Most analysts covering the SaaS industry today would agree that integration is the number one barrier to the adoption of SaaS technology. The problem lies not in SaaS technology itself but in the attempt to use conventional integration products and appliances for SaaS integration. It’s a technology mismatch. Conventional integration products were built for traditional on premise software implementations – not SaaS.
The fundamental limitation of conventional integration products (whether hosted on prem or “in the cloud”) is that they are single-tenant. As such, each customer must buy, install and maintain its own copy of the product and must do so at every location where integration is to occur. As a result, using conventional integration products to integrate SaaS greatly increases cost, complexity and time to deploy while also greatly limiting scalability. To date, ISVs have had little choice but to pass that cost and complexity on to the end customer. The underlying premise of this model is that integration is the customer’s problem to figure out.
There is a better way. On-demand integration solutions are themselves built using SaaS technology. Just like SaaS applications, they are a single instance, multi-tenant platform hosted in the cloud. There is only one platform and all customers use that platform for integration. As such, they natively deliver all the great values of SaaS: rapid time to deployment, faster innovation cycles, ultra-low cost and infinite scalability. And they have a dramatically reduced cost structure because everyone leverages one platform.
On-demand integration solutions also eliminate the cost and hassle of maintaining and upgrading each instance of a conventional product. In the on-demand world, upgrades and enhancements to the common platform are continually released to the user community and everyone enjoys the benefits immediately. On-demand integration solutions finally align integration cost with that of on-demand applications – an issue which has been a major barrier to sales for SaaS ISVs.
But most importantly by employing an on-demand integration solution, ISVs can lift the burden of integration off the shoulders of the end customer. On-demand integration solutions allow SaaS ISVs to offer bundled and pre-built integration as a service – solving integration on behalf of the customer. Since the customer is buying the application as a service it only makes sense to buy the integration as a service.
SaaS ISVs have the following options in developing their strategy for integration:
1. Continue to resell conventional integration products and appliances
2. Sell professional services engagements and build custom integrations
3. Build an on-demand integration infrastructure on their own
4. Partner with on-demand integration vendors to package integration for their clients
It’s a classic build/buy/partner decision, but partnering has the advantage of allowing the ISV to stay focused on its core business and to take advantage of an existing on-demand integration solution and get to market quickly with a bundled integration offering.
Forward thinking SaaS ISVs are already moving in this direction. Integration is quickly becoming a strategic imperative and source of competitive advantage. Consumers are flocking to the SaaS paradigm because it saves them time and money, and by providing integration as a bundled part of an application, ISVs can offer a great service to their customers while increasing win rates and accelerating sales.
