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    Why the IPaaS Market Is Growing

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    Six Big Business Intelligence Mistakes

    It seems like only yesterday that integration platform-as-a-service was an immature little imp in the integration world. Why, it was only last year that Gartner released its first Magic Quadrant on enterprise integration as a service.

    Oh my, how it has grown. Subscription revenue for the enterprise iPaaS market — which excludes the vendors that focus on “citizen integrators” — grew more than 60 percent in 2014. More significantly, the market attracted new players.

    “During the past 12 months, the net number of players in the market has grown considerably,” the report notes. “Currently, Gartner has on record more than 30 iPaaS providers.”

    Revenue isn’t what’s driving vendors to the iPaaS boom town. After all, only one vendor included in the report generated more than $50 million, with several generating less than $10 million. Rather, tech providers are attracted by the potential for growth and long-term strategic relevance. What changed?

    Gartner identifies several factors in the surge. When iPaaS first emerged, it wasn’t enterprises that embraced it, but individual lines of business and even single departments that had a cloud integration problem to solve. The market has evolved, though, and is now increasingly used for hybrid integration, B2B, API publishing and management, and mobile app integration. Gartner also says enterprises think about iPaaS differently. Now, forward-thinking IT departments and integration competency centers are involved in iPaaS purchasing decisions as a way to empower citizen integrators without compromising data quality, security and other enterprise standards.

    “This often leads ICCs toward combining iPaaS offerings with their established on-premises integration platforms in what Gartner calls hybrid integration platforms…,” the report states. “This trend also often implies that ICCs redefine their role from ‘integration factory’ toward ‘integration facilitator’ for do-it-yourself integration requirements.”

    That’s obviously a smart play, since these cloud-based solutions are connecting to on-premise systems in hybrid environments. It also cuts down on costs by reducing redundancy.

    iPaaS

    But the volatility does create a serious problem for CIOs and other technology leaders. Gartner anticipates that vendors will appear and disappear for a variety of reasons, including mergers and acquisitions, for the next three to five years before the market stabilizes. The next 12 to 18 months will be particularly crazy, Gartner warns, with some iPaaS providers moving into more of a “notable role.”

    “Consequently, the already-crowded vendor landscape will become even more confusing and fragmented over the next 12 to 18 months,” Gartner writes. “Leadership positions will change, many players will be acquired or simply disappear from the market, and new, powerful providers will emerge.”

    Generally, multiple vendors make the report available for download with basic user registration. I obtained my copy via email notification from Dell Boomi.

    Loraine Lawson is a veteran technology reporter and blogger. She currently writes the Integration blog for IT Business Edge, which covers all aspects of integration technology, including data governance and best practices. She has also covered IT/Business Alignment and IT Security for IT Business Edge. Before becoming a freelance writer, Lawson worked at TechRepublic as a site editor and writer, covering mobile, IT management, IT security and other technology trends. Previously, she was a webmaster at the Kentucky Transportation Cabinet and a newspaper journalist. Follow Lawson at Google+ and on Twitter.

    Loraine Lawson
    Loraine Lawson
    Loraine Lawson is a freelance writer specializing in technology and business issues, including integration, health care IT, cloud and Big Data.

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