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What is iPaaS (integration platform as a service)?

What is iPaaS and why is it such a hot topic right now? Simply put, businesses are getting buried in business applications, including both core and specialty apps across finance, HR, supply chain, and customer service. In fact, the average business has an average of 250 software applications in use across their operations at any time.

When these applications and relevant processes are not properly integrated and managed, it means that data can’t easily be shared between them, leading to a lack of visibility across the enterprise. Integrated connections are also needed to support AI technology, automated processes and workflows, and updates that can be acted on in real time. That’s why the best businesses are increasingly leaning toward an integration platform as a service (iPaaS) to unify and digitise their business operations and add compatible solutions in a strategic way.

iPaaS meaning and definition

An integration platform as a service, or iPaaS, is a suite of cloud services that connect otherwise fragmented applications and processes across cloud and on-premise environments. Using prebuilt connectors and API management tools, they can help companies build, manage, and monitor integration flows across any number of applications, from any vendor.

Ultimately, an iPaaS is designed to help solve integration challenges – and make it easier to automate processes and share data across the business and across multiple organisations.

Importance of enterprise integration today

Early enterprise integration approaches used software to connect one application to another in a linear way. While this was a step up from working with completely siloed applications, it failed to integrate the entire enterprise into one consistent and secure framework. Building and maintaining these point-to-point application integrations were also time-consuming and resource-intensive. That was also true of legacy, on-premise integration systems.

With the explosive growth of enterprise applications today, both on-premise and in the cloud, a unified and systematic approach to integration has become critical to gaining the insights and agility needed to run a business and compete. Integrating and automating complex business processes is also a key milestone on the road to digital transformation, allowing teams to make faster decisions based on real-time information. An iPaaS helps creates these important pathways faster and without needing vast IT resources or dedicated development teams.

Benefits of iPaaS

Beyond making consistent, enterprise-wide connections, an iPaaS delivers a host of other advantages:

Faster integration through pre-built connectors, integration flows, and technology
A single version of data truth thanks to better communication between apps, processes, and systems
Adaptability to rapid change through “big picture,” real-time insights from all relevant sources
Seamless connectivity between cloud and on-premise systems
Centralised management in a single cloud solution that can be accessed from anywhere
Improved security and compliance through vendor-managed, enterprise-grade security and data privacy and protection features that meet industry-standard guidelines and regulations
Increased efficiency through a centralised management system

How an integration platform works

Like other “as a service” software, an integration platform is hosted by a cloud service provider who is responsible for providing software updates, high availability, disaster recovery, security, and technical support. The platform includes tools for developing and deploying integration flows without having to install or manage hardware or middleware. The iPaaS becomes a central place to create, manage, and modify application and process integrations across the business.

Modern platforms include AI and machine learning technology to help power development and make smart recommendations – as well as an event-driven architecture that supports scalable, high-volume transaction processing across a network of systems for greater situational awareness.

Types of iPaaS integrations

There are a number of different types of iPaaS integrations available depending on the vendor. Some focus exclusively on one area while others offer a combination.

Here are some of the most common integrations supported:

Cloud integration: Cloud integration brings together multiple hybrid or cloud environments into a single IT infrastructure in order to unify processes, systems, and applications. It supports building and running a variety of integration flows, process integrations, and message exchanges.
E-commerce and B2B integration: This type of integration automates communications and processes between customers, suppliers, and trading partners. Not only can it power more efficient and scalable e-commerce processes through a common view of customer interactions, it also paves the way for faster, more secure collaboration – for everything from invoicing to shipment tracking and beyond.
Business to government (B2G) integration: B2G integration supports secure electronic transactions and communications between businesses and government agencies. It also helps with standardising the digital registration of documents to meet regulatory compliance requirements.
Data integration and migration: With data integration capabilities, information from multiple sources is combined into a single structured and unified view. Data migration services actually move data from one system to another.
Application to application (A2A) integration: As the name suggests, A2A integration orchestrates the flow of data and functionality between discrete applications. It includes processes for keeping each application’s data in a consistent format, directing the flow of activities, and providing a single interface to use both applications.
API integrations: This type of integration makes it possible for two systems to share data and communicate securely with each other automatically through each system’s application programming interface. Once connected, these systems can interoperate in real time and be accessed remotely to save time and money.
API publication and marketplace: This type of integration supports defining, publishing, and monetizing APIs for business partners on internal and external developer portals, catalogs, and marketplaces. This can be used to monetize new business models and services, the way Uber did when they leveraged their existing application infrastructure to expand into food and then freight delivery.

