A Detailed Guide on Outsourcing SaaS Development [Process + Tips]

SaaS development refers to building, deploying, and maintaining software applications delivered to users over the internet on a subscription basis. When building software solutions, organizations have to choose between in-house or outsourcing.

Organizations choose to outsource software development due to benefits like cost savings, focus on core operations, no headache of hiring and managing in-house teams, and ease of scaling resources when required.

According to a report by GrandViewResearch, the global IT outsourcing market size is estimated to reach USD 1,180.42 billion from USD 686.92 billion by 2030. This statistic showcases the growth rate of IT outsourcing services by a CAGR of 8.0%.

When you are looking to build a SaaS software solution for your business, you want a reliable and experienced SaaS software development partner.

This is why we have created this complete guide on outsourcing SaaS development and choosing the right partner.

So, first, let’s start with the reasons for outsourcing SaaS development.

Why Outsource SaaS Development Projects?

Go through the below reasons for outsourcing your SaaS project.

  1. No Headaches of Recruiting Team Members

    • Save the time, resources, and costs of recruiting top SaaS engineers for your project
    • Avoid the burden of managing and retaining in-house teams
    • Don’t need to invest in providing ongoing training, career development opportunities, and dealing with employee turnover
    • Avoid the post-hiring challenges of the software engineers if they lack certain that is important for your project development
  2. Access to Specialized Expertise

    • Dedicated SaaS development teams with expertise in multi-tenant architecture, scalability, cloud computing, and subscription management
    • Access to niche technology skills for integrating with third-party APIs, services, and cutting-edge frameworks like ReactJS, Angular, Node.js
    • Staying updated with the latest SaaS development trends, methodologies, and best practices from experienced vendors
  3. Saves Your Project Development Costs

    • Avoiding capital expenditure on infrastructure like powerful hardware, software licenses, and cloud resources
    • Reduced operational costs related to recruitment, employee benefits, office space, and training for an in-house SaaS development team
    • Access to a global talent pool of skilled SaaS developers from cost-competitive regions like Eastern Europe, Asia, and Latin America
  4. Scalability and Flexibility

    • Dynamic scaling of SaaS development resources based on project phases like initial development, testing, and ongoing maintenance
    • Flexible engagement models like project-based or dedicated team models tailored to project needs and budgets
    • Enabling continuous development and faster releases through outsourced teams, agile methodologies, and DevOps practices
  5. Faster Time-to-Market

    • Rapid ramp-up and acceleration of the SaaS development lifecycle from requirements gathering to deployment
    • Parallel development of multiple features and components through agile practices
    • Automated build, testing, and deployment processes via continuous integration and continuous deployment (CI/CD) pipelines

Let’s now learn about the process of outsourcing SaaS project development.

How to Outsource SaaS Development

Here is a detailed process that helps you to outsource SaaS development step by step. Finding the right SaaS software development outsourcing service provider requires a structured approach. Below is the detailed process for successful SaaS project development outsourcing.

  1. Prepare a Plan for Your SaaS Project Development Outsourcing

    • Define the business goals and objectives for your SaaS project.
    • Conduct basic market research and competitor analysis to identify opportunities and challenges for your SaaS product development.
    • Determine the target audience, user personas, and key performance indicators (KPIs) for measuring success.
  2. Define Detailed Requirements for Your SaaS Application

    • Collaborate with stakeholders to gather detailed requirements and specifications for the SaaS application.
    • Prioritize features and functionalities based on business value, user needs, and technical feasibility.
    • Create user stories, use cases, and wireframes to visualize the product and establish a shared understanding.
  3. Shortlist Vendors and Hire a Reliable SaaS Development Partner

    • Develop a detailed request for proposal (RFP) or request for quotation (RFQ) outlining project requirements.
    • Identify potential outsourcing partners through referrals, online platforms, or industry networks.
    • Evaluate vendors based on criteria such as technical expertise, industry experience, project management approach, communication skills, and cultural fit.
    • Conduct background checks, review portfolios, and seek client references to assess credibility and reliability.
  4. Contract Negotiation and Signing

    • Draft a detailed contract or service-level agreement (SLA) outlining project scope, deliverables, timelines, pricing, payment terms, and intellectual property rights.
    • Clarify roles and responsibilities, escalation procedures, change management processes, and confidentiality clauses.
    • Seek legal advice to ensure compliance with relevant laws, regulations, and industry standards.
  5. Project Initiation and Planning

    • Hold a kickoff meeting with key stakeholders from both parties to align on project objectives, expectations, and timelines.
    • Establish communication channels, project management tools, and reporting mechanisms.
    • Develop a detailed project plan, including milestones, timelines, resource allocation, and risk mitigation strategies.
    • Define project documentation standards, version control processes, and collaboration guidelines.
  6. Design and Prototyping of Your SaaS Project

