Every successful digital transformation initiative begins with data integration because all digital companies are data-driven. The consensus is that the future of integration is through a hybrid, cloud-based platform model, also known as integration Platform-as-a-Service (iPaaS).

The name is a little misleading as iPaaS comprises several platforms and is “a set of automated tools that integrate software applications deployed in different environments. Large businesses that run enterprise-level systems often use iPaaS to integrate applications and data that live on-premises and in both public and private clouds,” according to TechTarget.

It has to be hybrid in nature because integrations need to span legacy applications, systems, data and integrations, and the cloud-native environment as enterprises’ cloud migrations gather pace. iPaaS can connect applications that are run locally (on-premise), in the cloud, or across clouds.

A platform approach is an obvious choice because it is the most successful method yet devised to bring disparate technologies together and scale them using APIs. These APIs can be replicated and reused limitless times – think LEGO® bricks – allowing speedy, automated configuration rather than customization, which is forever a time-consuming, manual task to maintain and update.

Enterprises around the globe spend trillions of Dollars or Euros on IT every year. Estimates suggest that 38% of IT teams’ time is spent on designing, building, and testing new custom integrations between systems and data. The labor involved in each custom integration costs an average of $3.6 million. Large organizations could have thousands or tens of thousands of integration points, and custom integrations don’t scale.

For integration to play its pivotal role in digitalization, it must itself be transformed. iPaaS is an increasingly popular choice because it can impact many aspects of businesses by supporting autonomous integrations that reduce cost, eradicating many repetitive, manual tasks. Verified Market Research says, "The growing awareness and adoption of iPaaS among business enterprises is due to the promise of its cost-effectiveness and use of cloud-based systems to manage soaring quantities of data."

Its recent Integration Platform As A Service (IPAAS) Market report found the global iPaaS market was worth $2.57 billion in 2020 and predicts this will rise to $27.1 billion by 2028, with a compound annual growth rate of 37.2% between 2021 to 2028.

Despite these strong business and operational cases for modernizing integration, technology is only part of the transformation challenge and not an automatic guarantee of success. This white paper looks at how iPaaS can make a big difference and how enterprises can make the best possible return on their investment (ROI).

Introduction - Why iPaaS is increasingly the modern integration solution of choice

Integration is a Herculean task for enterprises that are in the throes of digital transformation themselves. It involves thousands or tens of thousands of integration points, multiple generations of systems, and a mishmash of integration technologies and approaches and their transition to a cloud-native environment. No surprise that most are finding it challenging.

The MuleSoft 2022 Connectivity Benchmark Report (in conjunction with VansonBourne and Deloitte Digital) found that:

  • Data silos are a persistent challenge for 90% of organizations
  • Companies have more applications than ever (976, up by 133 since last year’s benchmark) but are less successful at integrating them (only 28% are integrated, slightly less than last year) as they grapple with siloed data, legacy code, and systems
  • There is an acute skills shortage
  • On average, IT departments are being asked to deliver 40% more projects than in the previous year
  • 52% of IT projects were not delivered on time in the 12 months preceding the research
  • Existing infrastructure is acting as a bottleneck
  • More than a quarter (26%) of business leaders demand a company-wide API strategy
  • The number of firms using APIs to build integrations has not increased since the previous year’s report, although, on average, 35% of organizations’ revenue is derived from APIs and related implementations
  • Companies are recognizing that the combination of API-led connectivity and automation can deliver better employee and customer experiences
  • The growing number of applications combined with current custom integration practices are an increasing technical debt, with organizations spending more than $3.6 million on average for the labor involved in custom integration versus $3.5 million the previous year
  • 88% of respondents said that integration challenges are slowing or hindering digital transformation to some degree
  • Respondents estimated that 38% of it teams’ time is spent on designing, building, and testing new custom integrations between systems and data

To fulfill its pivotal role in digitalization, integration must itself be transformed to take advantage of new technologies and models to secure a better return on investment. This is where iPaaS comes in, which Gartner defines as "a suite of cloud services enabling development, execution and governance of integration flows connecting any combination of on-premises and cloud-based processes, services, applications and data within individual or across multiple organizations."


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