Market Definition/Description

Gartner defines integration platform as a service (iPaaS) as a vendor-managed cloud service that enables end users to implement integrations between a variety of applications, services and data sources.

Purpose

iPaaS connects disparate applications, services and data sources to enable information to flow between them. iPaaS enables end users of the platform to connect a variety of applications, services and data sources for at least one of the three main uses of integration technology:

• Data consistency to ensure applications are operating with the right information

• Multistep process to automate business processes and workflows

• Composite service to create services exposed as APIs or events

These integration processes, data pipelines, workflows, automations and services are most commonly created via intuitive low-code or no-code developer environments, though some vendors provide more complex developer tooling.

Capabilities

Mandatory capabilities of iPaaS services are:

• Be a cloud service.

• Be fully managed by the vendor for all software patches and updates.

• Provide developer tooling to enable end users to implement integration use cases.

• Provide software development life cycle (SDLC) tooling to enable SDLC management, including versioning, testing and deployment.

• Provide operational tools to enable operational monitoring, alerting, reporting and auditing of running integrations, processes, pipelines and services in production environments.

• Enable at least one of the following use cases for integration technology:

• Data consistency: Ability to monitor or be notified by applications, services and data sources for changes and to propagate those changes to the appropriate applications and data destinations (for example, “synchronize customer data” or “ingest into data lake”).

• Multistep process: Ability to implement multistep processes between applications, services and data sources (for example, “onboard employee” or “process insurance claim”).

• Composite service: Ability to create composite services exposed as APIs or events and composed from existing applications, services and data sources (for example, to create a “credit check” service or to create a “generate fraud score” service).

Optional capabilities of iPaaS platforms include:

• Prepackaged integration processes (PIPs) to accelerate integration delivery

• Secure agents to connect to on-premises applications, services and data sources

• Secure agents to connect to private cloud applications, services and data sources

• Secure agents to connect to public cloud applications, services and data sources

• Integrate via application user interfaces (screen scraping and web browser)

• Intelligent document processing (IDP) features for processing scanned documents and file attachments

• A low-code user experience (UX) for building user interfaces and forms

• Task/process mining

• Service discovery

• Data discovery

Delivery Model

• Control plane (cloud)

• Runtime plane (cloud or on-premises, but still vendor-managed)

• Development (web-based, desktop or mobile)

User Types

• Business technologists (citizen developers, software as a service [SaaS] administrators)

• Integration specialists

• Software engineers (technical developers)

• Business process experts (process designers)

Magic Quadrant

Figure 1: Magic Quadrant for Integration Platform as a Service, Worldwide

Source: Gartner (January 2023)

Inclusion and Exclusion Criteria

To qualify for inclusion, each provider must:

• Meet the market definition of iPaaS.

• Have a clear history of selling and marketing a generally available iPaaS licensed product for at least two complete years as of 31 March 2022.

• Sell and market iPaaS as a stand-alone product with no requirement to purchase or subscribe to any other services.

• Enable end users to implement integrations directly and not mandate the use of vendor- or partner-provided professional services.

• Implement all three of the following use cases for integration technology:

  • Data consistency

  • Multistep process

  • Composite service

• Provide secure connectivity for on-premises applications and data sources via some form of secure agent without having to open inbound firewall rules.

Providers must also meet one of the following criteria:

• At least $35 million annual revenue in FY21 from iPaaS subscription licensing sold as stand-alone SKUs

• At least 1,000 unique customer organizations or logos subscribed.

Providers must operate in at least two of the following geographies:

• North America

• Latin America

• Europe, Middle East and Africa

• Asia/Pacific, including Japan and China

Gartner excludes vendors that:

• Require a specific third-party component or product to support core iPaaS capabilities that is not already repackaged into the vendor’s platforms (i.e., branded, sold and supported directly by the vendor).

• Only sell their iPaaS software along with development or professional services, where the tool is used exclusively by the vendor’s consultants or service providers.

