"In the early days of SaaS, a lot of applications were standalone and running in silos," said Liz Herbert, a senior analyst at Cambridge, Mass.-based Forrester Research Inc. "People just weren't focused on the challenge of integration. They were focused on customization. Now we're seeing SaaS used more broadly."
As a result, SMBs are grappling with how to integrate their applications without making a risky investment in time and cash.
In the early days of SaaS, applications were primarily the concern of each individual business unit. Human resources used one. Sales used one. The head of a department was less concerned with integrating the applications with the rest of the company's systems than with making the product perform a specific business function. The applications didn't need to communicate with other software to deliver value.
But integrating applications delivered through the SaaS model carries some risk for SMBs, because they lack the resources to correct for mistakes. Part of the value of SaaS is its ease of use and its subscription-based pricing model, which offers low up-front costs and the ability to avoid vendor lock-in. SMBs often don't want to spend the resources necessary to get SaaS applications to interact with other SaaS products and on-premise applications, only to find they are unhappy with the result.
"It's a mixed bag," said Laurie McCabe, vice president at the New York-based Access Markets International Partners Inc. "On the one had, SaaS applications are built on open standards platforms and open architectures. In that way, they're almost more amenable to integration than proprietary on-premise applications. But on the flip side, you have this situation with SaaS where you could be running RightNow for CRM and Intact for accounting and OpenAir for project management. What happens is that you've got all these different solutions running in different places, and integrating them can get a little tricky."
Mike West, vice president of Saugatuck, said, "Integration is an important issue with respect to Software as a Service, and while most SaaS vendors offer a range of ways you can integrate SaaS solutions with on-premise software, it varies from company to company depending on what their competencies are."
West said many companies offer integration through hosted services and appliances. Other major SaaS vendors have created partnerships that offer customers a suite of applications that are integrated with each other.
"If you're exclusively on a platform like Salesforce.com and using Salesforce.com plus other cooperating companies on AppExchange, they have their own platform that offers integration," West said.
Boomi offers a Web-based user interface that allows SMBs to map their systems visually. The platform offers a drag-and-drop approach to integrating applications using templates that Boomi has created for a variety of SaaS products.
"These solutions don't require any coding," McCabe said of Boomi. "It's basically like a visual integration platform. You can just look and see these business processes and what you want to integrate. A business person can do this. You don't have to hire a programmer. That's huge [for SMBs].
"The up-front risk for this is really low," McCabe said. "If you were going to integrate an accounting system, a project management system and a customer relationship management system, you could hire a contractor and pay a lot of money, thousands up front. You may or may not be happy with the end result. With Boomi, you pay per connection per month. Say it doesn't work. You've just lost a few hundred dollars. And it's probably a lot easier right off the bat to see if you get the results you need. If not, your sunk cost is a lot less than if you were paying for a one-off project."
Let us know what you think about the story; email: Shamus McGillicuddy, News Writer