SaaS Uptake Hampered By Integration Concerns

Software-as-a-service (SaaS) and cloud providers are battling to overcome integration concerns from prospective customers, according to a recent study by the consultancy ThinkStrategies and cloud integration provider MuleSoft.

Almost 90 percent of respondents consider integration to be important or extremely important in winning new customers, found the study, which focused on the impact of integration on SaaS/cloud vendors in the rapidly growing cloud computing market.

Integration Headache

In addition, SaaS/cloud vendors identified integration as the most time-consuming element of the customer implementation process.

Nearly two-thirds of SaaS/cloud vendors acknowledged that integration needs to be a critical part of their solution, rather than leaving it to the end user.

“The success of the first wave of SaaS/cloud vendors has sparked a ‘Cloud Rush’ effect, which is attracting a proliferation of players to enter the market, ranging from fledgling startups to the biggest vendors in the hardware, software and services industry,” said Jeffrey Kaplan, managing director of ThinkStrategies and founder of the Cloud Computing Showplace. “The results clearly show that leading SaaS/cloud vendors must incorporate integration solutions into their go-to-market strategies in order to succeed in today’s marketplace.”

The report identified five key findings regarding the impact of integration on SaaS/cloud vendor success. Integration is a key to winning new customers, as more than 88 percent of SaaS/cloud vendor respondents view integration as either important or extremely important in winning new customers. Integration need is widespread, with a majority of SaaS/cloud vendors (52.8 percent) claiming that more than half of their customers require integration. Dealing with integration issues is the norm, not the exception, when deploying SaaS/cloud solutions.

The report found integration is the top barrier to new SaaS/cloud sales, as almost eighty-eight percent (87.7 percent) of SaaS/cloud companies identified integration as a common or very common sales hurdle. In addition, the report found integration to be the most time-consuming element of customer implementation, with 79.3 percent of respondents saying that integration is highly time-consuming or somewhat time-consuming. Nearly two-thirds (62.5 percent) of SaaS/cloud companies believe integration is a critical part of their solution.

“As cloud adoption continues to grow, customer expectations have shifted dramatically, requiring SaaS/cloud vendors to take on many of the integration burdens formerly held by end users,” the report noted. “Customers’ concerns about integration represent both a threat and an opportunity for SaaS/cloud providers. Failing to offer integration can blunt sales and create customer support issues, while offering integration capabilities can create a competitive advantage.”

PaaS Benefits

The report includes analysis of the survey findings and an integration solution guide to aid SaaS/cloud providers in selecting an integration solution to fit their needs.

In addition, the report introduces a new approach to cloud integration, identified by analyst firm Gartner Group as “integration platform-as-a-service.” iPaaS can benefit both end users and SaaS/cloud vendors, by providing a complete platform that allows SaaS vendors to offer seamless integration with both on-premises and cloud applications.

“As SaaS adoption rises, and as the number of SaaS providers continues to increase, issues with integrating these applications will remain at the forefront,” said Mahau Ma, vice president of marketing for MuleSoft. “SaaS/cloud vendors have to understand that the integration responsibility now rests on their shoulders, not the end user, and will become a significant inhibitor to their business.”