• Require the purchase and/or installation of other unrelated products or platforms offered by the same vendor (e.g., a CRM application or content management system).

Honorable Mentions

• SEEBURGER: SEEBURGER did not meet the revenue or customer numbers for inclusion in this year’s Magic Quadrant. SEEBURGER is an established integration software vendor, providing iPaaS and managed services for B2B, EDI, API and MFT use cases.

• WSO2: WSO2 Choreo did not meet the revenue or customer numbers for inclusion in this year’s Magic Quadrant. Choreo is based on Ballerina and may appeal to software engineering leaders looking to simplify their integration delivery.

Evaluation Criteria

Ability to Execute

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

Product or Service: This criterion assesses the organization’s ability to provide a core offering that competes in and serves the iPaaS 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: This criterion is 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: This criterion assesses 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: This criterion looks at 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: This criterion assesses 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: This criterion looks at 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: This criterion assesses 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

|

High

| |

Overall Viability

|

Medium

| |

Sales Execution/Pricing

|

High

| |

Market Responsiveness/Record

|

Medium

| |

Marketing Execution

|

Medium

| |

Customer Experience

|

High

| |

Operations

|

Low

| | |

Source: Gartner (January 2023)

Completeness of Vision

We evaluate vendors’ Completeness of Vision in the iPaaS 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; industry focus such as healthcare, manufacturing or financial services; LOB processes such as marketing, sales and customer support; cloud platforms such as those of Alibaba, AWS and Google; and 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, enterprise nervous system/event stream analytics, and 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

|

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 (January 2023)

Quadrant Descriptions

Leaders

Leaders have a deep understanding of the iPaaS market. They have a record of strong execution and an ability to influence the market’s direction. Leaders have a clear product roadmap to solidify the product’s position and to help buyers protect their investments.

Leaders continuously expand their capabilities to deliver functionally rich platforms that bring significant value to customers. They support numerous integration use cases and address new business problems. They have a large network of partners that provide localized support and services to customers across most geographic regions.

Leaders are well-positioned to remain dominant as the iPaaS market evolves. However, their status cannot be taken for granted. In the fast-moving iPaaS market, vendors that lose focus could fall out of the Leaders quadrant.

Challengers

Challengers offer competitive platforms that deliver value in multiple integration scenarios (at least for certain industries or use cases). Challengers also demonstrate the financial strength and commitment to compete in the iPaaS market.

Challengers are well-positioned to succeed in this market. However, their perspective on how the market will evolve is often limited because it is based on the needs of their existing iPaaS client base. They often have an incomplete vision of who the buyers are (and will be), what the use cases are or 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 complete than that of Leaders. Alternatively, they may lag Leaders in terms of marketing, sales channels, geographic presence, industry-specific content and innovation. To become Leaders, Challengers must improve in their specific areas of caution and match Leaders’ platform capabilities and roadmap.

Visionaries

Visionaries demonstrate a strong understanding of emerging technology and business trends by aligning their iPaaS capabilities with current demand. They understand the specific requirements of this market and are continuously innovating their technologies, delivery models and go-to-market strategies.

Visionaries see their iPaaS offering as a key element of a broader integration strategy. They may combine software licensing, software subscriptions and as-a-service subscriptions with iPaaS 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 currently lack visibility or credibility outside of their existing customer base or domain. Further, they may not have the sales and marketing expertise required to build awareness for their offerings and sell beyond their traditional IT customer base.

Visionaries may also enter the iPaaS market by acquiring another vendor, or by significantly reengineering their on-premises products for cloud delivery or by developing a new technology. To become Leaders, Visionaries must build stronger recognition of their platforms in new customer segments and improve their sales strategy and execution to expand their market share.

Niche Players

Niche Players typically specialize in one vertical, geographical or functional area and only address a segment of the iPaaS 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 within that segment 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 and functional requirements. Niche Players that can fulfill these specific requirements may offset the viability risks associated with smaller vendors.

