#iPaaS #Integration #Technology #Gartner

Market Definition/Description

Gartner defines enterprise integration platform as a service (EiPaaS) as a combination of integration technology functionalities that are delivered as a suite of cloud services and designed to support enterprise-class integration initiatives. An EiPaaS provider offers high availability, disaster recovery, security, SLAs and technical support. It also enables users to develop and execute multiple integration scenarios by providing support for multiple personas. The EiPaaS vendor must fully manage platform operations, patching and upgrades.

EiPaaS offerings are public, stand-alone products that subscribers use directly, as opposed to integration capabilities embedded in another offering (such as a SaaS application or application PaaS).

Magic Quadrant

Figure 1: Magic Quadrant for Enterprise Integration Platform as a Service

Source: Gartner (September 2021)

This graphic describes the relative positioning of the vendors evaluated in the Magic Quadrant for Enterprise Integration Platform as a Service 2021 along the Vision and Execution axes.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor's appearance in a Magic Quadrant one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

  • Integromat

  • Huawei

Dropped

  • Adaptris

  • Cloud Elements

Inclusion and Exclusion Criteria

To qualify for inclusion in this Magic Quadrant, vendors had to deliver a service with the following characteristics:

  • It had to be a cloud service that is available via subscription to all qualified subscribers and is accessible through internet technologies. This service had to include:

    • Some sharing of physical resources between logically isolated tenants (subscribers or applications).

    • Some self-service provisioning and management by subscribers.

    • Bidirectional scaling without interruption of activities and with some automation.

    • Some instrumentation for resource use tracking.

  • It had to be a PaaS solution that:

    • Encapsulates the underlying virtual or physical machines, their procurement, management and direct costs, and does not require tenants to be aware of them.

    • Delegates the patching, versioning and health of the platform stack to the provider.

  • It had to provide the following iPaaS capabilities:

    • Application integration features that is, the ability for different applications to exchange messages, call other business functions and automate business processes. This integration generally needs to be at the transaction level. It must support use cases such as:

      • Data consistency/synchronization between applications.

      • Composition of new services from aggregations of existing applications or services (typically published as APIs or events).

      • Delivery of a multistep process that touches many systems.

    • D****ata consistency and sharing features — that is, the ability for different data stores to synchronize, to move data and to combine, deduplicate and aggregate data from different stores. This integration generally involves a bulk/batch, federated/virtualized or change data capture/replication mode of data delivery. It supports requirements for extracting, transforming, combining and provisioning data to support diverse use cases (such as analytics, data management and integration).

    • B2B ecosystem integration features — that is, the ability to enable the exchanging of data (such as payments, orders and supply chain information) electronically with business ecosystems and partners by leveraging industry-standard data formats and protocols (such as EDIFACT, X12, Swift, HL7, AS2/AS4). Executing effective B2B processes involves people from nontechnical business roles, along with trading partner onboarding and trading community management. Nontechnical users are provided access to, control over and visibility into the operation of these B2B solutions.

    • API-based integration features that is, the ability to create and integrate APIs from different sources and to manage APIs in the context of these integrations.

    • Connectivity features to support on-premises and cloud-based endpoints, including:

      • Application connectors, such as for Salesforce, Workday, NetSuite, Oracle E-Business Suite and Oracle Fusion Cloud ERP, SAP S/4HANA and SuccessFactors, ServiceNow, Microsoft Dynamics 365 and Marketo.

      • Data source connectors, such as for file systems and SQL and NoSQL databases.

      • Technology connectors, such as for FTP, HTTP, Java Message Service (JMS) and Open Database Connectivity (ODBC).

    • Features to support multiple data and message delivery styles, including:

      • API-based

      • Messaging/event-based

      • Batch

    • Data and message features such as validation, mapping and transformation, and routing and orchestration.

    • End-user tools to develop, test, deploy, execute, administer, monitor and manage integration flows, and to manage the life cycle of the relevant artifacts (transformation maps, routing rules, orchestration flows, adapter configurations and others).

  • It also had to target enterprise-class projects by providing:

    • Support for high availability and disaster recovery.

    • Secure access to endpoints and to the platform’s functionality.

    • Technical support to paying subscribers.

  • Lastly, it had to meet the follow requirements:

    • Marketing focused on integration. It had to be marketed as a versatile offering that can address a broad range of use cases (including application integration, data integration, B2B ecosystem and support for APIs) and industries.

    • Stand-alone offering. It had to be provided as a stand-alone service that subscribers use directly. To use the platform, customers can subscribe to the EiPaaS capability only, not just to some other cloud service — a SaaS application or another form of PaaS, such as application platform as a service (aPaaS) — of which the iPaaS capabilities are an “embedded” subset.

