Midsized companies face a complex problem -- how to connect software-as-a-service (SaaS) applications with each other and with backend systems.
Without a ton of IT resources or financial slack to invest in expensive and complicated software-based integration tools, the cards are certainly stacked against them. Nevertheless, midsized companies using SaaS must integrate their core applications in order to keep risks low, costs down, and schedules short. Already $1 out of every $3 spent by companies on IT goes toward integration projects, and Gartner Inc. predicts that in the next few years application integration projects will increase in both scope and number.
Currently, there are three ways to integrate applications. The first is through enterprise application integration (EAI) tools. The second comes through custom coding. But the third (an emerging method) consists of pre-built integration templates that connect applications.
Cast Iron Systems, a SaaS-integration software and hardware vendor, recently released a whitepaper showing the benefits of these pre-built solutions. The company suggests pre-built systems provide bidirectional, real-time integration between other SaaS software like those provided by Salesforce.com and Oracle, regardless of where these applications are hosted. But before diving into one, Gartner analyst Benoit Lheureux issues a few words of caution.
"The point I made in my Cloud and EDI -- The Ultimate Mashup post was that the cloud and EDI world will soon be IT's biggest mashup ever," Lheureux says. "Expect some cross-pollination. But who ultimately will be the [integration as a service] winners? Native members of the new cloud ecosystem? Incumbent carriers of most supply chain traffic today? Or yet others, jostling now to govern cloud interactions? In the end, will the steaming compost heap of B2B nurture the cloud?"
Lheureux also notes that cloud-computing providers are forging relationships with companies like Cast Iron as well as Boomi, Informatica, Pervasive Software and other emerging purveyors of cloud-enabling IaaS, to modernize their networks and establish business intelligence systems across billions of transactions. So, what does this mean for midmarket companies? More opportunities, actually.
A Web survey conducted in 2009 by Saugatuck Technologies shows that companies are only just beginning to consider the implications of a future hybrid environment, wherein multiple SaaS offerings and existing in-house applications must effectively coexist.
In defense of its "pre-built is better" theory, Cast Iron does note that EAI and ETL (extract, transform, and load) tools are "like using a chainsaw to open a letter," and that playing with custom code not only monopolizes specialist skills, but also is not reusable, does not provide visibility into integration transactions, is rarely scalable and flexible, and is expensive in the long run.
"The trend of hosted solutions for enterprise applications will likely help midsized businesses gain important abilities, however there remains one huge problem -- the benefits of these applications can only be realized when they are fully integrated with other business software," says Cast Iron whitepaper author David Meader. "Two (or more) applications that solve a single business need must be able to share data and business rules seamlessly, in real time, with reliable performance, visibility, and scalability."
For example, Meader says with pre-built solutions, a field sales representative who can see that the customer he's been spending time selling to has not paid his bills and is on "credit-hold" in the billing system, might want to re-prioritize his activities accordingly. Or, manufacturing and materials management groups can gain early visibility of an impending, downstream surge in orders and use this information to adjust production schedules.
Whether it's comprehensive software from EAI vendors or pre-built integration templates, as spending picks up in the midmarket, it's a safe bet that you'll be hearing more about SaaS integration.
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