Software as a service or SaaS is a means of delivering applications over the internet—as a service. Rather than installing and maintaining software, you only access it via the internet, relieving yourself of the burden of managing complex software and hardware. Saas is delivered on a subscription basis and is centrally hosted.

SaaS examples include BigCommerce, Google Apps, Salesforce, Dropbox, MailChimp, ZenDesk, DocuSign, Slack, Hubspot.

A SaaS development company creates, builds, and maintains SaaS solutions for startups and enterprises considering hosting applications over their servers to provide them to customers via the internet.  

Typically, Saas product developers focus on creating solutions using web-based technologies like HTML, Javascript, CSS, Python, PHP, and Ruby while including relevant frameworks.

• Churn; The two types of churn you have to consider are customer churn and revenue churn. Customer churn measures the number of customers you have or accounts leaving your service per month. In contrast, revenue churn measures the amount of revenue paid by customers leaving your service each month as a percentage of overall revenue.

• Activation rate: is the most critical Saas metric of them all. It combines user journey mapping, user interviews, and behavioral analytics to discover which in-product actions correlate to long-term success and retention.

• MRR(Monthly recurring revenue) / ARR( Annual recurring revenue): MRR is the measurement of how much revenue your customers are generating every month, while ARR is what makes your SaaS business model appealing. The more you provide value through your service, the more your customers keep paying you every month. 

• CAC( cost of acquiring a customer): CAC measures the amount you spend on marketing, sales, and other associated costs to acquire a new customer. CAC also relates closely to the lifetime value you gain from each new customer, so for a SaaS business to be feasible, you need to make more profit from your customers than it costs you to acquire them.

• Customer lifetime value (CLV or LTV): is the total revenue generated by a customer over the life period of their account. The longer a customer uses your service, the higher their lifetime value will be.

• Expansion revenue: covers increases in one-time payments or MRR when an existing customer upgrades to a more expensive package.

• Net Promoter Score (NPS): is the direct measurement of how much value your customers are gaining from your products. By measuring NPS, you can quickly find customer feedback to improve your product.

The cost of developing a SaaS product depends on whether you hire a developer or an agency. Other factors like time invested in developing the product also come into play.

Agencies or development companies cost more than hiring an individual developer, but this cost comes with additional benefits.

There are many types of SaaS software. The central aspect of division into groups is the sphere or industry that the SaaS product improves, such as online banking or communication.

• Project management software

• Enterprise Resource Planning (ERP) software

• Customer Relationship Management (CRM) software

• Accounting software

• CMS and e-commerce platforms

• HR/HRM solutions

• Communication platforms

• Payment gateways and billing solutions

• Billing and invoice software, collaborative software, web hosting software, and HR software are all examples of SaaS applications.

• Concur, Slack, Microsoft Office 365, Salesforce, and Dropbox are a few examples of prominent SaaS business tools.

The SaaS model is more like a subscription because the customer receives the service. The vendor takes over all the costs for developing, maintaining, and physically hosting the servers.

The administrator does not have to worry about software updates. SaaS vendors manage all the tedious tasks from sustaining hardware solidity to providing proper app functioning, while users simply open the apps in a browser.