What You Should Know About iPaaS

An Integration Platform as a Service, iPaaS for short, is a range of cloud services. They let an organization create, use and monitor data streams without needing to operate their own integration platform. It connects processes, services, applications and data within an organization’s own IT environment and beyond, including clouds. Using an iPaaS can help you meet your long-term cloud integration goals.

What exactly is an iPaaS and how does it work? What are the advantages and disadvantages of an iPaaS? What types of iPaaS providers are there? And most importantly, how do you find the right iPaaS solution for your business? Learn all about iPaaS here.

iPaaS stands for Integration Platform as a Service. Based in the cloud, it lets companies connect data, applications, processes and systems neatly, coherently and transparently. This allows companies to reap the benefits of modern and efficient cloud integration, namely seamlessly networked, reliable business and IT processes.

You often hear that using an iPaaS simplifies cloud integration work and makes it more accessible. Employees who need to perform integration tasks require little or no programming knowledge. This is embodied by the new role of the citizen integrator.

iPaaS is a coordinated collection of cloud services that ensures that data, applications, services and processes work together in a largely automated manner, both within a company and between organizations.

iPaaS means that a provider offers integration services on a public or private cloud. The integration platform has a full IT infrastructure, including solutions and tools for integration work, available online. The provider is also responsible for maintenance, updates, upgrades, security, and the scalability and reliability of the platform.

Companies using an iPaaS are only responsible for developing business processes, mapping and configuration work. The platform operator takes care of the rest. This lets companies concentrate on their core business. An iPaaS also lets you connect almost any third-party applications, services, and databases to an ERP or CRM system. This is useful when integrating clouds, SaaS or following a multi-cloud strategy.

Alternatively, the ERP or CRM system itself can be included in an overarching network such as a Hybrid Integration Platform (HIP) in a multinational company with subsidiaries, affiliates, and an ecosystem of customers, suppliers, and other stakeholders.

The iPaaS market contains providers of different sizes, offering services of varying depth.

Some iPaaS providers attempt to appeal to the broadest possible customer base with their services. Their clients will include small companies and start-ups as well as large international companies. These iPaaS providers tend to be large, well-known IT service providers.

Others are service providers that specialize in niche needs – also known as domain-specific iPaaS. An example would be reporting internationally traded goods, to national customs authorities (e.g. the EDI Service for SAP GTS) to ensure they comply with national regulations.

These niche providers tend to be smaller companies or start-ups. In practice, however, the boundaries are often blurred and many iPaaS service providers attempt to cover more than one sector.

Another category of iPaaS vendors is larger midsize companies that have a background in iPaaS-related services. This may be on-premises system integration or B2B integration. Over time, some of these companies have added both enterprise and domain-specific iPaaS solutions to their service portfolios. They regularly expand the breadth and depth of their offerings.

The number of active iPaaS providers worldwide is currently in the low hundreds, and is growing.

iPaaS in its current form is already over a decade old. The origin and growth of this integration method is closely linked to the growth of cloud computing and SaaS.

The first iPaaS providers

When the first SaaS providers entered the market, their customers needed help integrating cloud-based software solutions with each other and with their existing IT landscapes. The first iPaaS providers saw an opportunity there. They approached SaaS providers and offered them partnerships.

As a result, iPaaS providers benefited by not having to acquire customers. The SaaS providers benefitted as they could reduce – or even fully delegate – their integration work. This win-win situation fuelled the growth of both parties.

Source: https://lefthook.com/blog/ipaas-isaas-brief-history-acronymic-sin

iPaaS is thriving: large software vendors are at the helm

As the IT world has become more complex, iPaaS approaches have evolved. New areas have emerged, including cloud-to-cloud, IIoT-to-on-premises and iPaaS-supported EDI. As a result, major software vendors such as SAP, Microsoft or Oracle started expanding their SaaS portfolio.

After working with iPaaS vendors for a while, they bought them out or developed their own iPaaS solutions. They wanted to make cloud and SaaS integration easier for their customers by closely integrate their own cloud solutions with their on-premises solutions.

Large providers have another advantage: they can scale via their partners or their own huge customer base. However, integrating third-party systems remains problematic with these approaches. This is why numerous other iPaaS providers have emerged in recent years with a focus on niche requirements. The domain-specific iPaaS providers mentioned above fall into this category. This all equates to a highly competitive market.

iPaaS: Choosing the right supplier in a dynamic market

If a market has growth potential, large providers often try to secure the lion's share while smaller providers occupy the niches. The smaller iPaaS providers therefore tend to have very specific knowledge in cloud or SaaS integration. This is often limited to one domain or even a sub-domain. Other providers position themselves somewhere in between.

Due to the continuing growth of SaaS and other cloud services, the integration services market remains attractive, drawing further providers to this market to get a piece of the pie. This could eventually lead to oversupply, after which the trend should reverse until it balances out.

It is therefore likely that many iPaaS vendors – particularly the smaller ones - will be bought out, will change their focus, or go out of business. It is critical to be aware of this when choosing an integration partner as it increases the risk and the potential of further costs. You also need to consider that it is difficult to transfer one provider’s mappings, workflows, and configurations to another.

Companies should therefore fully consider these issues before choosing an iPaaS partner. Chapter "Choosing the Right iPaas Solution for Your Organisation" on selecting the right iPaaS solution takes a closer look at this topic.

An iPaaS’s main strength lies in its ability to connect almost any combination of various data, applications and processes, and to integrate these across different IT environments. The most important environments or integration domains are:

iPaaS is a newer way of integrating applications and processes, whether these are on premises or in the cloud. There are also older methods that are still used to a certain extent.

iPaaS is naturally not without its disadvantages. Although these are not limited to iPaaS, you need to be aware of their implications when choosing a sustainable integration method.

The main benefits of iPaaS are as follows:

A good iPaaS solution already covers a great many use cases in today's business world. It is often at the core of a modern integration strategy and may even fulfil the greater majority of a company's integration needs...

Nevertheless, many companies will not be able to make an iPaaS the centre of their integration strategy overnight. They will still have the obstacles of an existing integration jungle and an industry-specific or company-specific system or two to integrate. There are many reasons why the corporate world still relies on conventional integration technologies. Abandoning them prematurely would not make economic sense.

Many larger organizations, for example, already have in-house ETL/hub and spoke/ESP platforms, alongside specially trained personnel for these. In other companies, the point-to-point integrations are still doing their job well enough.

Even iPaaS solutions sometimes need supplementing, for example with a stand-alone  API management platform. You may also find that the connectors you need for new or niche SaaS applications are have not (yet) been developed. Essentially, you need to look at your IT ecosystem as a cohesive whole.

An iPaaS is a building block, albeit an important one, which must fit into the big technical and strategic picture long term. The result is often termed hybrid integration platform (HIP). As digital transformation continues to take root, iPaaS will most probably play an ever more significant role for many companies.