In the current year, 2024, the global SaaS market is valued at $317.5 billion, and Fortune Business Insights predicts it will reach $1,228.8 billion by 2032. Such unparalleled growth is extremely promising, but it could become a double-edged sword for businesses that don’t factor in the demands such an expansion brings to the table.
Deciding on a scaling strategy early on is crucial to keep up with a growing customer base and avoid performance bottlenecks, crashes, and obstacles when it comes to implementing new features.
So how do you scale a business? Read on to explore several winning strategies and solutions to the most common challenges you might encounter.
Scaling SaaS apps: a quick overview
Before we delve into the details of SaaS growth strategies, let’s briefly cover what scaling means for a business, how you can benefit from it, and what scaling models there are.
What does it mean to scale a SaaS app?
Essentially, SaaS application scaling refers to expanding certain capabilities of your app as your business grows and faces increasing demand. It can occur on various levels, including technology, processes, and resource management.
When you add new features to your app or roll out significant updates, it’s all about growing bigger. Scaling, on the other hand, is a more subtle process focused on optimization that supports your growth endeavors. It ensures your tech infrastructure is flexible and ready to accommodate any changes, as well as deliver the same quality experience to all users as your customer base expands.
Reasons for scaling
The scalability of SaaS applications can frequently define how prepared your business is to function in tune with fluctuating market demands. It can grant you an unobstructed possibility to restructure your business model if the time comes, add new features, and respond to a growing customer base.
Scaling also helps make your app more reliable, reduce development time, improve the usefulness of analytics, and optimize performance costs.
Horizontal vs. vertical scaling
So how do SaaS companies scale? There are two main models that will define the scope of your efforts: vertical and horizontal scaling.
Vertical scaling outlines powering up your infrastructure. This is when you add more resources to your existing storage, CPUs, or networks. This process is typically easier to carry out, but it also imposes a limit on how much you can upgrade the same server.
Horizontal scaling is all about branching out and distributing the load among multiple servers or machines. It’s a flexible approach that allows you to control how many nodes or servers to add, depending on the demand. At the same time, it requires careful planning and management to coordinate all the servers and ensure the consistency of data among them.
Challenges of scaling a SaaS app
Building scalable SaaS applications comes with a particular set of challenges. Without sufficient planning and insight, businesses might find themselves caught in a loop of trying and failing, so let’s take a look at four main scaling challenges you can encounter and how to deal with them.
Premature scaling
Having a SaaS growth strategy in mind from the start is undoubtedly beneficial, but implementing it from the get-go risks devouring your resources without significant outputs. Early scaling may limit your flexibility as a startup and constrict the space for fast experiments.
Considering how saturated the SaaS market is, putting too much emphasis on scaling prematurely may diminish the innovative potential you have and cost you precious time to win customers’ over.
Solution: Focus on establishing your product on the market before increasing your customer acquisition spending. Similarly, on the tech side, you may benefit from implementing modular architecture first rather than going for microservices straight away.
Performance bottlenecks
Performance bottlenecks can present a painful challenge for scaling SaaS apps. When your traffic surges, and there is a demand to store and operate increasing volumes of data, the response time can get slower, leading to a deteriorating customer experience.
You may also notice more app crashes and other performance issues stemming from insufficient code optimization or the prevalence of non-scalable components in your infrastructure.
Solution: One way to ensure SaaS scalability and avoid performance bottlenecks is to implement horizontal scaling and distribute the traffic among several servers. You may also work on optimizing the code or introducing content delivery networks (CDNs).
Data security and compliance
When you’re looking to scale your SaaS product, the security requirements for your app will expand together with the customer base. When you start serving more customers, multiple technology and operational challenges can appear when it comes to securing user information and verifying transactions. As businesses grow, they may also need to comply with more data security regulations.
Solution: Prioritize security, especially when migrating to the cloud as part of the scaling process. Employ multi-factor authentication, data encryption, strong access control, and regular 360 security audits.
Integration complexity
SaaS product scaling is often focused on the main app, and it might be easy to overlook the system of connected services your software may be relying on. SaaS businesses leverage third-party services to seamlessly integrate certain bits of functionality, such as billing and payment or analytics, and such integrations might become unstable with an increase in user traffic.
Solution: Your scaling strategy should account for the existing integrations from the start. Partnering with a software company that offers system integration services may be one of the most reliable ways to achieve that.
Strategies for scaling a SaaS app
Now that we’ve outlined why scaling is paramount to a SaaS business, let’s take a closer look at how to scale SaaS apps. We’ll discuss several well-tested scaling strategies both on the technical and operational sides.
Technical strategies
1. Adopt Microservices Architecture
When scaling a business for growth, you’d likely benefit from the possibility of adding new features or making changes without affecting other components in your system. Microservice infrastructure offers a way to do just that. The idea behind it is splitting your system into separate components that work as a whole but function independently of one another.
One illustrative example of how microservices can improve the quality of service is Zoom. By implementing this architecture, Zoom can reallocate and increase resources where they are most needed at any given moment. As a result, their voice traffic is managed efficiently, and the quality of every call remains stable regardless of how many new calls are made simultaneously.