    • Directly provided by the EiPaaS vendor. The customer must be able to purchase all these capabilities directly from the vendor of the EiPaaS without engaging with third parties. The vendor must provide at least first-line support for these capabilities.

To qualify for inclusion, vendors had to provide all the functionality listed above as a generally available offering (as of 1 March 2021). The vendor must have had at least 900 paying customer organizations, of which at least 200 were direct customers, by the same date. We took into account the number of paying organizations, not individual users. We included both direct and indirect customers — that is, organizations that bought a provider’s EiPaaS solution via a reseller or an OEM partner.

Evaluation Criteria

Ability to Execute

We evaluate vendors’ Ability to Execute in the EiPaaS market using the following criteria:

Product or Service: The organization’s ability to provide a core offering that competes in and serves the EiPaaS market. This includes current product and service capabilities, quality, feature sets and skills. This can be offered natively or through OEM partnerships. This criterion covers diverse capabilities such as enterprise-grade operations, platform versatility, integration specialist productivity, ad hoc integrator productivity, citizen integrator support, event processing and support for multicloud and hybrid deployments.

Overall Viability: An assessment of the organization’s financial health, and the financial and practical success of the business unit. Our assessment includes the likelihood that the business unit will continue offering the product and will continuously invest in improving its capabilities. Key business indicators include company and product revenue, direct and indirect customer base, profitability, research-and-development investment ratios, and the balance of direct and indirect revenue.

Sales Execution/Pricing: The organization’s capabilities in all presales activities, including deal management, pricing and negotiation, presales support and the effectiveness of its sales channel. Key indicators include pricing transparency, pricing models that support various customer segments, ease of access for evaluation and customer growth rates.

Market Responsiveness/Record: The organization’s ability to respond, change direction and achieve competitive success in response to changing market dynamics. Key indicators include the organization’s history of responsiveness, frequency of release schedule, adjustment of platform features based on customer demand, understanding of market direction and the new features it introduced during the past year.

Marketing Execution: The organization’s ability to deliver its messaging in a way that influences the market, promotes its brand, increases awareness of its products and establishes a positive perception of the product organization in the minds of buyers. Key indicators include the organization’s publicity, promotional initiatives, thought leadership, word of mouth and sales activities. Of specific interest is the organization’s ability to differentiate its buyer journeys and market presence.

Customer Experience: The organization’s ability to enable customer success through its relationships, products and services/programs. This criterion considers the ways in which customers receive technical support or account support. It covers ancillary tools, customer support programs, the availability of user groups and SLAs. Key indicators include customer satisfaction with products, customer satisfaction with the vendor and customer willingness to recommend the offering to others.

Operations: The organization’s ability to meet goals and commitments. Factors include quality of the organizational structure, skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently. Key indicators include staffing and organizational design, disaster recovery, ability to make new releases available to customers with minimal disruption, support structure and modalities, and partner networks.

Table 1: Ability to Execute Evaluation Criteria

Evaluation CriteriaWeighting
Product or Service

|

High

| |

Overall Viability

|

Medium

| |

Sales Execution/Pricing

|

High

| |

Market Responsiveness/Record

|

Medium

| |

Marketing Execution

|

Medium

| |

Customer Experience

|

High

| |

Operations

|

Low

| | |

Source: Gartner (September 2021)

Completeness of Vision

We evaluate vendors’ Completeness of Vision in the EiPaaS market using the following criteria:

Market Understanding: This criterion assesses the ability to understand buyers’ wants and needs and to translate that understanding into products and services. Vendors with the highest degree of vision listen to and understand buyers’ wants and needs, and can shape or enhance customer demand based on their vision. Key indicators include an understanding of the different integration personas and their buyer journeys, the breadth of evolving integration use cases, the growing complexity of deployment models, and their ability to recognize, set and capitalize on trends.

Marketing Strategy: This criterion looks for a clear, differentiated set of messages consistently communicated throughout the organization and externalized through a website, advertising, customer programs and positioning statements. Major traits include clear articulation of differentiators and marketing initiatives that support a differentiated industry understanding.

Sales Strategy: This criterion looks for a sound strategy for direct and indirect sales, marketing, service and communication affiliates to extend the scope and depth of the organization’s reach, skills, expertise, technologies, services and customer base. Key indicators are the vendor’s different approaches for inside sales, marketplaces, direct sales, ISV/OEM sales and SI sales.

Offering (Product) Strategy: This criterion assesses the vendor’s approach to product development and delivery — especially differentiation, functionality, methodology and feature sets — with a view to fulfilling current and future requirements. Key indicators include features for enterprise-grade operations, platform versatility, integration specialist productivity, ad hoc integrator productivity and citizen integrator support. Other key features include the use of AI to facilitate development and operations, packaged integration processes and templates, hybrid multicloud deployment support, event processing, and metadata management.

