Margaret Dawson, vice president of marketing and product management for Hubspan, explains what Hubspan offers and the market for integration offered through the cloud with IT Business Edge's Loraine Lawson.

Lawson: What does Hubspan offer? Are you an integration-as-a-service provider?
Dawson: Hubspan is a cloud-based integration platform, delivered as a service. We enable companies to automate business processes and integrate with vast internal and external communities, such as their supply chain, demand chain/customers, logistics providers, e-commerce value chain, financial institutions, etc.

Integration-as-a-service is typically the traditional VAN or EDI translation segment of the integration market. While we have some overlap with this segment, our solutions and services do much more than traditional IaaS.

Hubspan is focused not only on the integration process, but the overall business process. It’s not just about translating information or a transaction between the two sides or systems. Hubspan also supports complex business rules, security requirements, real-time queries and overall workflow automation of the business process. This is how we are very different from a traditional VAN or EDI provider.

Also, we extend other solutions. We are currently partnering or working with ERP application vendors, middleware vendors, integration providers and VANs – extending their solutions across the cloud to these integration communities and adding the business process and security layer to the basic integration capability.

Hubspan tends to address several markets, including SaaS, integration-as-a-service, B2B service provider or outsourcing, B2B integration and business process management.

Lawson: Are your customers primarily large companies?
Dawson: We have customers of all sizes. We are fortunate to be working with some of the leading companies in the world, like Barnes & Noble.com, Starbucks, Invitrogen, Office Depot and HD Supply, among many others.

We also work with hundreds of companies across the small and medium enterprise market. One of the big benefits Hubspan brings to smaller enterprises is we help them look and feel bigger, enabling them to compete with much larger organizations. Also, many of our customers want to start small, with just a few connections, or with a single process, and then grow from there. Our cloud platform and subscription pricing enables that kind of scalability, so that their costs only grow as demand grows.

Lawson: So, what companies do you consider the competition?
Dawson: While there are other integration service providers, most of the SaaS integration players are providing application to application integration, between two apps, such as Salesforce.com and Oracle. This is mostly within an enterprise.

Our focus is on integration between enterprises and communities, so it might be from one company’s Oracle system to thousands of companies and systems on the other side, exchanging procurement information, like purchase orders, invoices, PO acknowledgments, and others, as well as real-time information exchange, such as inventory checking, delivery times, etc.

We are like the Switzerland of integration in that we mediate between just about any protocol, application, standard, or business rule, allowing all parties to work in their existing or legacy systems.

We do sometimes bump into integration-as-a-service providers, like the VANs. And typically, we win this business, because of our ability to add the business process layer and address other complex requirements customers have.

Our biggest competition tends to be an in-house initiative or process. One of the first questions our customers ask is should they build or buy, and there is a series of criteria around this question they need to evaluate. Typically, companies find the total cost of ownership is significantly lower with our SaaS solution, while the time to market and overall benefits are higher than with an in-house solution.

Lawson: Earlier this year, Forrester predicted “minimal success” for integration-as-a-service. What's your reaction to that?
Dawson: I can’t speak for Forrester, but as I mentioned, integration-as-a-service is usually considered more the traditional VAN or EDI translation segment of the integration market, and yes, this market has been flat for a couple of years and will continue to be so. There remain many traditional integration providers like this, and some are trying to add more sophisticated capability to their services.

However, business process integration or the overall SaaS integration space is growing, particularly in areas that are adding that business process and policy-based services capability. Gartner calls it B2B integration outsourcing or BIO, and says it’s growing 20 percent, plus. I can tell you this year is Hubspan’s best year yet, and we have had two record quarters in a row.

Lawson: Are there typical use cases for SaaS integration?
Dawson: The one commonality between our customer user cases is the need to exchange information and work more closely with a community of businesses, be it suppliers, strategic partners, company divisions, logistics providers, or customers, to name a few. Many companies still refer to this as “EDI,” even though what they really need is a much more sophisticated integration process.

Our customers span nearly all major verticals and company sizes. They also represent nearly every possible combination of applications and back-end systems. In addition, they have varying requirements for security, business rules, formatting, data correlation, etc.

We’ve established five solution areas that cover the most common business process pain points, and those are around supply chain, demand chain or customer integration, logistics, e-commerce and finance. Within those business process areas, we handle a range of integration services, from basic managed file transfer or EDI to complex processes, where we are mediating disparate security policies, access control rules, formatting requirements and communication needs.

One of the biggest growth areas is in e-commerce and customer integration. With the economic situation, this isn’t too surprising. Our customers have seen incredible business benefits through implementing customer integration processes, particularly as part of their B2B e-commerce operation, including up to 100 percent customer retention, revenue growth of up to 25 percent, improved order accuracy and delivery times and improved margins. Most importantly, this integration creates a stickiness with their customers that provides a competitive barrier – something incredibly valuable in this environment.

Lawson: In your e-mail, you mentioned the “next generation of cloud integration.” What do you mean by that?
Dawson: The next generation of cloud-based integration is where the market is heading now, and it’s what we’ve been talking about, doing more than traditional transactional integration and more than app-to-app integration.

The new cloud-based solutions provide integration between vast communities, enabling them to achieve faster time to market, exchange massive information quickly, easily and securely, and manage an overall business process without requiring any hardware or software on the premises.

Next-gen cloud integration platforms, like ours, are also playing the role of extending other solutions. Many application providers and other IT vendors need a cloud story and often a SaaS story very quickly, but it is not their core competency. So, they partner or merge with these cloud solutions.

A perfect example is our recent partnership with IBM WebSphere. This is a great example of two technology companies combining best-of-breed competencies to create a joint solution for customers. WebSphere is a proven integration solution with strong business process modeling and management, and Hubspan is a proven SaaS integration platform. With the new solution, called WebSpan, IBM customers have the choice of building an on-premise integration stack with WebSphere or using the WebSpan cloud-based service.

Increasingly, I think we’ll see companies taking a hybrid approach, where they combine some on-premise and some cloud in order to leverage existing investments and technologies while still extending that capability across the cloud to other businesses.

Next-gen cloud integration will also incorporate more self-service for customers and partners, including greater visibility into the cloud service and exposing the community.

Finally, I think there is an opportunity for different types of cloud platforms to partner. For example, you have Microsoft’s Azure, which allows companies to build cloud-based apps on a solid platform. I can see us providing integration services between those apps. Or companies like ours could turn to Amazon’s EC2 cloud infrastructure to handle data archive storage, so we can have a greener data center focused on current processing.