For as long as there has been more than one computer system in existence, integration has been a challenge for vendors and users alike.

In the early days of IT, obstacles to integration were the result of proprietary hardware, data formats and/or file retrieval methods. IT specialists have spent the better part of ten years converting applications and files or databases from one proprietary solution to the next as organizations continually upgraded their computing capacity.

As the software as a service (SaaS) industry matures, companies have been faced with solving many classic industry issues all over again – security, performance, customization, reporting, analytics/intelligence and the age-old challenge of integration. One by one, the roadblocks that SaaS has faced have been overcome. The first and possibly the most disconcerting was security and the question of whether SaaS vendors could protect proprietary data. However, over the years, SaaS vendors continue to demonstrate that they have this solved, and in many cases, the security infrastructure in place in the data centers of the SaaS ISV’s is more robust than what the company could realistically manage themselves.


Customization was also another major roadblock to SaaS adoption. But that, too, has been conquered, since on-demand software has evolved from single-code applications to flexible SaaS applications that can be tailored to fit corporate needs and preferences.


The last hurdle to SaaS adoption is integration. New SaaS applications arriving in the market need to integrate with other SaaS applications as well as with on-premise applications. There is a major problem brewing, however: the integration experience for end customers is completely incongruent with the SaaS paradigm, particularly in terms of cost, complexity and time to implement.


Most SaaS independent software vendors (ISVs) offer great “enterprise-grade” functionality for $50 per month per user (or similar) – which customers can buy, log into and begin using immediately, only to be faced with an integration challenge that can take many months and tens of thousands of dollars to address. The once elegant solution is suddenly not quite the “no brainer” that companies would like it to be.


SaaS vendors have tried addressing the integration challenge in two ways to date – either through Web services or through requiring customers to perform custom coding. Though both approaches can work with significant time and money, the market is ripe for a third option: on-demand integration.


Are Web Services the Answer?


In the past, the general approach to SaaS integration was through the use of Web services. However, 17 percent of small to midsized businesses (SMBs) are already using more than one SaaS application, and most SMBs do not have in-house developers who would know how to use Web services.1 The truth is there are a lot of “enterprise” companies who don’t have these capabilities either.


Only 37 percent of firms using SOA technology have seen a positive return on their investment. In addition, the study found that SOA impacts only 27 percent of an average company’s IT projects.2


Once you get past the hype, the practical value that Web services provides is to expose or make the data available in the SaaS app in a secure and reliable way. This is one step in the process, but just one step.


Can Custom-Coded Integrations Address the Challenge?


Many companies make the mistake of achieving integration by building custom integrations. There are a number of problems with this strategy:


  • The cost and time involved are incongruent with the SaaS world.
  • The customer integration model cannot scale with your business. As you grow, you don’t want to be bogged down building Web services and custom integrations.
  • The maintenance of these custom-built integrations becomes complicated each time business processes or application programming interfaces (APIs) change.

Moreover, a backlog of implementation projects will begin to grow, and soon you’ll be unable to implement the complete business processes the company needs to run the business efficiently and effectively.


What is On-Demand Integration and is it the Answer?


In the last six months, a new form of integration has emerged – on-demand integration. In the on-demand model, integration is delivered as a SaaS application itself, allowing customers to log into a Web site, map integrations online with drag-and-drop ease, and then pay for only the connections they create. Organizations can build integrations that connect SaaS applications with each other, or they can connect SaaS applications to the organization’s on-premise applications that exist behind the firewall.


On-demand integration harnesses the convenience and availability of the Web to integrate applications – anytime, anywhere. Users can securely build, deploy and manage integrations directly from the Web using only a Web browser. Integrations are built visually with familiar point-and-click, drag-and-drop ease. No coding is required. Quite literally, business analysts can create integrations without any support from their IT staff.


This new approach has radically redefined the economics of purchasing integration capabilities. For the first time, companies are able to pay by connection and not for an entire integration software suite. Companies can employ the capabilities and functionality of sophisticated enterprise integration software at a fraction of the cost.


What’s the Right Answer for You?


There’s been a lot of excitement in the integration market about on-demand integration because it is driving down costs and increasing the ease of integration. Every company has unique needs, so one solution won’t fit all, and there are potentially times when Web services or custom integration will be the right answer for you. If you have a limited budget, limited development resources and you need integrations quickly, seriously consider on-demand integration. It provides the following benefits:


Scalability: Solutions that require software packages or hardware appliances to be installed and maintained on the customer’s site, or require integrations to be built and maintained by developers, are far less scalable than solutions that are delivered via SaaS. True on-demand integration requires no coding and no hardware appliances.


Speed: You will be able to integrate rapidly by logging into a Web console, setting up an integration with point-and-click ease, and then deploying it with a click of a mouse. No coding is required, and the process can occur start-to-finish within minutes.


Cost: Solutions delivered in a SaaS model have more flexibility in subscription pricing than the traditional license fee model. Customers pay per connection and don’t need to buy a full-blown integration system.


Ease of maintenance: By using an on-demand solution, users will benefit from the on-demand vendors competence in monitoring changes in application APIs and making adaptations accordingly. So rather than a customer having to account for changes to the API in their custom solution or Web service, the on-demand solution will automatically make any necessary updates to ensure that information is processed correctly after one of the connected SaaS applications changes. And, changes can be made to applications centrally and populated to all impacted installations.


Technical competence required: On-demand integration can be accomplished with in-house staff, requiring no development skills. Nondevelopers can build and maintain integrations without coding.


The Future of SaaS Integration


In addition to the short-term benefits of on-demand SaaS integration, there is a major long-term benefit as well. On-demand integration is expected to promote a more open dialog among companies to address integration pains.


Because on-demand integration is achieved online, companies can share helpful tips, adapters and code with other organizations. In much the same way that open source software is improved through collaboration amongst companies, the same can occur with integration. Users can create a knowledge base that is available to other companies, and in turn, they can benefit from that knowledge. They can build and share adapters, shortcuts, business processes, etc.


On-demand integration is still very young, but cross pollination of ideas is already occurring. The hope is that it will ultimately follow the path of other SaaS applications, exemplified by the user community that has built up around applications like The community itself has become an enormous draw and benefit for SaaS application users.


On-demand integration is already a powerful option for companies looking to derive value from an integrated enterprise. Done well, integration can not only be removed as a hurdle, but can become a great source of competitive advantage for your company in the market as well.




  1. Saugatuck Technology. “SaaS Adoption Tsunami: Redefining Software and Services.” Saugatuck Technology, March 27, 2007.
  2. Nucleus Research. “SOA’s ROI in the Enterprise is MIA, Nucleus Research Survey Finds.” Business Wire, August 20, 2007.

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