Business Model: This criterion considers the design, logic and execution of the organization’s business proposition for achieving continued success.

Vertical/Industry Strategy: This criterion evaluates the vendor’s strategy to direct resources, skills and offerings to meet the specific needs of individual market segments. Key indicators include platform ecosystems for application domains, such as ERP and CRM; for industry focus, such as healthcare, manufacturing or financial services; for LOB processes, such as marketing, sales and customer support; for cloud platforms, such as those of Alibaba, AWS and Google; and for application vendor ecosystems, such as Oracle, Salesforce, SAP and ServiceNow.

Innovation: This criterion looks for direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation or defensive or preemptive purposes. Key indicators include the use of AI to ease integration challenges, facilities to enable collaboration between integration personas and support for emerging use cases (such as RPA, digital integration hub and enterprise nervous system/event stream analytics, application composition). We also considered other innovations that align with emerging market or technology trends, including innovative pricing, go-to-market and sales models.

Geographic Strategy: This criterion evaluates the vendor’s strategy to direct resources, skills and offerings to meet the specific needs of geographic areas outside its native area. Vendors may provide their services directly or via partners, channels and subsidiaries. Key indicators include the vendor’s direct commercial and support presence in regions and countries, the data center locations of the iPaaS control plane (for development, governance and operations) and the runtime plane (for execution of integration processes).

Table 2: Completeness of Vision Evaluation Criteria

Evaluation CriteriaWeighting
Market Understanding

|

High

| |

Marketing Strategy

|

High

| |

Sales Strategy

|

Medium

| |

Offering (Product) Strategy

|

High

| |

Business Model

|

Low

| |

Vertical/Industry Strategy

|

Medium

| |

Innovation

|

High

| |

Geographic Strategy

|

Medium

| | |

Source: Gartner (September 2021)

Quadrant Descriptions

Leaders

Leaders have an insightful understanding of the EiPaaS market. They have a reliable record of strong execution, an ability to influence the market’s direction and an ability to attract and keep a following. A Leader does not focus solely on current execution; rather, it plans a robust product roadmap to solidify its position and help buyers protect their investments.

Leaders continue to expand their capabilities and bring significant value to customers by addressing new types of business problems. Their platforms are cohesive and functionally rich, enabling multiple integration use cases. They often have a large global network of partners, and they regularly release updates to rapidly address emerging customer needs.

Leaders are well positioned to remain dominant as the EiPaaS market evolves. However, leadership cannot be taken for granted. In the fast-moving EiPaaS market, one misstep could have catastrophic consequences.

Challengers

Challengers offer mature or evolving offerings that have proven value in multiple integration scenarios. Some are vendors with a large customer base. Challengers also demonstrate the financial strength and commitment to compete aggressively in the EiPaaS market. Consequently, they offer a competitive platform (at least for certain industries and use cases).

Challengers are well positioned to succeed in this market. However, they have a somewhat limited perspective on how the market will evolve. They often have an incomplete vision of who the buyers are (and will be), what the use cases are and how users’ expectations will evolve. As a result, their offerings are more narrowly focused than those of Leaders. Challengers may lack a coordinated strategy for the various products in their platform portfolio, or their platform roadmap may be less robust than the Leaders. Alternatively, they may lag the Leaders in terms of marketing, sales channels, geographic presence, industry-specific content and innovation.

Visionaries

Visionaries demonstrate a strong understanding of emerging technology and business trends by aligning their EiPaaS capabilities with current demand. However, they may lack recognition or credibility beyond their customer base or particular domain. They understand the specific requirements of this market and are continuously innovating their technologies, delivery models and go-to-market strategies. Visionaries see their EiPaaS offering as a key element of a broader integration strategy. They may combine software licensing, software subscriptions and as-a-service subscriptions with EiPaaS as one of many channels for integration.

Visionaries may have a background in traditional on-premises integration middleware. As such, they have a good understanding of enterprise integration challenges. However, they may not have the sales and marketing expertise required to sell beyond their traditional IT customer base.

Visionaries may enter the EiPaaS market by acquiring another vendor, by significantly reengineering their on-premises products for cloud delivery or by developing a new technology.

Niche Players

Niche Players typically specialize in a vertical, geographical or functional area and only address a segment of the broader EiPaaS market. They may be startups or small companies just starting to succeed, or vendors focused on a specific subset of use cases.

However, their technology offerings and degree of customer satisfaction are often excellent. Niche Players’ offerings can be suitable for organizations that require local presence and support, want a close relationship with a provider, or seek a platform that addresses specific industry use cases or functional requirements. Niche Players that can fulfill these specific requirements may offset the viability risks associated with smaller vendors.

Niche Players potentially compete with companies from the domain-specific iPaaS market that are targeting this sector. They are also popular targets for acquisition because they offer specialized EiPaaS solutions that focus on a relatively narrow function or market segment. Their products often complement the broader integration strategies and platforms of larger vendors.

