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The Ultimate Guide to Integration Platform as a Service (IPaaS)

For digital transformation, businesses need to deploy different technologies on cloud or on-premise. However, integration of these technologies is a challenge. According to Ascend2’s survey, integrating data across technologies is the most challenging barrier to success for 44% of marketers.

IPaaS solves integration issues by delivering a unified solution to businesses. It acts as a middleware for communication between multiple systems by enabling integration and data sharing. As digital transformation adoption increases, we expect iPaaS to become crucial for every business model.

What is IPaaS?

Integration platform as a Service (IPaaS) is a hybrid integration platform that connects software applications in different environments. An iPaaS enables users to integrate projects that involve any combination of endpoints existing on the cloud, on-prem servers, mobile devices or Internet of Things (IoT) devices. The integration interfaces include APIs, flat files etc.  

Why is IPaaS important now?

Source: Blissfully

Companies deploy software and hardware more than ever. Yet, integrating these tools to legacy enterprise systems and to each other is the real challenge. Procurement teams should check the integration capabilities of these tools if they want software that works perfectly with other applications their business uses.

Although IT teams are capable to handle integration themselves, there are also challenges of this approach. For instance:

  • In order for the IT team to handle integration, first, you need an IT team. Considering even SMBs use 20+ paid SaaS products and 30+ free SaaS products on average and IT is the second-largest area for businesses to address potential skill gaps, the SMB may lack the budget to fulfill the IT talent gap.
  • Manual integration of devices takes time and effort. Using an IPaaS provider can help businesses handle the task faster and more efficiently.

What is the level of interest in iPaaS?

All the advantages listed above increase the interest in iPaaS solutions. Below you can see how interest in iPaaS changes over time based on Google search data.

How does iPaaS work?

iPaaS vendors provide the infrastructure to create integrations and deploy applications within the cloud and on-premise. Vendor helps configure the parameters such as APIs, prebuilt connectors, or some other rules that are allowed on the platform.

Once these rules are set, iPaaS creates a central ecosystem to view, manage, and modify all data, infrastructure, and operations. This enables businesses to modify their product, share data, and launch solutions to the market.

What are the capabilities of iPaaS?

Some of the key capabilities of an integration platform are the following:

  • Integration enablers:
    • Connectors and adapters include communication connectors and application connectors supporting various communication protocols.
    • Data mapping and transformation: The process of matching and formatting fields from multiple datasets into a centralized database. 
    • Routing and orchestration: The process of integrating two or more applications or services together to automate a process, or synchronize data in real-time.
  • Integration lifecycle management: Easy to use tools to maintain integrations as system interfaces change, old systems get decommissioned and new applications are introduced to the company.
  • Integration monitoring and management: Monitoring integration health real time to ensure correct data and process flows

What is iPaaS use cases?

Data Integration

Many businesses use a variety of data management systems which lead to the existence of various data formats within an organization. There are many things that can go wrong during data integration. For instance,

  • Every data exchange is a potential point of vulnerability.
  • If APIs are poorly designed or implemented, data can be compromised.
  • If data transfers are not successfully completed, data can be lost or damaged in the process.

iPaaS addresses all of these challenges, making data integration and workflows more reliable, efficient, and secure.

Application/ System Integration

System and application integration is the most common use case for an iPaaS, Though traditional enterprise application integration solutions can create the necessary bridge between applications, iPaaS have improved the speed of development and deployment of applications.

Business Process Integration

An iPaaS serves as a BPA solution since it automatically connects two or more applications with each other. Traditionally, large enterprises used an Enterprise Service Bus (ESB) to achieve business process integration. However, iPaaS is a more versatile solution that can be used for a variety of integration cases besides process integration.

B2B Data Integration

Businesses may need to exchange business-critical information (e.g., purchase orders, invoices, booking requests, custom status information, etc.) with their ecosystem of trading partners electronically.

Traditional business-to-business (B2B) integration tools, like Value Added Networks (VANs), are expensive and require effort, and expertise to set up. Moreover, the growing risk of cyberattacks raises concerns on the security of third-party B2B data connections. iPaaS enables cost-effective, fast, and secure integrations between businesses.

IoT Integration

IoT applications disrupting various industries with their ability to collect data from thousands of IoT endpoints. However, IoT networks require the integration of these endpoints including sensors, sensor data APIs, cloud-based IoT platforms, and API for ERP connection. IPaaS enables the high-speed cloud servers and horizontal scalability that an IoT network requires.

Integration software ecosystem

While few applications are classified as iPaaS, there are numerous approaches to integration including:

If you still have questions on IPaaS, don’t hesitate to contact us:

Find the Right Vendors

Sources: Youredi

Access Cem's 2 decades of B2B tech experience as a tech consultant, enterprise leader, startup entrepreneur & industry analyst. Leverage insights informing top Fortune 500 every month.
Cem Dilmegani
Principal Analyst
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Cem Dilmegani
Principal Analyst

Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.

Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.

Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.

He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.

Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.

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