Outsourcing SaaS Development: Pros, Cons, & Expectations

SaaS outsourcing is the practice of hiring external teams to develop, manage, or support software-as-a-service (SaaS) products. Instead of relying on an in-house team, businesses outsource their tasks like software development, maintenance, and security to third-party providers. This approach allows companies to access specialised expertise, reduce costs, and improve efficiency. 

SaaS outsourcing helps businesses scale faster by ensuring their software stays updated, secure, and fully functional without the need for a large internal team.

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We have listed some of the key benefits of SaaS outsourcing:

Outsourcing SaaS development can save money. By outsourcing tasks to teams that charge minimum cost for services without sacrificing quality, you can save money. This approach also eliminates costs related to hiring and training new employees.

It is crucial to get your product to market quickly. Outsourcing provides access to experienced teams that can start work immediately, speeding up the development process. This means your product can reach customers faster than if you built an in-house team from scratch. ​

With our ready-to-deploy agile teams, businesses can accelerate their product development and bring products to market faster. 

Outsourcing connects you with professionals with specialised skills, such as cloud architecture and cybersecurity. These experts bring valuable experience from previous projects, helping you avoid common mistakes and ensure a high-quality product. ​

At our agency, we connect businesses with top-tier SaaS professionals specialising in cloud architecture, microservices, and cybersecurity. Clients get access to cross-functional teams, including developers, designers, project managers, and QA engineers, ensuring smooth execution.

Working with established outsourcing firms can reduce the risk of project failure. These firms have experience in handling essential aspects like data security and compliance with regulations. Clear agreements, such as Non-Disclosure Agreements (NDAs) and Service Level Agreements (SLAs), can protect your business interests.

Tenet minimises project failure risks with experienced teams that understand SaaS compliance standards like GDPR and HIPAA. We provide clear contractual safeguards, including NDAs, SLAs, and IP ownership agreements, to protect clients’ business interests. 

Outsourcing allows you to adjust the size of your development team based on current needs. This flexibility helps manage workloads effectively and adapt to changing project requirements without the long-term commitment of hiring full-time staff. ​

Tenet offers a scalable workforce, allowing businesses to scale teams up or down as needed without long-term commitments. This adaptability ensures that companies can respond quickly to market changes and new opportunities.

After launching your product, ongoing support is essential to fix bugs and provide updates. Many outsourcing partners offer continuous maintenance services, ensuring your application remains reliable and up-to-date.

Tenet provides 24/7 post-launch maintenance, bug fixes, and regular updates to ensure SaaS applications remain secure and efficient. With cloud optimisation and auto-scaling solutions, Tenet prepares businesses for future user growth.

1. You need complete control

Build an in-house SaaS team if your product is central to your business. Having a dedicated team ensures deep product knowledge and long-term commitment. 

This approach allows you to have full control over the development process, ensuring the product aligns with your company's goals and vision. 

An in-house team can make continuous improvements and adapt quickly to changes, providing consistent quality and innovation for your core product.

2. You have the budget for long-term investment

Building an in-house team is a significant financial commitment. It involves not only salaries but also recruitment, training, office space, tools, and other long-term costs.

If you have that budget, then go for an in-house team. 

3. You require continuous improvements and innovation

If your SaaS product requires frequent updates and innovation, an in-house team can provide continuous support and ensure quick responses to changes. However, you can balance in-house and outsourced tasks to avoid overreliance on anyone. 

1. You need to launch quickly

Outsourcing lets you tap into experienced teams who can start immediately, speeding up your time to market for your SaaS product.

2. You want to minimize costs

Hiring and maintaining an in-house team requires significant investment, while outsourcing provides a cost-effective alternative without compromising quality. This ensures you save money.

Plus, when you are outsourcing to Tenet, we understand what knowledge gaps are there. Our team can assure you that we provide all the services you may need. 

For example, an e-commerce client asked us to develop a SaaS platform, but when they heard we are experts in structuring email campaigns and running Google Ads as well, they were relieved. 

Why? 

The client didn't have expertise in these areas, and without us, they might have had to hire a separate agency.

3. You lack technical expertise

If your company lacks the technical skills needed for software development, outsourcing lets you access top-tier experts without having to hire full-time employees.

In such cases, you can contact Tenet. We have successfully delivered 450+ solutions, which is proof of our experience and expertise in the domain.

