Have you ever considered how empires are built? It’s true that tactical-minded generals make the history books. But there’s one forgotten aspect that stretches all the way back to Romans reaching out to engineers from all over the world to build their famous aqueducts. The answer is, of course, outsourcing. In modern times, outsourcing has become a way for businesses to save money and gain skills by shifting activities outside the organization, especially in areas like building operational infrastructure and software.
According to a survey of more than 9,300 IT professionals, 76% of them say they face a tech talent gap in their department. Heading into 2024, the demand for high-quality software development is outweighed by a lack of in-house resources. This is often quoted by decision-makers as a major obstacle in digital transformation, together with a lack of expertise in emerging technologies. In fact, the lack of internal knowledge is the most significant impediment to AI adoption according to the IBM Global AI Adoption Index 2023.
These are all pressing challenges that have prompted companies to look beyond traditional models, leading to the rise of Software Development as a Service. SDaaS is not just a response to the well-known need for talented software developers, access to cutting-edge technology, or a predictable development cost. It’s a new strategic approach to outsourcing software development that focuses on increasing business value. Intrigued? Let’s explore everything you need to know about SDaaS.
Simply put, the SDaaS model means hiring individual developers or a dedicated team to provide software development services on an as-needed basis, rather than a one-off project. Similar to how you pay a monthly subscription to use Hubspot, Salesforce, or any other SaaS platform, SDaaS also operates on an ongoing contract where you can access development services on demand.
Let’s say you are a healthcare startup gearing up for a public launch. Your team is small and lacks the necessary expertise to implement integrations for telehealth video consultations. With SDaaS you can quickly bring in developers with just the right skills without going through the hassle of hiring them full-time to meet the tight deadline. After the product is launched you might decide to downsize to your original team until you gather enough user feedback. Then, you can quickly resume development by working with the SDaaS provider to add new features or implement a mobile version of your application.
All in all, Software Development as a Service offers a convenient way to scale your efforts, whether it’s augmenting your team, delegating specific aspects of software development, or the entire process of application development. Here are three of the most common services covered by SDaaS.
Developer as a Service: As the name suggests, this involves hiring experienced developers through SDaaS service providers instead of recruiting them yourself. They can work standalone or on multiple projects within your existing team to bring in additional expertise in niche technologies like machine learning, big data, or any other specialty your team lacks. One of the biggest perks is that you can add or remove developers on demand from a wide pool of available talent based on your requirements and deadlines.
Application Development as a Service: This partnership model is about delegating software development for your web or mobile applications end to end. The dedicated software development team is devoted entirely to your project and oversees all aspects of developing the software product, including hosting product discovery workshops, designing the UI/UX, coding, and maintaining the application after the launch.
Software Engineering as a Service: As your company develops, the software architecture may become increasingly high-maintenance, translating into more work for your IT team. With this SDaaS model, you can externalize different software engineering tasks like DevOps principles, quality assurance, maintenance and support, or software configuration management for a more scalable alternative.
As we’ve seen so far, the core concept of Software Development as a Service revolves around providing software development as a flexible arrangement. Companies delegate specific aspects of development (including hiring engineers) or their entire development process to a third-party provider on a contract basis. Depending on your requirements, SDaaS teams can operate externally or they can integrate into your team to help you adjust capacity as needed.
The process usually involves the following steps:
Initial consultation and scope definition: Each provider will vary in their approach and in how they source software development talent. For example, some providers use offshoring to enable a cost-effective solution. During scope definition, you can discuss, ask questions, and assess how the service provider operates, while the provider can better understand your project requirements which will then be mapped in an SLA.
Signing a Service Level Agreement (SLA): A Service Level Agreement guarantees both parties agree on all the key aspects of the project — deliverables, general timeline, and the specifics of developer responsibilities. It’s also a great way to set expectations and quality standards, as well as specific actions you can take if these standards are not met.