The types of integration needed by an organisation will factor into their selection of an iPaaS provider. Another factor is the combination of capabilities offered.

iPaaS examples: Features and functionality

To help companies integrate their on-premise and cloud applications faster and support real-time synchronisation, most enterprise iPaaS platforms feature a robust tool set that requires little to no programming. Here are some of the most common:

Graphical development of integration apps: With graphical development iPaaS tools, integrators can use drag-and-drop connectivity components, widgets, and business logic to quickly develop integration apps without the need for custom coding.
Integration connectors: Most iPaaS vendors provide a library of connectors, pre-built code designed to connect and interact with specific apps or data sources. These will usually cover common endpoints, but can also include third-party connectors and generic standards-based connectors such as REST APIs.
API management: This capability lets you manage the design, development, security, and lifecycle of APIs across multiple platforms. This usually includes monitoring and analysing their usage, performance, and any errors that may arise.
Event mesh: Support event-driven processes and architecture with features that allow applications to communicate through asynchronous events, such as when information in an app is added or deleted – or when a customer places an e-commerce order. Event-driven integration can help organisations rapidly meet business demands and changing conditions.
Guided integration: Some iPaaS providers offer a guided methodology for defining and executing a winning integration strategy, including determining the right mix of tools, integration flows, and approaches. This can take the form of predefined integration patterns and architecture blueprints, as well as standardised best practices.

Future of iPaaS

After a rapid growth spurt of 72% in 2017, the iPaaS market is growing at a rate of about 21% year over year according to Gartner analysts – and it has already become mainstream with 20% to 50% of the target market using it for rapid and automated integration.

With new applications and business models arising all the time, the technology will likely become even more ingrained into an organisation’s software landscape. AI, machine learning, RPA, and advanced analytics will continue to augment integration capabilities, automating complex integrations for even faster response times. More zero-code options will make iPaaS accessible for every type of business user and business.

iPaaS solutions from SAP

Our iPaaS is SAP Integration Suite, a recognised leader in the market space. To help organisations solve their biggest integration challenges, our cloud-native iPaaS software provides a multitude of integration tools and pre-built content as well as AI-powered development and guidance. With over 2,600 prebuilt integrations, more than 170 third-party application connectors, and 140-plus business events, it streamlines integrations to any SAP and third-party system including applications, B2B businesses, and governments. With its API-first approach, the iPaaS platform can integrate applications and processes across diverse landscapes and ecosystems – and also pave the way for offering profitable new services. It can also process billions of messages and API calls each month for ultimate scalability.

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iPaaS FAQs and related terms

EiPaaS is another term for iPaaS coined by the analyst firm Gartner to describe enterprise-grade integration platform as a service offerings.

ESB stands for enterprise service bus. It is used to integrate applications through a centralised, on-premise IT architecture (the "bus") that allows each app to send or receive data from other connected applications.

An ESB is typically run on-premise as an approach for integrating local or legacy systems. An iPaaS, on the other hand, is usually run in the cloud and can integrate both cloud-based and on-premise applications, including those from third parties.

SOA is used in software development to create business applications that can more easily communicate with other applications through the use of services components. Each service or component can be reused in different systems or be combined to tackle complex tasks.

API management is a set of processes and technology that allows companies to build, run, and analyse APIs in the cloud.

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