    • Engage in collaborative design sessions to create wireframes, mockups, and interactive prototypes.
    • Incorporate user feedback and iterate on designs to ensure usability, accessibility, and brand consistency.
    • Finalize the user interface (UI) and user experience (UX) design based on best practices and design principles.
  7. Development and Implementation

    • Adopt an agile or iterative development approach to deliver incremental updates and maintain flexibility.
    • Assign development tasks to cross-functional teams comprising front-end developers, back-end developers, UI/UX designers, and quality assurance (QA) engineers.
    • Use version control systems and continuous integration/continuous deployment (CI/CD) pipelines to streamline development workflows and ensure code quality.
    • Conduct regular code reviews, unit testing, integration testing, and regression testing to validate functionality and prevent defects.
  8. Quality Assurance and Testing

    • Develop a comprehensive test plan covering functional testing, performance testing, security testing, compatibility testing, and user acceptance testing (UAT).
    • Utilize automated testing tools and frameworks to accelerate testing cycles and improve test coverage.
    • Monitor application performance using profiling tools, error-tracking systems, and log analysis.
    • Address defects, bugs, and performance bottlenecks promptly and systematically.
  9. Deployment and Go-Live

    • Prepare for deployment by provisioning servers, configuring environments, and setting up deployment pipelines.
    • Conduct thorough deployment testing in staging environments to validate system readiness.
    • Coordinate with stakeholders to plan the go-live date, communicate changes to end-users, and provide training and support as needed.
    • Monitor system health and performance post-deployment, and implement rollback procedures in case of emergencies.
  10. Post-Launch Support and Maintenance

    • Establish channels for user feedback, bug reporting, and feature requests to gather insights for continuous improvement.
    • Provide ongoing technical support, troubleshooting assistance, and software updates to address issues and enhance functionality.
    • Monitor key metrics and analytics to track user engagement, retention rates, and revenue generation.
    • Plan for future enhancements, scalability improvements, and platform updates to sustain long-term success.

Want to Outsource SaaS Project Development?

Let’s talk. We have a team of experienced software developers, engineers, QA engineers, designers, and DevOps engineers for your project.

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Let’s check the comparison of completely outsourcing SaaS projects vs staff augmentation.

Outsourcing SaaS Project vs Staff Augmentation vs Dedicated Development Team

Get a complete comparison of the outsourcing SaaS project development vs staff augmentation vs dedicated development team from the following table.

ModelOutsourcing SaaS ProjectStaff AugmentationDedicated Development Team
What It IsHiring a third-party software development company to build and deliver a complete software product or solution.Hiring remote developers or teams from a third-party vendor to work alongside your in-house team on a project or task.Hiring a third-party vendor to assemble and manage a team of developers who work exclusively on your project.
When to UseWhen you need a specific SaaS software solution or SaaS application developed from scratch or customized for your business requirements.When you need to add your existing in-house development team with additional resources or specialized skills for a specific project or task.When you need a long-term, ongoing software development partnership or have a complex project that requires a dedicated team.
  • Access to specialized expertise and skills
  • Cost-effective compared to in-house development
  • Faster time-to-market
  • Scalability and flexibility
  • Quickly scale up or down your development resources
  • Access to specialized skills and expertise
  • Cost savings compared to hiring full-time employees
  • Maintain control over the development process
  • Dedicated team focused solely on your project
  • Direct control over the development process
  • Continous communication and collaboration
  • Access to a global pool of talent and expertise
  • Communication and cultural barriers
  • Limited control over the development process
  • Risk of intellectual property issues
  • Dependency on the vendor’s availability and reliability
  • Integration challenges with in-house team
  • Scale-up time for new team members
  • Knowledge transfer issues
  • Higher cost compared to other outsourcing models
  • Vendor lock-in
  • Cultural and time zone differences
  • Staff turnover within the dedicated team

Let’s learn about the top 3 models for outsourcing SaaS development projects.

3 Models for Outsourcing SaaS Development Projects

While considering outsourcing SaaS development projects, business, and digital agencies have several models to choose from. Each of the models comes with its advantages and limitations. Here are the three common SaaS development outsourcing models.

  1. Dedicated SaaS Development Team

    The dedicated SaaS development model refers to hiring an outsourcing vendor to assemble a dedicated team of software engineers. This team of software engineers works dedicatedly on your SaaS project development. The dedicated team includes experienced software engineers, designers, QA engineers, a project manager, and a BA for your project development. By choosing the dedicated model, you have flexibility, scalability, and long-term collaboration.

