How To Build a Successful SaaS Product Using Open Source

How To Build a Successful SaaS Product Using Open Source

The Cisco Annual Internet Report claims that, by the end of 2022, 75% of cloud computing workloads and workstations will be in the form of a SaaS model. This means that the SaaS industry is full of opportunity (just think of the many micro sass ideas out there) but also competition. Looking at how many companies choose to sell software online, we would agree that this is a competitive industry. 

When working on a custom SaaS development, speed and scalability are vital. If you are unfamiliar with open-source software, it is free and generally easy to incorporate into another product.  It can also be modified or customized to suit your specific needs, making it even more appealing.  

Unfortunately, many new businesses using the SaaS model overlook open-source software in the creation process, not realizing that these tools can be used to accelerate growth and build a successful SaaS product. 

Please read on to get the lowdown on using open source to build your next SaaS product. Some of the many benefits may even surprise you!

What Does ‘Open Source’ Mean?

“Open source” generally refers to something people can modify and share. The term most often replies to software when the code has been made publicly accessible. Think of it like an online community for SaaS business

The term promotes open exchange, collaboration, transparency, and community-oriented software development. It’s easy to see how this is an excellent opportunity for many businesses.

what is open source?

How To Build a SaaS Product Using Open Source

Use Open Source Libraries or Frameworks

The first question is: Is my team regularly exploring open source libraries? And are we discussing this option, so everyone knows the benefits of exploring open-source libraries when building SaaS products? 

If they’re not searching for existing open-source code as a first step, it’s probably time to remind them that open-source libraries are an excellent place to start.

You might be wondering,  what, exactly, is an “open-source library”? Well, simply put is an online source with a range of free-to-use software and code. These libraries usually include code for solving problems software developers frequently encounter.

The list includes, for example, code that:

Simplifies the use of dates, timestamps, and time zones.

Helps with the encryption and decryption of data to meet industry and security standards.

Helps to transform data from one format to another.


By now, I’m sure it’s clear how open-source software and code can be invaluable for SaaS business models. Why reinvent the wheel when the code you need for your product already exists? 

Simply take what you need from an open-source library to save time and modify it as necessary to fit your needs.

Another term we want you to keep in mind is “open-source framework.” An Open-source framework means a network of developers produces the templates for software development to speed up the software development process. What now? 

An open-source framework could help you create a complex user interface faster than writing the code from scratch. It is important to note that when you work with an open-source framework, you take on the specific tools and methods associated with it. 

This can be very useful, but it also means that you need to choose carefully to make sure you end up with a solution that’s 100% in line with your needs and goals. 

To summarize, using open-source can make your software team’s job a whole lot easier, as they will have to write less code which is very time-consuming. 

Using foundational code from libraries or frameworks, they can focus their time and energy on producing the code for functionality specific to your product. 

These fundamental elements will help set your product apart in the rapidly growing SaaS market and make it more valuable and unique.

vector image of open source

Build On Existing Open-Source Products

To be clear, this is different from using open-source frameworks and code. Usually, it’s completely legal and possible to take an existing open-source product and build on it to create your commercialized software product. In this instance,  we’re talking about taking the software product in its entirety and adapting it. 

Fortunately, entirely usable open-source products exist and are there for the taking. Using an existing product can save your developers a lot of time; perhaps as much as  80% or 90% of the code you need will already be written. 

The chances are high that nothing already out there will suit your needs, but this is an excellent solution if it does and is worth checking into it.

Take note: It’s always best to check in with your attorney to ensure you aren’t violating any intellectual property rights.

Use Open-Source Products To Complement Your Business

The Merriam-Webster dictionary defines the word “complement” as “something that fills up, completes, or makes better or perfect.” Now, who wouldn’t want to make their product better? 

Let’s say you’ve created most of your code from scratch, but there are some non-core, complementary functions you need to add to perfect your product. Finding open-source code for these secondary features could be the way to go by saving you much precious time. 

For example, suppose you’re building a business communication service and need to add some content-creation tools to the offering. You could dig for existing content creation-related code and save time, money, and effort.