Context

Buyers can procure most EiPaaS offerings as suites of capabilities — either in a single package or as a set of subsuites. Vendors in the EiPaaS market include pure-play providers, established software vendors for application, data and B2B integration, and megavendors. These providers build and package their EiPaaS offerings in different ways to target different use cases, personas and industries.

Leading vendors continue to extend the functionality of their EiPaaS offerings, often by merging them with their classic integration platform software technologies, acquired offerings, OEM technologies or open-source software. These providers strive to further improve EiPaaS developer productivity, reduce time to value, shorten the learning curve to ease deployments, expand their reach to potential buyers and upsell to their established customers. Leading EiPaaS vendors are also focusing their product development efforts on the use of AI, such as ML and natural language processing (NLP), to assist development and operations. These innovations will enrich packaged integration process portfolios, enable continuous integration/continuous delivery (CI/CD) and DevOps and extend the range of supported use cases (including in hybrid and multicloud scenarios).

EiPaaS is one of the essential tools that organizations are using to deliver hyperautomation (see Emerging Technologies and Trends Impact Radar: Hyperautomation), especially for business technologists who are not in IT. In our 2021 Gartner Hyperautomation Survey,1 11% of business technologists indicated enterprise integration platforms are one of the three most-used tools to support business-driven automation initiatives. Organizations are also adopting EiPaaS to accelerate digital transformation, respond to drastic business changes, contain costs and increase flexibility. As more organizations adopt cloud and SaaS applications to simplify their operations, vendor-managed solutions are becoming more appealing to buyers. We expect that buyers will increasingly prefer consumption- and service-based delivery of integration capabilities instead of classic software-based integration approaches.

Market Overview

Organizations are continuing to adopt EiPaaS offerings as strategic alternatives to classic integration platform software. Gartner estimates that the iPaaS market generated 3.47billioninrevenueduring2020andgrewby38.73.47 billion in revenue during 2020 and grew by 38.7% compared to 2019. We expect that the iPaaS market will exceed 9 billion in revenue by 2025.2

EiPaaS providers target software engineering leaders and other buyers who are looking for a strategic platform that addresses multiple business-critical integration use cases. Organizations are increasingly procuring EiPaaS solutions as a key component of their modernized integration strategy.

Despite its continued growth, the EiPaaS market is fragmented, fast-evolving and overcrowded — making it difficult for buyers to evaluate and select vendors. We expect ongoing disruption in this market as it continues to consolidate.

To navigate the EiPaaS market and to evaluate and select vendors, buyers must assess:

  • The platform’s intended goal (short-term, tactical use versus long-term strategic use).

  • The type and number of endpoints to connect: SaaS, packaged applications, internally developed applications, mobile apps, social media, file systems, IoT, data sources, data warehouses and data lakes.

  • The provider’s track record and familiarity with its industry.

  • The integration skills of all their user personas and how they align with the platform.

  • The organization’s ability to federate the EiPaaS with the established on-premises integration technology and with API management platforms.

  • The vendor’s SLAs and quality-of-service requirements.

  • The organization’s security and regulatory compliance needs.

  • The geographic location of the vendor’s EiPaaS data centers and support centers.

  • The ability to deploy the EiPaaS platform in a hybrid mode, including multicloud options across the EiPaaS public cloud and IaaS public clouds, and within the customer’s data centers.

  • The availability and cost of iPaaS skills from the provider and external service providers.

  • The long-term cost expectations and available budget.

Many software engineering leaders attempt to standardize on a single EiPaaS to minimize complexity and contain costs. However, they may benefit from using multiple offerings to address different use cases. Specialized EiPaaS offerings may be more suitable for LOBs and application teams working on severely time- and budget-constrained projects or for meeting specific requirements, where a purpose-built tool can drive higher productivity.

For this reason, we recommend that buyers develop a thorough understanding of their integration requirements and priorities before starting the EiPaaS selection process. In addition to the above list of considerations, they should be pragmatic and tactical by evaluating domain-specific iPaaS solutions that can deliver quick ROI.

Evidence

1 Gartner’s 2021 Hyperautomation Survey was conducted online during March 2021 among 558 business technologists from North America (n = 226), Europe (n = 146), Latin America (n = 78) and Asia/Pacific (n = 108).

To be qualified to answer the survey, respondents would need to:

  • Have created, built or coded analytics or technology capabilities on their own or with input from others in the past 12 months.

  • Have used at least one of the 21 tools that were considered to produce analytics or technology capabilities for work. Twenty-one tools were considered under four categories: application development tools, automation tools, integration tools, and data science and AI tools

Results of this study do not represent global findings or the market as a whole, but reflect sentiment of the respondents and companies surveyed.

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.

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