2. Leverage Cloud Infrastructure
Scaling SaaS applications can become faster and more cost-efficient if you opt for the cloud instead of using on-premise servers. Adopting a cloud infrastructure can eliminate hardware and software management expenses while granting you better performance.
There are numerous cloud vendors to choose from, with the biggest names on the market being Amazon Web Services, Microsoft Azure, and Google Cloud. These cloud platforms for rent come packed with everything you need to run an app, including hardware, operating systems, and supplementary services.
3. Implement Database Scaling
Ensuring sufficient database performance is paramount in scaling SaaS. As your business grows, you should expect an increase in the volume of data you need to store and operate. So, this is the time to outline your database preferences and select a provider that aligns with your scaling needs.
A couple of options include MongoDB and Cassandra, both representing NoSQL databases. These are competitive choices for horizontal scalability that work with different data architectures and support database partitioning.
An additional option to consider is implementing database query caching. This may improve your response time and decrease the load on your system.
4. Automate CI/CD Pipelines
Considering the ever-increasing velocity of improvement that’s required when growing a business, you might struggle with implementing infrastructure improvements without hindering your development speed. A strategy to help scale SaaS in this case is CI/CD pipeline automation.
CI/CD decodes to continuous integration/continuous deployment pipelines. This approach helps accelerate the process of testing and releasing an app, especially when you’re aiming to scale your product. By adopting it, you can minimize downtime, streamline the delivery of new features, and ensure fast resolution of any emerging bugs.
5. Utilize Content Delivery Networks
We’ve touched on content delivery networks (CDNs) briefly before, so let’s untangle what benefits they provide to SaaS scaling. The main advantage of CDNs is their ability to speed up load times for various content, such as images, videos, JavaScript code, and so on. By leveraging CDNs, you can distribute your static assets across multiple servers worldwide, thus cutting down latency and improving delivery speed.
6. Integrate Third-Party APIs
APIs for SaaS scaling offer an effective way to reduce the number of modules and features you have to develop by hand. Essentially, application programming interfaces allow you to integrate existing third-party services into your app smoothly.
Whether you need to implement payment functionality or display information that you don’t have direct access to (such as weather reports), there’s a ready-to-go solution you can integrate into your app via an API.
7. Deploy Monitoring and Alerting Systems
Scalable SaaS companies are characterized by the ability to monitor and manage various IT components efficiently as they implement larger and larger infrastructures.
One way to achieve that is by implementing robust monitoring and alerting systems. Such systems work in real-time to catch any abnormalities and peak traffic increases. They can deliver alerts in situations that require immediate action, therefore reducing potential drops in performance.
Business Strategies
1. Implement flexible pricing models
If you’re thinking about how to scale a SaaS business, pricing becomes a pivoting point that you can leverage to attract more customers. Selecting the right pricing models will help you avoid losing profit while offering accessible service.
You can opt for a couple of flexible pricing options, including subscription-based, usage-based, and tier-pricing models. You can also implement free trials and fremium options that are likely to lead casually exploring customers to become paid users, given time.
2. Ensure customer support scalability
Scaling a SaaS business is associated with customer base growth, and as you gain more users, it’s vital to supply them with quality customer care. Implementing omnichannel support is a prerequisite for sufficient customer retention.
One of the tools that can help you navigate the increasing demand is chatbots and other AI-driven solutions that can take a load off the support team’s shoulders by handling the most common questions without human intervention.
Additionally, you can create a resource base with self-help articles, FAQs, and interactive customer portals.
3. Secure strategic partnerships
Gaining more customers and scaling a SaaS app becomes easier when you secure partnerships. You can choose to collaborate with other providers whose services complement yours or with the platforms and marketplaces your target audience favors. This way, you can not only expand your customer base but improve the quality of your offering.
4. Leverage user feedback and iterative development
Delivering improvements based on user feedback is essential when you want to scale your SaaS. The fastest way to learn about the problems your users are facing, as well as their most desired features, is implementing quick and relevant surveys.
Additionally, it’s a good idea to conduct usability testing to see how your app performs in a real environment at various development stages. Once you gather feedback, you can gain insight into user behaviors and prioritize which features to implement first.
Wrapping up
Scaling for growth is a comprehensive endeavor that calls for the utilization of multiple technology and business strategies. When you find yourself ready to take your business to the next level, you will encounter multiple challenges with not only acquiring an extended customer base but accommodating for it and scaling your tech infrastructure and business processes to meet the rising demand.
We’re fully prepared to help you on your journey. If you’re wondering how to build and scale a SaaS app, contact us to book a call with our expert team and discuss the best growth strategies for your business.
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About the author:
Oleg Roberman, Chief of Delivery at Eastern Peak
With strong technical background and outstanding project leadership skills, Oleg helps Eastern Peak customers introduce competitive advantages and instill productive changes in every process by resolving complex business issues and managing multicultural teams through innovation and creative thinking.