Build Your Brand Name by Contributing to Open Source

So far, we’ve talked about how you can use existing open-source software to enhance your product. But in the spirit of community and collaboration, you can also contribute to open-source projects by making some of the code you’ve written for your software product available as open-source too! 

This may seem like a waste of time and energy, but it’s always good for software engineers to build their reputations. And if they are linked to you, it can also help you build your brand awareness. People always appreciate generosity and sharing, and you’ll be doing good in the software community by creating much-needed code or finding solutions to frequently encountered problems.

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Top 6 Benefits of Using Open Source for Your SaaS Product

1. Quicker Creation Times

Open source can help you speed up the delivery times of your software products. Your teams will have to write far less code, and, as a result, they’ll also have to do less testing.  As they say, time is money!

It’s a win-win situation for everyone, including you: the quicker your teams can build the product, the quicker you can start bringing in revenue and scaling your SaaS business. Using open-source software can also help keep your costs down. 

Writing large amounts of code could mean paying many engineers for days, weeks, or even months on end. Reduce the amount of new code needed by using open-source, and your software and SaaS development needs and costs will be reduced dramatically. 

Lastly, and most importantly, you’ll be able to deliver an excellent product that helps to address one (or more) of your customers’ pain points faster. Ultimately, they’re the most critical element of your SaaS business, so their needs should always stay top of mind.

Quicker Creation Times for Open Source

2. Others Help Maintain Your SaaS Product

Imagine having a whole team of people working with and improving your code, and they aren’t even on your payroll. This scenario may sound like a dream come true, but this is precisely what happens when you adopt open-source software. 

The software you’ve chosen to use will be maintained, updated, and improved on by members of the open-source community. So, however much code you decide to use, the maintenance of that portion of your software will be managed outside of your budget. 

Because you don’t always know who is maintaining the software, It is important to remember that you need to watch the changes others make. Luckily, there are well-established guidelines that should mitigate any potential risks.

3. Access to Like-Minded Communities

Using open-source software can create valuable opportunities for your team to work with like-minded individuals. Your team will be collaborating with developers who work on similar software and who have similar interests or problems. The value of camaraderie goes a long way, especially if anyone on the team needs mentoring. 

Through these communities, your SaaS business is perfectly positioned to identify future business allies and competitors. You can immerse yourself in the “ecosystem” into which you fit, which can also help recruitment in the worldwide market. Achieving SaaS product-market fit becomes less of a challenge. 

4. Software Engineers Like Open Source

Many software engineers enjoy the idea of working with open-source software. They like partnering  with others who believe in collaboration and buy into the principles that open source software is “a service for the greater good.”

When building your SaaS product, hiring and retaining the best engineers and developers you can find and afford is critical. One way of doing this is to encourage your team to work with open-source software whenever possible. Generally, software engineers can’t show off the work they’ve created directly for their employers. 

However, they can display their work and demonstrate their abilities to future employers if they have worked on an open-source project.

Software Engineers Like Open Source

5. Deliver More Value in Less Time

It’s no secret that  SaaS startups need investors along the way. Venture capitalists (VCs) and other funders usually want to see that a product can deliver value to customers in the shortest possible time. 

This concept is called “capital efficiency.” Greater capital efficiency means you’re more likely to attract investors and start growing faster.

Using Open source as a solution can help you maximize your capital efficiency. You’ll be cutting down on coding costs and expenses linked to using a large team to maintain the code. Plus, you’ll be able to combine work from inside and outside the business.  

6. Build Trust

Customer trust is vital to the success of a business developing a new SaaS product. One way to build confidence in this relationship is to allow the customer to see that your actions match your words. When and if scouting the industry for SaaS startup funding, enjoying the trust of your customers will matter greatly. 

For many, viewing your product’s source code (because it’s open-source, after all) is a valuable tool that helps with this process. Transparency and trust always go hand-in-hand, just like it happens when building SaaS in public. 

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Your Professional eCommerce Partner

No 3rd party integrations. No hidden costs. No wasted time.
 Just a solution as unique as your business’s needs.