4. Your project has a defined scope and timeline

If your SaaS product has clear requirements and a fixed deadline, an outsourced team can execute efficiently within those parameters. An outsourced team can efficiently meet deadlines since its reputation depends on delivering quality work on time.

Tenet has a reputation for timely project delivery. These aren't our words, but our customers say so.

5. You want to focus on business growth

Instead of managing a technical team, you can allocate your resources to sales, marketing, and customer support while experts handle development. 

At Tenet, we have a team of experienced professionals who go beyond developing a SaaS product. We don't provide customers with a pre-planned package; instead, we understand your requirements to create a customised solution. 

Choosing the right outsourcing model is crucial for project success. Here are the three main outsourcing models:

The Time & Material model allows businesses to pay for the actual hours worked and the resources used. It is best suited for projects with changing requirements or when the final scope is unclear. This model provides flexibility, making it ideal for startups or businesses that anticipate changes during development.

Pros:

• Clients can adjust project requirements at any stage.
• Payments are based on actual work done, avoiding unnecessary costs.
• It works well for complex projects that need continuous updates.

Cons:

• The final cost can be unpredictable if the project extends beyond initial estimates.
• Clients need to closely monitor progress to control expenses.
• Frequent changes can lead to delays in project completion.

The Dedicated Team model involves hiring an entire team of professionals who work exclusively on a client’s project. This approach is best for long-term projects where consistent development and deep product knowledge are essential.

Pros:

• The team becomes highly familiar with the client’s product and business needs.
• Clients have complete control over the project’s direction and priorities.
• Ideal for ongoing development and scaling SaaS solutions.

Cons:

• This model requires a long-term financial and managerial commitment.
• To properly manage a remote team, you may require additional resources and effort, which may affect the price.
• If the project scope changes significantly, costs can increase over time.

The Fixed-Cost model is a contract-based approach where the client and outsourcing provider agree on a set price for a defined scope of work. It is best for projects with clear requirements and fixed deadlines.

Pros:

• The budget is predetermined, ensuring no unexpected costs.
• The timeline is fixed, making it easier to plan and meet deadlines.
• Suitable for small to medium projects with well-defined objectives.

Cons:

• There is little room for flexibility once the project starts.
• Any changes to the scope may lead to additional charges.
• Developers may prioritize speed over creativity to stay within budget and timeframe.

The first step in outsourcing SaaS development is clearly outlining your business objectives, technical specifications, and expected outcomes. For better outcomes, you can also define the scope, required tech stack, compliance needs, and scalability considerations.

Similarly, when outsourcing your SaaS development to a third-party company, you need to provide them with your requirements and expectations. Not everyone has the skill to create complete requirements, product specifications, or a product roadmap. But you must have a high-level product vision. 

Other things to consider are:

• Your target audience 
• Your budget and timeline 
• Compliance requirements, like GDPR and HIPAA

Businesses need to choose the right outsourcing partner. Why? A wrong vendor can cause you to deal with security vulnerabilities or end up with a SaaS product that doesn't scale. 

You can search for potential ones by looking at external review platforms like Google, Clutch, GoodFirms, and G2. These platforms provide verified client reviews and rankings. 

For example, if you want to know about Tenet’s SaaS development potential, you can look into their Clutch profile. 

You can also check out different case studies to understand how the company works. Tenet has multiple client reviews on its platform to showcase. This suggests its expertise and experience in SaaS development outsourcing. 

You can filter the list of potential vendors based on:

• Experience in SaaS development 
• Industry-specific expertise 
• Technical capabilities 
• Certifications and security compliance 
• Cultural compatibility and communication style 

Tenet qualifies as the best in all of the above criteria, as reviewed on GoodFirms.

Before choosing a SaaS development company, understand the vendor’s approach. Check their process, technology stack, and support system. 

Make sure they align with your business goals. Ask about security, scalability, and pricing. A good vendor will offer clear communication, flexibility, and reliable service.

Here’s what is included in our SaaS development services (along with our service approach):

Also, you can request a proposal from Tenet by completing their form and mentioning what services and outcomes you are expecting. 

SaaS projects usually work with company-sensitive data, so focusing on good security practices is essential. Whenever you hire SaaS developers, you make sure they are familiar with the regulatory requirements specific to your region and industry.

For example, Tenet defines all the security measures they take to secure your data during a meeting before finalising the contract. This gives you enough time to research the security measures you need to follow and discuss with our team for anything more.

