Changes from Cloud-based Data Integration

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What Is Happening?

Cloud-based technologies and offerings are the arena in which data integration is evolving from a simple means of transmitting information between applications into complex business capabilities that enable improved competitive necessities and advantages for enterprises.

Enterprise choices of how to leverage this new role will affect their own costs, their abilities to improve business operations, and their abilities to compete effectively. Providers’ choices of how to utilize this new role, and what to offer, will affect their core business positioning and profitability.

Saugatuck has been researching changes in Cloud-based IT integration for several years. One of the hottest topics in recent months has been the role and abilities of Cloud and Cloud-based providers in helping enterprises to integrate and take advantage of the many types (and huge amounts) of business data that are created daily. Much of the recent market interest has been around the Cloud enablement of affordable Big Data analytics, and rightfully so. But Cloud is also enabling much more enterprise data use and management improvement, especially through integration of different data types across multiple business functions, units, apps and platforms.

To over-simplify, the economics of Cloud both allow and require a much greater and wider range of data integration than most enterprises (and SMBs) could afford to implement via in-house routines. In Saugatuck’s view, data integration providers and offerings are key agents of change in Cloud IT and Cloud Business. This is because Cloud-based data integration services/tools enable new ways of using data that in turn enable new ways of solving business problems and new ways of doing business, including the following:

  1. Cloud-based integration services and platforms form a natural hub/focal point where data comes together. This makes them natural, logical locations for business analytics. Centralizing and coordinating business analytics enables greatly-improved access to data from multiple premises-based and Cloud-based applications, improved data version control, and more effective standardization of data and analytic processes/operations (“The Role of Service Delivery Platforms in the Quantified Enterprise™”). It also enables improved economies of scale that can reduce the costs of, and therefore increase the adoption and use of, standardized and coordinated business analytics across enterprise hierarchies and functional groups.
  2. Cloud-based data integration offerings can and are being utilized and imbedded within platforms / services that enable and deliver a range of rich application and data environments. These platforms deliver the “peaceful coexistence” of a wide range of data, apps, and providers. Capabilities that would normally be sourced from different providers or different Clouds and used individually can be more easily sourced, integrated, coordinated and managed by enterprises or by other services providers (“Cloud Selection: Acquisition of Integrated Systems”). The results are changing how enterprises, applications providers, and Cloud platform providers do business.

Why is it Happening?

Cloud economics are the primary driver of these changes. The increasingly-mainstream ability to write once and deliver dozens, hundreds, or thousands of times makes it cost-effective for providers to develop and deliver leading-edge capabilities, and for customers of all sizes to afford them. Saugatuck sees it as normal for the development, delivery, and use of such capabilities to be accomplished at between 10 and 30 percent of their traditional costs by taking advantage of Cloud-based technologies and services.

As a result of this, we see data integration functions and capabilities increasingly being imbedded into business application marketplaces; into SaaS, IaaS, and PaaS offerings; and being integrated into private Clouds as well. Our analysis indicates that integration-centric providers such as IBM Cast Iron and Dell Boomi are among the best-positioned providers as the market moves inexorably toward an integration-enabled future, with a wide range of additional players playing up and down the stack (e.g., Informatica, Pervasive, Scribe, Mulesoft).

Building on Cloud-based economies of scale, the other key factor shaping Cloud-based integration adoption and use is the traditional choice for enterprises regarding whether to build, rent, or buy solutions and capabilities. The growing range and number of Cloud-based integration offerings and capabilities has more enterprises trying different and multiple means of adopting and using data integration, in areas where it had not been cost-effective or technologically effective. As enterprises (and SMBs) learn more about what can be done, and how it should be done, the adoption patterns, and the business value, of Cloud-based data integration will continue to shift and evolve.

For an extended version of this Research Alert, visit Saugatuck Lens360.

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