Project onboarding: Depending on your type of project, the SDaaS provider will allocate a dedicated team to support the entire development lifecycle which may include project managers, designers, developers, QA, or individual specialists to onboard into your own team.
Implementation and feedback: With SDaaS you can benefit from a wide range of technical expertise and resources without the associated time and money expenses of doing everything in-house. During implementation, the provider works with you to decide on tech stack, create a detailed design and architecture, code, test, deploy, and maintain the application. Feedback is gathered throughout the project to make adjustments and iterate fast.
Taking into account how SDaaS works, you’re probably wondering: “But isn’t Software Development as a Service the same as outsourcing?” At first glance, these two solutions look very much alike. Both are designed to help companies contract custom software development services without the overhead associated with expanding their in-house teams.
However, while outsourcing tends to focus on a specific project with a defined endpoint, SDaaS acts as a strategic partnership, where the provider is deeply integrated into your processes and long-term goals. They work closely with you before, during, and after development to ensure you meet critical business priorities and they share responsibility not only for the end result but also for the evolution of the project (scalability, updates, maintenance, add-ons).
SDaaS revolutionizes traditional outsourcing by integrating elements from other “as a service” models like Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS).
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“As a service” models |
What it means in SDaaS |
Impact on traditional outsourcing |
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Increased flexibility |
SDaaS allows you to scale development efforts up or down on demand according to project requirements and the market. |
Reduces the need for fixed contracts in an industry where technology and business needs evolve rapidly. |
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Subscription-based pricing |
SDaaS relies on a predictable, monthly subscription fee making it easier for businesses to estimate costs in the long run. |
Lowers the risk of hidden development costs and makes budget management more transparent. Easier to keep track of than hourly rates. |
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Ongoing maintenance and improvements |
SDaaS prioritizes long-term collaboration by providing maintenance, QA, bug fixes, and support. Software is continuously enhanced with the latest features and security updates. |
Encourages long-term accountability for external teams and prevents technical debt by following the principle “You build it, you maintain it”. |
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Rapid iteration and development |
SDaaS provides access to the infrastructure, expertise, tools, and Agile methodologies you need to accelerate development. |
Improves the Agile cycle of feedback, iteration, and continuous development beyond the initial launch. |
Software Development as a Service can bring many benefits for a company looking to increase the business value of software development. Here are the main ones.
As businesses evolve, so do their responsibilities. There inevitably comes a point where companies begin to stretch their resources to handle non-core activities. If your non-IT staff routinely tests applications, submits tickets in Jira, or handles technical tasks, then you are losing significant operational potential. By entrusting software development to a dedicated team you can focus only on those activities that are related to your business, increasing efficiency and profitability as a result.
Product development requires a lot of planning, from researching the market and audience to prioritizing features and coding the actual MVP. But what if you already have a software product and you need to keep it fresh by adding new features and updates constantly? In both cases, speed is of the essence. The ability to quickly onboard product experts and hit the ground running in development is key and Software Development as a Service provides exactly this.
SDaaS providers document each stage of the development process and use Agile methodologies to plan accurate estimates for each milestone. They also hold demo meetings to fill you in on the progress and assign a Project Manager as the main point of contact if you work with a managed team. This allows for a transparent and seamless workflow. What’s more, you can add or remove development resources as your business priorities change, making sure you pay only for what you need.
Finding and keeping technical talent has become increasingly challenging according to 86% of hiring managers. Software developers have a dynamic job search experience, with many companies competing for their attention. SDaaS offers a cost-efficient alternative to recruiting, hiring, and training your own engineers, without having to risk losing the investment if they leave the company. And because it operates on a subscription basis, you have full control and visibility over your spending month over month.
Tech-first companies are at the forefront of digital innovation. This means they need to be able to quickly pick up trends and emerging technologies like AI, machine learning, IoT, blockchain, and more to stay ahead. Partnering with service providers can offer a competitive advantage. They have exposure to a wide range of complex projects, industries, and best practices, which allows them to bring to the table a problem-solving mindset and innovative solutions.
