
• Scaling capacities
• Spaghetti code

How We Defined SaaS Challenges and Delivered Impactful Results

Since our inception in 2000, we’ve had our fair share of trial and error with SaaS.

However, it’s through those experiences that we discovered the hurdles, learned our lessons (we still are), refined our processes and skills, and ultimately achieved substantial results.

For instance, when we modernized an online education platform into a SaaS mobile app, the challenges were:

• Data integrity during migration
• Smooth system transition without any downtime
• Infrastructure scaling without compromising performance

How did we deal with them?

We implemented:

• A microservices architecture
• Efficient data management techniques
• Auto-scaling capabilities

We did a similar project with an HR agency – Building and Maintaining Two SaaS Apps for over 10 Years. Take a look.

Not but not least, we’ve learned a lot while conceptualizing, building, and launching our very own SaaS product – OnPrintShop

Having a market-leading product means we’re active in the SaaS vertical. This exposure to diverse fields has helped us gain an in-depth understanding of industry dynamics.

Consequently, we’re able to identify challenging areas, iterate on our strategies, and stay vigilant.

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What if You Don’t Have to Deal with Any Challenges?The cost of dodging the bound-to-happen SaaS challenges is too high. Under the current circumstances, it’s no longer reasonable to assume that problems will occur since “nothing is perfect.”A calm and composed approach based on thoughtful analysis and planning lays the groundwork for SaaS development success.Sure, you’ll face some challenges, but you can definitely quash them by working with a seasoned SaaS development company.Speaking of that, you probably have an idea about our expertise if you had a look at our projects and products mentioned right above.But it's okay if you haven't.To give you a heads up, we have an average of 7+ years of client tenure for SaaS products, invested 500K+ man-hours of work in a single SaaS project, and successfully generated 60%+ revenue from our SaaS solutions.Get in touch if you want to explore more about how we can help with your SaaS vision. It'll be challenging but you’ll barely feel the impact!