Software as a service (SaaS) is one of the most rapidly growing part of the cloud market and the IT industry.
The technology is expected to reach $185,8 billion market size by 2024. Due to rapid growth, market demands are also increasing.
That is why many companies are looking for SaaS development outsourcing partners in order to reduce the size of their applications and device memory required for them. This article will present 4 reasons why you should consider outsourcing your SaaS development. With every development come challenges - as we wrote in top 5 SaaS Development challenges. What is more, SaaS is also frequently associated with the amount of time and resources needed to design and develop a product.
Not every company has the means to use their in-house staff or wants to go through the hustle of hiring new people. This is where SaaS outsourcing comes in.
Benefits of Outsourcing SaaS Development
1. SaaS Outsourcing Helps Save Time and Reduce Costs
Outsourcing the development of Software as a Service (SaaS) applications is a strategic move for many startups and established companies alike. This approach offers significant advantages in terms of time and cost savings, which are crucial for businesses operating with limited budgets and high ambitions.
TIME SAVINGS
- Rapid MVP Development: By outsourcing, companies can leverage the expertise of a dedicated team that specializes in SaaS development. These teams are well-versed in the latest technologies and methodologies, enabling them to create a Minimum Viable Product (MVP) swiftly. This quick turnaround is vital for testing market viability and getting early feedback.
- Focus on Core Business: Outsourcing allows businesses to focus on their core operations without being bogged down by the complexities of software development. The outsourced team manages the entire development lifecycle, from initial design to deployment and maintenance. This delegation frees up valuable time for the in-house team to concentrate on strategic initiatives and customer engagement.
- Accelerated Time to Market: Experienced development teams use agile methodologies and have established workflows that streamline the development process. This efficiency translates to faster time to market, giving companies a competitive edge and the ability to capitalize on market opportunities promptly.
COST REDUCTION
- Lower Development Costs: Outsourcing often proves to be more cost-effective than maintaining an in-house development team. It eliminates the need for significant investments in recruitment, training, and infrastructure. Companies can access top-tier talent without the overhead costs associated with full-time employees.
- Scalable Resources: Outsourced teams offer flexibility in scaling resources up or down based on project needs. This scalability ensures that businesses only pay for what they need, avoiding the financial burden of idle resources during slower periods.
- Reduced Risk: Outsourcing partners typically have extensive experience and a portfolio of successful projects, reducing the risk of project failure. Their expertise ensures that the product is built correctly the first time, minimizing costly revisions and delays.
- Access to Advanced Technologies: Outsourcing firms often have access to cutting-edge tools and technologies. By partnering with these firms, companies can leverage advanced solutions without the need for significant upfront investments, further driving down costs.
Companies That Have Decided to Outsource SaaS
- Slack
A great example of a SaaS company that decided to work with an outsourcing partner is Slack - a cloud-based instant messaging platform. Outsourcing allowed them to quickly deliver an MVP. The strategy turned out to be an amazing success as Slack is used by many companies from all around the world.
- AppSumo
Here, we can also mention AppSumo - a service sharing deals on high-price software, online courses, and so on, on a daily basis. This $2 million company recognized the benefit of outsourcing and made use of a remote developer for PayPal integration. To this day, AppSumo relies on outsourcing in many areas and projects while managing over 700k subscribers.
- Expensify
We cannot forget about Expensify - a tool created to help people store receipts, transactions and manage expenses more easily.
Expensify contacted an outsourcing international software development house to deal with the back-end while they focused solely on the front-end and business operations. Now, Expensify has over 2 million users and hires over 130 employees.
2. Leverage Experience of Specialized SaaS Development Outsourcing Partner
Outsourcing gives you access to many partners with a wide network of experienced software engineers. Their efficiency and diversity provide you with masters of UX/UI design, testing, mobile experts, etc.