Developers work with a lot of other team members to bring ideas to life, whether it’s designers, DevOps, or other engineers. Onboarding doesn’t just stop on the first day. To be truly productive, developers need to get accustomed to the team dynamics, which might take a while.
In a SDaaS model, you can externalize development to a dedicated team that already has plenty of experience working together. As the team gets to know your business in detail, this becomes an invaluable asset. You can enjoy the best of both worlds: a mature team with already established processes and a team that understands your business flows and can support your operations in the long run.
While SDaaS offers several significant advantages, it does come with a few potential downsides you need to consider.
The goal of SDaaS is to offer a comprehensive solution to all your software development needs. The provider may handle all your software development projects, updating and maintaining your application, or other amenities of development teams, like recruitment, IT infrastructure, HR support, and more. This over-reliance on the service provider can create issues if you have doubts regarding their transparency, reliability, or decision-making ability. It’s always best to do a background check and thoroughly research providers before committing to one.
When outsourcing software development, you will be in touch with the team a lot. Communication can be more challenging when working with an external service provider, particularly if there are significant differences in organizational culture, work practices, and values. Nailing the tech is only half of the success story. The other half is building good communication habits and aligning delivered software with clearly communicated expectations.
Sharing your project details and sensitive information with a third-party can leave room for security and privacy risks or even Intellectual Property theft. It’s essential to thoroughly assess if the provider adheres to robust security protocols and data protection measures. Most software development companies sign Non-Disclosure Agreements (NDAs) with developers on an individual basis.
Wondering if Software Development as a Service is worth it? SDaaS can benefit a wide range of projects and companies. While your in-house team can bring valuable industry-specific expertise, third-party developers can complement your existing capabilities with specialized technical skills.
Start-up projects: Startups and small businesses often have limited resources although competing in a fast-paced environment. SDaaS can provide access to professional software development services without a significant upfront investment, while rapid prototyping and development cater to the time constraints faced by many startups.
Enterprise development: Although enterprises usually have in-house development teams, they can still benefit from SDaaS to bring in additional expertise during busy periods. Legacy systems modernization is another area where enterprises rely on external teams to integrate their old systems with new technologies.
Mobile app development: We live in a mobile-first world, so almost any business requires some form of mobile app. SDaaS offers an opportunity for modern businesses to develop hybrid and native mobile apps and deploy them on different app stores.
Web development: Companies requiring custom web development can work with service providers to create fully responsive websites and cross-device web apps. Progressive Web Apps (PWA) provide a cost-effective alternative to building separately for web and mobile.
SaaS product development: SaaS products rely on ongoing support and maintenance to keep their application fully functional and their customers happy. SDaaS teams can provide bug fixes, patches, and important upgrades to ensure smooth operations.
E-commerce development: While e-commerce companies excel at selling online, third-party developers can add another layer of usability and scalability to such platforms — helping them adapt to fluctuating demand without heavy infrastructure investments.
Fintech development: Compliance and reliability are core concerns for fintech app development. External expertise in cybersecurity, data management, and data governance can fortify platforms against breaches that undermine user trust.
Healthcare development: For healthcare providers, collaboration with external development teams can lead to innovative telehealth solutions that improve patient care and reduce administrative burdens.
Manufacturing development: In manufacturing, third-party developers can help implement systems for inventory management, supply chain optimization, production scheduling, and quality control using technologies like IoT, AI, and data analytics.
As we move forward, entrusting software development to a reliable provider has become more than a backup option, it’s an essential business strategy. SDaaS offers a compelling alternative to traditional outsourcing. It allows companies of all sizes and industries a cost-effective, flexible way to access technical expertise on demand and streamline their development while staying true to their core business.
As a digitally enabled People as a Services provider, Helpware covers the full spectrum of business process outsourcing, from the first lines of code to long-term maintenance for your application and five-star customer support for SaaS products. By leveraging Software Development as a Service, our goal is to help companies not only achieve their software-related goals but also build a long-term partnership focused on real business value.