Companies following agile methodology for SaaS product development are best for outsourcing. It ensures flexibility, faster iterations, and getting regular client feedback. Agile breaks SaaS development into small, manageable parts. It allows developers to regularly test and improve the product and ensure better performance with every update. 

Before committing to a long-term contract with vendors, you can see them in action. A good portfolio and customer testimonials can be great, but conducting workshops or pilot projects can show how the team presently works under real project conditions. 

Start with a workshop. This is a short, hands-on session during which you discuss your SaaS project in detail and observe how the vendor thinks, solves problems, and communicates. Do they challenge ideas or just say "yes" to everything?

Then, try a pilot project. If the workshop is successful, you can ask the team to execute a small-scale pilot project. Give them a small, meaningful task to test their coding skills, work speed, and teamwork.

SaaS development outsourcing comes with multiple lists of factors, such as loss of control over product development, unforeseen expenses, communication barriers, security gaps, and low-quality products.

Before finalising the contract, you must be aware of how to mitigate or avoid these risks. 

Now that you have selected a vendor and decided what to do with it, you need a contract. This protects your interests, sets clear expectations, and prevents costly misunderstandings later. 

• Ask for a non-disclosure agreement: This protects your IP and prevents any unauthorised access to the SaaS product.
• Sign SaaS outsourcing contract: This is detailed information on your product acceptance criteria, based on project deliverables, timeline, budget, major milestones, and the definition of what a complete product will look like at the end. 
• Define vendor exit strategy: An exit strategy clause in your contract can prevent problems when switching vendors. It includes handover timelines, knowledge transfer obligations, and required documentation. 

Choose a vendor that offers a clear and smooth onboarding process. They should provide detailed documentation, training, and support. Ensure they have a structured plan for setup, data migration, and integration.

Here are some pointers that you may check while getting onboarded:

• Request detailed documentation and user guides.
• Ensure they offer training sessions for your team.
• Ask for a structured onboarding plan with clear steps.
• Verify they provide support during setup, data migration, and integration.
• Ensure they have a timeline to minimize delays and confusion.
• Confirm that they offer ongoing assistance after the initial onboarding phase.

You must try to find out whether the vendor offers post-development support and maintenance. Your SaaS product requires regular maintenance, updates, and scaling for long-term success. Tenet ensures you get the best support from the team to handle bugs, enhance features, and scale your product effortlessly. 

The cost of outsourcing SaaS development depends on the pricing model you choose. There are two main models: Time and Material (TnM) and Fixed Price. 

Each has its advantages and drawbacks, depending on your budget and project needs.

In this model, you pay for the actual hours the team works. It’s like paying workers by the hour, which gives you more control over the project. You can change tasks anytime and track where your money goes. However, since there is no fixed total cost, expenses may increase over time.

Here’s a rough pricing breakdown:

Hourly rates vary depending on the role. Designers charge $25–$125 per hour, developers $35–$150, and consultants $60–$200. 

Based on our experience, we see that many companies prefer a blended hourly rate, which combines different team roles into one fixed hourly price. This makes budgeting simpler.

In a fixed pricing model, you agree on a total cost before work begins. 

This gives budget certainty, so you don’t have to worry about unexpected costs. It also sets clear goals and expectations. However, the downside is that changes are harder to make once the project starts.

The final price depends on the project’s complexity, timeline, and scope. Put simply, choosing the right model depends on your budget and how much flexibility you need.

The typical timeline for outsourcing SaaS development isn't fixed. However, the typical timeline for outsourcing SaaS development is 3 to 6 months, depending on complexity.

This timeline usually depends on multiple factors, such as:

• Project complexity – More features require more time.
• Team size – A larger team can speed up development.
• Technology stack – Some frameworks take longer to implement.
• Third-party integrations – APIs and external tools may need extra time.
• Testing & QA – Extensive testing ensures quality but adds time.
• Client feedback & revisions – Changes can extend the timeline.
• Compliance & security requirements – Meeting industry standards may require additional work.

SaaS outsourcing can be a smart choice for businesses that want to save money and access expert developers. It speeds up product development, offers flexibility, and helps manage resources without the need for a big in-house team. 

However, it’s important to choose the right outsourcing partner to ensure high-quality work and reduce risks. If you're looking to grow quickly, control costs, or lack technical expertise, outsourcing could be the solution you need.

If you're ready to take your SaaS platform to the next level, contact Tenet today and build a future-proof digital business.