Leveraging an outsourcing SaaS development team means gaining access to implementation specialists that know how to manage product data and product lifecycle. Those specialists will ensure that your system is well-designed, properly set up and configured accordingly to your needs. You will avoid any instability, boost productivity and find your PLM strategy.
Outsourcing teams are specialized in various fields and have experience in dealing with the toughest challenges. They are trained to handle advanced tasks, which will:
- accelerate the development,
- increasing value,
- ensuring swift adoption of new technologies no matter the size of your business.
An outsourced team of experts can manage a variety of products thanks to their flexibility and access to different specialists. They give you the ability to customize out-of-the-box solutions to fit your precise needs and requirements. The right team will help you solve your problems, provide guidance and support. Those years of experience in the field allows you to learn from the best of the best.
Choosing to outsource over hiring in-house gives you an already coordinated team that works well together.
3. Outsourcing allows more flexibility and scaling quickly
SaaS companies, in particular, have to be flexible and able to scale quickly at a given time. Continuous growth and the need to stay up-to-date with the latest features is a necessity if you want to meet the market demands and compete with other companies.
- But what to do with the people you hired when your product finally hits the market and you need to scale your team down?
With outsourcing, there is no such problem. A remote team gives you the freedom to expand or decrease developers’ velocity accordingly. An IT software outsourcing company gives you access to a wide range of services like product development, UX/UI, maintenance or technical support with analysis. What is more, you gain a team of developers on different skill levels, which means you can mix and match as your heart desires to find what suits you best.
- Worries about quality and security?
SaaS outsourcing vendor takes full responsibility for the final product’s quality and confidentiality. Agility allows extreme flexibility to make changes and change the direction of the project mid-development. You can also be sure that in case of an emergency an unavailable developer will be immediately replaced, which means no development standstills.
Tech stack and solution flexibility are also what makes an outsourced team a better option than hiring locally or trying to put together a team of freelancers.
4. Outsourcing provides affordable talent
As mentioned above, outsourcing gives you access to specialists in every time zone. International team means international hourly rates, which are often lower than those of local service providers.
Generally speaking, we can distinguish 4 major groups of development consultancy companies, taking into consideration projects price range and hourly rates. The biggest one of them - the Enterprise class - will be skipped here:
- Big Business class
- their employee number varies between 100 up to 1000 and their offices are usually located in more than one city/country. Here, you can expect $200 - $300 hourly rate and $125,000 - $5,000,000+ project range. Unfortunately, not everybody can afford this type of development.
- Mid-market class
- they consist of 10 to 100 employees and usually serve small or medium-sized businesses. Their rate varies from $125 to $175 per hour and the general project size from $50,000 to $5,000,000. Mid-market development companies are a great choice for businesses on a budget and those looking for a good quality-cost balance. Always remember to do a throughout research of them as some will be better, with more experience, than others.
- Small class
- a small number of employees (2 - 10) and low expenses. Hourly rates range from $75 to $175 and the project size from $10,000 to $500,000. They are often specialized in one field of development like front-end, UX/UI or specific programming languages like Ruby on Rails, React, Node.js. Because of their size, they are often booked months in advance.
We can also divide outsourcing further into nearshoring and offshoring. Nearshore outsourcing works like offshore outsourcing, but you are working with people in the same or similar timezone. Thanks to that communication and onsite visits can be easier. Nearshore outsourcing gives you cost savings while maintaining the cultural similarities of partners.
On the other hand, offshore outsourcing can promise even more competitive hourly rates. What is more, the timezone differences can work as an advantage allowing a consistent development even when you are not working. This is a great option for companies looking for a mixed model of development: having an in-house team while outsourcing other tasks.
Summary
Outsourcing your SaaS development introduces many opportunities and advantages. Many popular SaaS products were developed by expert teams from all over the world. Outsourcing saves time and money, provides affordable talent and flexibility of scaling with specialized service providers.
To find out more about SaaS development, read our blog posts on how to successfully scale your SaaS Development and how to design a SaaS application.