5 Ways To Avoid Risks When Using Open Source

While open source has numerous benefits, we should warn you that using the code isn’t entirely without risk. We recommend following these guidelines to avoid any possible open source-related problems when building your SaaS product:

1. Use Well-Maintained Projects

Before choosing and using any open-source code, check the contribution history. Pay close attention to who is updating the code and how often. It’s best to look for open-source software that is frequently updated so you feel comfortable that it is current.

2. Get Clued Up on Licensing

It should be pointed out that Open-source software comes with licensing and contribution agreements. But it’s essential to remember that not all open-source software and code are equally “open.” 

There are multiple levels of open source, and it’s key to check on these before using any of the available codes. We suggest bringing your attorney into the research process and discussion to avoid future disasters. 

You should regularly check that you aren’t inadvertently transgressing and violating agreements. On the other hand, if you create and share any open-source code, be careful not to have a permissive open-source license. Anything too permissive could risk others taking the code and using it to create competitive software products or reselling the code to their customers. 

Unfortunately, some folks could try to take advantage of your code without giving anything back to the project. For example, the very permissive MIT License is fantastic when you want as many businesses as possible to use your code. 

But for a SaaS product, which gets delivered directly to the customer, an AGPL license is probably a better option. 

In this instance, no one can take your code and create a competitive product. And if they do, it has to stay open source,  which will help prevent dubious behavior.

3. Beware Those Bugs

When people work together on projects, particularly ones as complex as software and coding, bugs are expected. So plan around them, ensure you’re able to fix them and don’t forget to plug the fixes back into the main project. This collaboration is the beauty of open-source, and it’s essential to always be thorough.

Beware Those Bugs in Open Source

4. Use Open Source Libraries in Your Code

If you can, it makes perfect sense to add open-source libraries to your code. This will help you to stay up to date with any changes in the libraries that could have an impact on your product. You’ll also be able to pick up or avoid any security concerns if you add this in, saving time and adding peace of mind.

5. Get Buy-In From Top Management

As a best practice, we recommend you check in with your management team on whether you can use open-source to build your software product. If you receive the go-ahead, make sure you’ve agreed on the percentage of open source you can use. 

The share of open-source code that makes sense varies across software companies for different reasons external to the product-building process. It’s best to discuss before you build a product that doesn’t quite fit in with expectations around open-source code usage.

Final Thoughts on How To Build a Successful SaaS Product with Open Source

If you want to build a SaaS product from scratch, open-source software can be an incredibly valuable option. You have nothing to lose by considering using this time-saving, cost-effective tool to design and refine your product. Ultimately, you’ll provide your customers with real value in the quickest possible time. It is relevant, however, to think of SaaS compliance. Make sure you are achieving global SaaS compliance to avoid headaches in the future. 

Also, maintaining a flexible pricing strategy will help you stay on top of the changes you make and tap into new revenue streams. Read our SaaS pricing guide to find out how you can turn monetization from a necessity to a lucrative growth tool. 

Are you just getting started with your products’ SaaS development? Wondering how you could then sell SaaS online? Then, by all means, click for more PayPro Global articles that will guide you through the process. We love to help, and we are always here if you need anything!


Frequently Asked Questions

Can SaaS be open source?

Yes, SaaS model businesses can be open source. People often mistake "open-source" for "no-cost,” which limits the need to monetize a product with licenses and other costs.

The term "open-source" refers to transparency around the software and SaaS development process and where one would find any issues arising from coding or other errors in a given software package.

What are the uses of SaaS applications developed using open source programming language?

Open SaaS uses an application that is developed using the open-source programming language.

This allows it to run on any operating system or database and gives customers more flexibility when choosing from multiple providers who can offer customized solutions tailored specifically to their needs.

What is the future of open source?

The future of open source is bright. Open-source projects are usually more collaborative, with developers helping each other to build better products.

Open source means that any developer can work on a project, not just the ones who have free time or want to work on it exclusively at their own expense.


Meir Amzallag

Co-founder and CEO of PayPro Global

Ioana Grigorescu

Content Marketing Manager at PayPro Global

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