Don’t Make Integration My Problem!”
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
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