Enterprise 2.0 

SaaS Customers: Don't Make Integration My Problem

By Robert L. Moul, President and CEO, Boomi , 08/27/2008

Print this article Email this article Talk Back! Write to Editor

The Software-as-a-Service (SaaS) industry is changing due to popular demand. Consumers of SaaS applications are pushing back on independent software vendors (ISVs), saying in essence, “Don’t make integration my problem. I’m buying your application as a service and I want integration included.” Gone are the days when customers would subscribe to a SaaS application for $50 a month and then be willing to pay tens of thousands of dollars to integrate that application with the rest of their portfolio.

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 the SaaS technology itself but in the attempt to use conventional integration products and appliances for SaaS integration. Conventional integration products were built for traditional on premise software implementations – not SaaS.

The fundamental limitation of conventional integration products (whether hosted on premise or “in the cloud”) is that they are single-tenant. Each customer must buy, install and maintain its own copy of the product and must do so at every location where integration occurs. 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.

Several events this year, including the acquisition of Cape Clear by Workday, signal the beginning of a trend that will profoundly impact the SaaS industry. ISVs are looking beyond conventional integration strategies because they’re simply too costly, complex and time consuming to be effective in the SaaS ecosystem. At the same time, the strategic importance of integration is rising.

Workday recognized that integration is not just an additional customer requirement that must be addressed, but it is in fact a critical and central part of its solution – a real competitive differentiator. Integration is the lynchpin of successful SaaS deployments. A recent Saugatuck survey underscored this point. Survey respondents ranked the ability to integrate SaaS and on-premise workflows as the number one business consideration when selecting a SaaS provider.

Choosing a Strategy that Works

1

• Next