      Benefits of choosing a dedicated team for SaaS development:

    • Get full control and transparency over your SaaS project.
    • Have an experienced, skilled, and certified team focused on SaaS product development.
    • Scale up or down the project resources based on the project requirements.
    • Get streamlined communication and collaboration between teams.
  2. Fixed Cost SaaS Development

    The outsourcing partner provides the entire SaaS project development within the predetermined fixed costs. In this model, the development team has the scope of work, deliverables, and timelines clearly defined upfront. Here are the advantages of the fixed-cost SaaS development model.

      Benefits of choosing fixed cost SaaS development model:

    • Predictable project costs with no surprises or budget overruns.
    • Pre-determined scope and deliverables upfront.
    • Reduced administrative overhead for budget management.
    • Strong incentive for the outsourcing partner to deliver on time and within budget.
  3. Time and Material Model

    In the time and material models, you pay based on the actual time and resources expended on the project development. The billing of the time and material model is done based on the utilization of resources on an hourly or daily basis. According to the project scope and requirements, software engineers work on your project.

      Benefits of choosing the time and material model:

    • Get the flexibility to accommodate changes or pivots during the project.
    • Pay only for actual time and resources used.
    • Ability to scale resources based on project requirements.
    • Get transparency and visibility into project development progress.

Choosing the right outsourcing model for your SaaS development project depends on project complexity, budget constraints, timeline, and risk tolerance. Carefully evaluate each model’s benefits and limitations to determine the best fit for your specific requirements and objectives.

Popular Destinations for Outsourcing SaaS Development

A report describes that outsourcing software development results in 40% to 70% overall cost savings. No matter whether you are outsourcing with nearshore or offshore software development companies. A few top outsourcing locations for Europe and US-based clients are Canada and South America. Let’s learn about the top destination for outsourcing SaaS-based software development.


  • Known for its high-quality talent pool and proximity to the US market.
  • Offers competitive pricing compared to US-based developers.
  • Provides cultural compatibility and ease of communication for North American clients.


  • Emerging as a top destination for software development outsourcing.
  • Offers a highly skilled workforce in software engineering.
  • Provides cost-effective solutions without compromising quality.
  • Time zone proximity to European countries is advantageous for ease of communication.


  • Renowned globally for its extensive IT talent pool and cost-effectiveness.
  • Offers a wide range of services at competitive rates.
  • Provides scalability and flexibility in project management.
  • Time zone differences require effective communication planning but can also facilitate round-the-clock development cycles.

Let’s now know the costs of hiring skilled software developers and engineers for the SaaS project development.

The average hourly rates of hiring software developers range from $15 to $275 based on the type of partner you opt for. Here is a table that describes the hourly rates of the different types of partnerships you choose from.

Offshore Software FirmsEnterprise-grade Outsourcing PartnersIn-house StaffProfessional Contractors and Agencies
$15 to $35/hr$35 to $75/hr$75 to $125/hr$125 to $275/hr

Most businesses, governmental agencies, and non-profit organizations choose Enterprise-grade outsourcing partners. Why?

These enterprise-grade outsourcing agencies like Space-O Technologies offer cost savings, high-quality talent compared to domestic outsourced firms, professional services level maturity, and lower risk. Additionally, the enterprise-grade partners have 95% experience working with US, European, and Australian clients.

Check out this blog post to learn about the costs of developing SaaS applications. By reading this post, you know the approximate costs of developing a SaaS application, the factors influencing the costs, and the stages of developing a SaaS product.

Further, let’s learn about the top SaaS development companies for outsourcing your project.

Top SaaS Development Companies for Outsourcing

Get a list of the SaaS development companies evaluated to help you choose the right fit for your project development.

Why Trust Our List?

We understand the importance of reputation. So here is a breakdown of how we analyzed and provided the list of SaaS companies.

Platforms Analyzed


Platforms Analyzed

We analyzed top platforms like Clutch, DesignRush, and GoodFirms that provide a list of SaaS companies along with reviews and ratings.

Companies Reviewed


Companies Reviewed

From 14 platforms, we reviewed 410 companies and sorted 34 companies.

Hours Researched


Hours Researched

We spent 110 hours manually reviewing 34 companies and sorted out the top 5 companies based on 13 factors.

Factors Considered


Factors Considered

We considered 13 factors and evaluated the top 10 companies based on SaaS services offered, hourly rates, website traffic, location, client base, and technical expertise.

Check the following table to learn about the list of the top 5 SaaS development vendors. We’ve created this list to ease your work of researching, shortlisting, and finalizing a partner for your project development requirements. This table provides all the necessary information like hourly rates, services, and Clutch reviews and ratings to help you pick the right SaaS development outsourcing partner for your project.

