iPaaS 101: What Is It and Why It Matters


After many years of relentless bombardment with acronyms like SaaS, IaaS, PaaS and BPaaS – culminating in the all-encompassing XaaS, or everything-as-a-service – I would not blame procurement professionals if they were shell-shocked, cynical and unresponsive when yet another term joins this list. Still, the reality is that all of these acronyms have been useful designators of significant milestones, tracing the increasing virtualization of information technology (from collections of assets that businesses had to own and manage to what in effect are services that can be consumed with relative efficiency and flexibility).

Whatever our attitudes toward it, technology drives change and what arises get named, usually with a new acronym. The most recent of these acronyms is iPaas, or integration platform-as-a-service, and for all procurement professionals, it may be the most relevant of the series acronyms besides SaaS (software-as-a-service), when application software shifted from something installed and managed on-premise to being a virtual service or cloud offering.

iPaaS Explained 

Whereas platform-as-a-service (PaaS), a good example being Force.com, at its simplest level is merely a cloud-based platform to develop cloud-based applications, iPaas is a cloud-based platform that allows third-party developers, IT staff and even power end users to integrate cloud applications with each other and with on-premise applications alike. Whereas PaaS offered openness for these agents to act upon cloud-based systems, iPaaS enables the efficient development of connecting networks, supporting processes and information flows amongst cloud-based systems.

IT research and advisory firm Gartner, in a recent report on iPaaS, has offered this definition:

Integration-platform-as-a-service (iPaaS) is a cloud service that provides a platform to support application, data and process integration projects, usually involving a combination of cloud-based applications, APIs and on-premises systems. iPaaS delivers some combination of capabilities that are typically found in enterprise service buses (ESBs), data integration tools, B2B gateways, managed file transfer products and API management platforms. IT departments, line of business (LOB) developers, mobile application development (AD) teams, application teams and even business users (aka "citizen integrators") leverage these capabilities to develop, execute and manage integration interfaces (or "integration flows") in the cloud.

But that is a bit to swallow for most non-IT professionals. So what does it mean for procurement?

What it means is that there is a class of technology that enables a better integration approach than point-to-point integration and also without being deployed through proprietary exchanges or marketplaces.

Relevance to Procurement

Put simply, the emergence of iPaaS is important because it provides more buyer choice in how applications and devices get connected to the cloud and across the cloud. Many buyers don’t want to rely on their patchwork of internal integration capabilities if such integration can be moved to the cloud and run as a managed service. Also, many don’t want their connectivity choices to be part of proprietary supplier or business networks that seek to get a percent of the commerce rather than just automating the commerce. Most of all, they like the simplicity in having out-of-the-box connectivity that integrates to the applications their trading partners use, and if it’s not available out of the box, the platform supports a democratized and nearly consumerized integration development environment that shields much of the integration complexity from the user.

Note that you shouldn't abandon your enterprise application providers for help in this task. In fact, companies should look forward to the day when their enterprise application providers are using a PaaS to develop their SaaS solutions, and the cloud-based integrations from iPaas connect them to each other and to on premise applications. In this way, the companies can use the same PaaS that their major IT providers use. For example, check out a previous Spend Matters analysis of Oracle's efforts here.

Supply chain technology, source-to-pay (S2P) and purchase-to-pay (P2P) solution providers are tending in this direction of using such open platforms and infrastructure that their clients can then apply and extend. As iPaaS matures and proliferates this trend should accelerate across many different category supply chains – potentially at a faster rate in some that are currently immature, such as contingent workforce, or are others that are very mature and primed for disruption.

If you’d like get a concentrated dose of why Spend Matters is now increasing its coverage of the broader question of platforms, networks, applications and apps, have a quick read of Jason Busch’s recent article “Ten Vexing Issues Regarding Supplier Networks and Platforms.” Or, if you are a PRO subscriber and would like to go broader and deeper, check out these:

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First Voice

  1. Krishneel Goundar:

    Our customers find that iPaas offers many benefits over traditional integration tools. They allow businesses to connect applications that reside in the cloud or on-premise without having to worry about hardware and installation. They offer a greater range of connectors/adapters, security features, and API connectivity. Vendors continue to release new features for iPaaS tools and customers can see and use these straight away without having to worry about patching or downtime.

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