Integration Is Thorny Issue for SaaS

Loraine Lawson

You couldn't swing a dead cat online last week without hitting a prediction about how big SaaS and cloud computing would be in 2009. I like the way ZapThink's Ron Schmelzer put it in his prediction round-up:

"Cloud, cloud, cloud. We have already started to hear more about cloud computing and anything cloud-related as the year drew to a close. We expect the din of the cloud-related chatter to turn into a real roar by this time next year."

Francis Carden, CEO of OpenSpan, was one of the few people who thought SaaS might actually falter in the new year, sharing this prediction with me by e-mail: "Cloud Computing momentum will run into brick wall as organizations struggle to integrate cloud applications with existing legacy applications."


Integration problems-isn't that always the big brick wall IT hits? As someone recently expressed on the Yahoo SOA Group:

"Whenever anyone say 'we need to integrate our system with this other system' people shiver and sweat and hope that they're not part of that project, because down that path lies madness, ad-hoc or not."

But will integration be more or less of an issue if you move to the cloud?


There's no doubt that integration has become a major issue for SaaS companies. In fact, Boomi, a SaaS company specializing in integration, is basing a business strategy on this very problem. I recently interviewed the company's CEO and President, Bob Moul, and founder and CTO, Rick Nucci.


Boomi has had so much SaaS-related integration work, its development team actually became a bottleneck for SaaS companies. So, Boomi recently introduced a new platform called Atomsphere, which allows SaaS providers to provide on-premise integration for the customers, with the integration heavy lifting done in the cloud on Boomi's platform. In essence, Boomi is the backbone for SaaS providers wanting to offer out-of-the-cloud, bundled integration:

"We really felt that the right strategy was to partner with the application providers because A) they either didn't have a very good story around integration or B) they had built something and now didn't want to maintain it and be in the game of being an integration expert. They really love what we're doing and it takes a big problem off their plates."

That's one solution, but even so, Carden isn't the only one predicting problems for SaaS in 2009. SAP CEO Bill McDermott, in an interview this week with InformationWeek, said SaaS just won't cut it as a core platform. One reason: integration issues.


Quoth InformationWeek:

"McDermott said SAP's strong position in the software industry comes from customers' ability to have applications that run on the same platform, avoiding tough integration issues and improving visibility into operations. A company that tries to do that with SaaS will be left with trying to integrate hosted software from a variety of vendors using middleware from yet another vendor. They're discovering 'maybe software as a service wasn't so cheap after all,' McDermott said."

Add Comment      Leave a comment on this blog post
Jan 11, 2009 11:18 AM Akiva Marks Akiva Marks  says:
In my discussions with my corporate clients, as well as my own corporate history, I'm finding that allowing key corporate data and processes to leave the walls of the company controlled data center is the main mental barrier to Saas as well as Cloud Computing. Even though companies are outsourcing business processes and the associated data that goes with them - as well as outsourcing some applications to hosting providers - the thought of deploying their applications to an amorphous cloud and depending upon the vendor to just "support and provision it appropriately" is a mental leap they're not yet prepared to make. Similarly, relying upon services that a vendor will just "support and provision appropriately" is a similar leap of faith they are not yet ready for.While corporate management has become more and more comfortable with Business Process Outsourcing - and telling the IT guys to "just interface with them" - most IT management has not yet made a similar leap. This may be due to IT management struggling with a definition of what they provide, what is their core competency. Few companies outsource their core competency, doing so would invalidate their existence. Most IT management still defines data center operations and computing resource provisioning as part of their core competency, rather than a focus on maximizing the automation of core corporate business processes.Being that IT environment stability is a key IT operating factor, this is understandable. The question will be whether SaaS and Cloud providers will be able to create environments of matching reliability and provide sufficient business guarantees to make savings, flexibility, and dynamic provisioning worth the risk. (What risk? The career risk to IT senior management in case of failure, or simply from the unknown.)** Blogging at Reply

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