So-called neutrality from start-up integration Platform as a Service (iPaaS) vendors will become an oxymoron in 2015, due to continued consolidation and alignment between SaaS vendors and iPaaS vendors.
We are already seeing evidence of this alignment, with every SaaS vendor coming out with its own toolbox of integration technologies. They have discovered that they have to “play nice” with existing systems in the customer environment. Some of these technologies are home grown, but more and more each SaaS vendor has a favourite iPaaS vendor that it “recommends.”
Why keep recommending the same partner? Why not buy them instead? I predict there will be mass consolidation in this market with the SaaS vendors buying up the iPaaS vendors. The iPaaS category got its own “Magic Quadrant” from Gartner about a year ago, and the consultancy identified 17 players at the time. According to InformationWeek, the “greybeards” in the group include IBM, SAP, Informatica, and Tibco. The youngsters, or what we call the independent start-ups, include MuleSoft, SnapLogic, Boomi, Jitterbit, and Attunity.
I’m not sure what Gartner’s next report will say, but by the time this gets published the “independent start-up” category will be much smaller. Independent start-up iPaaS vendors will disappear as they are snapped up by the larger players, and we predict that by 2017 there will only be three remaining independent vendors.
Integrating enterprise systems and applications in the cloud can be a challenge to even the most experienced iPaaS vendor, as the majority of these systems were not “born” in the cloud, rather they were on-premise and utilizing on-the-ground middleware for integration. iPaaS vendors all have their own unique approach and customers cannot afford to have multiple iPaaS solutions in one environment. But which one to choose? The trouble is, there are too many of them, which creates a headache for companies trying to find a reliable vendor. What organizations want is to make an investment in a good, solid iPaaS provider rather than invest in a “butterfly” that might just flit away in a few years.
In my third blog, Integration Technology: Cloud-only is dead, I said that the mad rush to move everything to the cloud is beginning to calm down because organizations realize that not everything should be there. Companies are realizing that they need an established integration partner that can offer a reliable hybrid cloud/on-premise solution. Not a fly-by-night cloud-only solution.
The iPaaS market has created some great new technologies and new, easier-to-use programming and integration metaphors, but by and large these are no longer differentiated and the market is a mix of “me-too” players. This lack of differentiation, along with the increasing needs by the SaaS vendors for iPaaS solutions, will fuel the consolidation of this technology, just like what we saw in 2014 in the API Management market. So who is going to buy whom? Well, if I knew that I would be playing the stock market and not writing this blog!
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