Company IconClutch Rating (Reviews)SaaS Development ServicesHourly RatesLocations
(61 Reviews)
  • SaaS Consulting and Strategy
  • Custom SaaS Software Product Development
  • SaaS Migration
  • Laravel Development Consulting
  • SaaS Integration
$25–$49/hrgoogle_map_iconSpace-O Technologies
(52 Reviews)
  • Custom SaaS Application Development
  • SaaS Migration
  • API Development for SaaS
  • Cloud-based SaaS Application Development
  • SaaS Integration
  • UI/UX Design for SaaS
$50 – $99/hrgoogle_map_iconBairesDev
(32 Reviews)
  • SaaS Consulting
  • Custom SaaS Solution Development
$50 – $99/hrgoogle_map_iconSigma Software Group
(93 Reviews)
  • SaaS Consulting
  • SaaS Application Development
  • SaaS Portal Development
  • SaaS Software Development
$100 – $149/hrgoogle_map_iconGrayCyan
(35 Reviews)
  • SaaS Product Development
  • SaaS Integration
  • SaaS Application Development
$50 – $99/hrgoogle_map_iconRoot Quotient

Points to Consider When Managing Offshore SaaS Development Process

  • Describe in detail your SaaS project vision with the offshore software developers team.
  • Show your product vision visually to the entire team of developers whom you have hired for your project development.
  • Discuss all the important points and ensure each team member is clear about what you want to achieve.
  • Make sure to have a complete roadmap with a detailed outline with feature lists and deadlines before starting your SaaS project development.
  • Provide the visual roadmaps and elements as much as possible to ensure the team is clear with the goals and requirements.
  • Allocate separate time for reviews and changes so your project deliverables have in-between time for reviews, revisions, and resolving unexpected changes.
  • Overlaw the time zone to ensure the work goes on efficiently without any unexpected delays.
  • Make sure your in-house team or offshore team is left with the notes for the other if communication doesn’t happen during certain schedules.
  • Provide incentives to offshore team members who work and adjust their schedules according to yours.
  • Ensure to have a daily meeting to discuss the project challenges, progress, and new ideas.
  • Provide one in-house member of your team to ensure the offshore team has all the resources they require for development.
  • Ensure your in-house and offshore software developers team use the communication tool that is decided before the development.
  • Don’t overcomplicate things including tasks, timelines, and delegated team members.
  • Make sure every SaaS software developer knows about the project deadlines.
  • Make it easy for team members to share ideas and talk about problems.
  • Provide all the necessary tools and support to your offshore software developers.

FAQ About SaaS Development Outsourcing Projects

  1. What are the risks of outsourcing SaaS development projects?

    Here is the list of risks of outsourcing SaaS development projects.

    • Communication barriers
    • Privacy and security concerns
    • Loss of control
    • Compromised quality
    • Business risks
    • Unexpected costs
    • Lack of domain expertise
    • Code inconsistency
    • Chances of constant delays
  2. How to find a reliable outsourcing SaaS development company

    Here is the process of selecting a reliable SaaS development partner.

    • Define specific requirements and objectives of your SaaS project
    • Research and identify outsourcing vendors on Clutch, GoodFirms, and DesignRush.
    • Consider factors while selecting a vendor such as an experience, portfolio, client testimonials, and technology stack.
    • Prepare an RFP document with project requirements, timelines, budgets, and expectations.
    • Understand and examine vendors based on technical expertise, cost, timeline, approach, and experience in SaaS.
    • Negotiate with shortlisted vendors to finalize contract terms.
    • Conduct a kickoff meeting with the selected outsourcing vendor that aligns with your project requirements.
    • Get your SaaS project development started, ensure quality assurance, and get your SaaS project deployed.
    • Get post-launch support and maintenance processes with the outsourcing vendor.
  3. What are the factors that influence the cost of SaaS development?

    The core factors that influence the costs of SaaS project development are such as:

    • The size of the SaaS project and the number of features and functionalities
    • The complexity of the SaaS software solution
    • The technology stack for developing the complete SaaS software solution
    • The number of team members involved in the project development
    • The number of API and third-party integrations required

These are the main factors that influence the development cost of SaaS projects.

Outsource Your SaaS Project Development to Space-O Technologies

In conclusion, outsourcing SaaS development offers numerous benefits such as cost savings, access to specialized expertise, scalability, faster time-to-market, and freedom from recruitment hassles. Choosing the right outsourcing model depends on project complexity, budget, and risk tolerance.

With the expertise and professionalism of Space-O Technologies, businesses can ensure successful SaaS project development while enjoying cost savings, high-quality services, and smooth collaboration. Trust in Space-O Technologies to bring your SaaS project vision to reality.

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Rakesh Patel

Written by

Rakesh Patel is the Founder and CEO of Space-O Technologies (Canada). He has 28 years of IT experience in business strategies, operations & information technology. He has expertise in various aspects of business like project planning, sales, and marketing, and has successfully defined flawless business models for the clients. A techie by mind and a writer at heart, he has authored two books – Enterprise Mobility: Strategy & Solutions and A Guide To Open311

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