Integration is a Game Changer for SaaS Vendors: Invest or Get Left Behind

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Companies are accelerating and should continue to invest in integration to better bring together data and deliver new experiences to customers.

Business migration to the cloud in all forms is accelerating with the pandemic to support remote, globally distributed teams, workloads, employees, customers, and partners. This has accelerated the adoption and usage of SaaS applications by companies. Gartner projects that global revenue from public cloud technologies will reach $330 billion by 2022, up from $180 billion in 2018. SaaS will win the market with $144 billion, an increase of 80 percent. Even more promising for SaaS vendors is the projected total spend on cloud software over the next few years: a colossal $350 billion.

Despite these high projections, the pandemic has had executives revisit their budgets to prioritize their investment. However, instead of cutting back on integration services, IT companies are accelerating and should continue to invest in integration to better bring together data and deliver new experiences to customers. Integration allows companies to stay competitive while also helping vendors achieve their speed-to-market.

See also: Combatting the Data Deluge with Real-Time Insights Through the Cloud

But Is There a Problem?

The pandemic has brought great challenges to vendors. Additionally, rival apps are coming out of nowhere as businesses recalibrate their software stacks by parting ways with unproductive apps. How can vendors respond to this double squeeze and differentiate themselves?

To meet the challenges posed by the pandemic, the market is seeking speed, flexibility, and a coherent user experience. This is why headless architectures for CMS and e-commerce are making such an impact, as they allow developers to create their own experiences and domains without being under constraint by design. By decoupling the backend from the user interface (UI), developers can make rapid changes and innovate flexibly without getting in each other’s way.

A recent adaption of this approach is “headless integration,” where SaaS developers embed integrations into their front end without having to program them from scratch. Known as “embedded integration,” it solves a problem for both SaaS vendors and end-users: vendors achieve the speed-to-market they need to remain competitive, while end-users become more productive as they access and experience their favorite apps from one UI.

Integrations are complex, and it is not feasible for vendors to build these integrations themselves. Companies must work together now more than ever to lean on each other for expertise and collaborate in back end processes. It is also important to explore embedded integration, how it works, and why it is a breakthrough solution, both for SaaS vendors and the markets they serve.

I Want It All – But Do I Need It All?

The more apps you have, the harder it gets to move information swiftly and meaningfully between them. The number of apps the “average” business operates is difficult to determine since most CIOs have incomplete control over what sales, marketing, HR, and finance subscribe to independently. But we all know it is a lot of applications to keep track of, and even harder to pinpoint what apps are helping your business, which might be hurting your business, and what might be losing you money.

A recent survey (no survey is referenced?) concludes that businesses with between 200 to 500 employees have 120 apps. Smaller businesses or start-ups without legacy-status have fewer, but they too accumulate SaaS products quickly and juggle an average of 40 cloud applications.

SaaS applications spread like wildfire because it is the place for new innovative solutions and aligns with the market move to the cloud. However, the lack of integration, which forces end-users to go back and forth endlessly between the apps, data silos, and manual data updates, is disruptive because it corrodes productivity. Almost 70 percent of employees say they spend up to an hour a day navigating between apps—a whopping 32 working days a year.

An app is only as brilliant as its commercial viability, and in the end, SaaS developers have to give end-users want they want. Process mining platforms can help companies take a step back and re-evaluate what apps are working for them and which aren’t. Process mining can also assist organizations in answering questions like: Did integration work with this vendor, or should we find another? Does my whole company know how to use this app? Are we even analyzing the data that we’ve been able to gather from these systems? How is this app impacting ROI and our overall revenue?

SaaS application developers clearly understand the value of integration.

Integrations Are Becoming More Important

SaaS application vendors can build their own integrations or embed them in their applications, but they are failing as integration is a complex problem. Integrations take time, and a vendor that can sidestep them gains a considerable head start on its rivals.

The attractions of owning and customizing your own integrations soon collapse under the weight of what that involves. You have to drag your developers away from their real jobs to write and maintain code, not once but over and over again for each and every integration, and you need connectivity with 10, 20, or more third-party apps to make your product stand out. That’s a lot of work to develop and maintain. And as we said, each app, and so each integration, is unique—there are no real economies of scale. Integrations never end. They will continue to divert time, talent, and money from where your focus should really lie: your core product. One distraction associated with integration maintenance is that APIs have to be monitored regularly to ensure (multiple) integrations do not break, a routine task for which most developers have little natural affinity and absolutely no enthusiasm.

Why Embedded Integration is a Game Changer for SaaS Vendors

Embedded integration solves a problem for both vendor and end-user. For vendors, it solves the problem of building custom, native integrations. Embedded integration solutions usually provide out-of-the-box connectors to the most popular SaaS applications, databases, and traditional applications, so these integrations can be brought in-app even without the need for a developer.

This greatly reduces the development and maintenance costs related to integrations—and accelerates the vendor’s time to market because the integrations are delivered so much faster. Embedded integration makes the app being updated or launched much more attractive to end-users, who do not have to step out of their UI to connect and work with their other favorite cloud apps.

The more third-party apps you can corral into your product, the greater the engagement of the end-user with your app. The point is, end-users want and need these integrations because the dizzying back and forth between applications has become unsustainable. 

The Benefits of an Embedded Integration Machine

A cloud-based embedded integration engine makes it much easier for vendors to give end-users broad and universal integration with third-party apps they are demanding. With embedded integration, vendors reinvent existing apps or increase adoption of new products by empowering end-users to interact with go-to apps without having to go anywhere, but work uninterrupted from within your application experience.

Embedded integration helps vendors embed productivity within their apps. These products help eliminate integration silos, allowing organizations to stay connected to their critical applications and information during the transition to the cloud. In a time where connections are proving to be more important than ever, integration solutions allow clients to increase their activity speed, reduce business latency, and provide the best cloud experience possible for their customers.

In The End – The Investment is Essential

Embedded integration is a transformative development. It resolves what you might call the standoff between SaaS vendors who need to innovate rapidly to stay alive and end-users who want their apps to be productive, not hold them back. Integration is key to this, but neither vendors nor end-users want to be distracted by time-consuming integration projects.

For SaaS application developers, embedded integration means that they can plug, brand, and customize their connectivity with third-party apps without having to write the entirety of the code or maintain complex integrations going forward. This puts them well ahead of rival innovators who are building integrations from scratch—and who, once they are built, have to commit resources to hosting and updating them.

Embedded integration is a breakthrough in its infancy, but one that will soon make an impact because it is so smart and hits a sweet spot for both vendors and end-users, and is making work more efficient during the pandemic and in a post-COVID world.

Suraj Kumar

About Suraj Kumar

Suraj Kumar is General Manager API, Integration and Microservices at Software AG.

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