Niche Players are often popular targets for acquisition because they offer specialized iPaaS 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

Exceptional Growth for More Than a Decade

Gartner estimated that the iPaaS market generated $190 million in revenue in 2012. Roll forward more than a decade to 2023, and iPaaS revenue is forecast to exceed$6.6 billion, with a projected compound annual growth rate of 18%. iPaaS emerged as the fastest-growing segment in the integration software technologies market in 2021, having grown by 40.2% year-over-year (see Market Share Analysis: Integration Software Technologies, Worldwide, 2021).

The vendor landscape of the iPaaS market has also evolved dramatically over the past decade. Gartner now tracks more than 150 iPaaS vendors, compared with just 30 in 2012. These vendors offer sophisticated services for an ever-expanding range of integration use cases. The scale of their operations has also grown exponentially. Some individual iPaaS clients process more than a billion integrations per month, and a large iPaaS vendor will likely process trillions of integrations per month for its clients.

Given the advanced capabilities and immense scale of iPaaS vendors, this technology has become the strategic integration platform of choice for hundreds of thousands of organizations around the world. In many cases, iPaaS has replaced previous generations of integration platform software such as application integration suites, data integration tools and B2B gateway software.

Evolution From an Independent Market to an Operating Model

The iPaaS market started as a collection of unique products that were differentiated from their integration platform software counterparts due to ease of use, lower cost of entry and ease of access. Over time, iPaaS has evolved into an operating model that delivers all possible types of integration technologies.

Whatever integration needs you and your company have, someone, somewhere will have created an iPaaS offering that meets your needs. For example, there is an iPaaS that can serve as:

• A simple connector between your SaaS application

• A service to manage your B2B EDI integrations for all of your business partners

• A means to create digital products via APIs to help transform your business to a platform business

As a result, it is getting harder to distinguish between iPaaS offerings and other integration technologies like data integration tools, application integration suites or API management platforms, and in some cases, they are one and the same.

Convergence of Integration, Automation and Composition

Many vendors are converging integration, automation and composition capabilities into a comprehensive portfolio of platform services. This strategy of convergence, along with the rapid growth of the iPaas market, has led to a wave of acquisitions in 2021 and 2022, including:

• Celonis acquiring Lenses.io in 2021

• FiveTran acquiring HVR in 2021

• Francisco Partners and TGP acquired Boomi in 2021

• IBM acquired myInvenio in 2021

• Jitterbit acquired eBridge Connections in 2021 and PrimeApps and Wevo in 2022

• SAP acquired Signavio in 2021

• Salesforce (MuleSoft) acquired Servicetrace in 2021

• Software AG acquired StreamSets in 2022

• Thoma Bravo acquired Talend in 2021

• UiPath acquired Cloud Elements in 2021

Although this is not an exhaustive list, the flurry of acquisition activity in this market is further blurring the boundaries between iPaaS, low-code application platforms (LCAPs), RPA and other platforms. We expect ongoing disruption in the iPaaS market as it continues to consolidate and merge with adjacent software markets.

Increased Adoption by Business Technologists Driving PIPs and Digital Sales Channels

As organizations spend more of their technology budget outside of IT, and as business units deliver more IT, application vendors have recognized that providing APIs is no longer sufficient for meeting enterprise integration needs. Many applications now embed basic integration capabilities for the most common integration scenarios. In response, iPaaS vendors are providing packaged integration processes (PIPs) targeted to business users to better compete for simpler use cases.

Market Overview

Given the rapid growth and evolution of the iPaaS market, Gartner decided to remove the distinction between enterprise iPaaS and domain-specific iPaaS solutions. As such, we changed the name of this Magic Quadrant from “Enterprise Integration Platform as a Service” to “Integration Platform as a Service.”

To reflect this updated focus, we created a new set of questions and followed a different evaluation framework for this Magic Quadrant. This means that readers should not apply year-over-year comparisons of vendor positions. Nonetheless, most vendors ended up in similar quadrants to last year’s iteration. This similarity demonstrates the maturity of the iPaaS market and raises questions as to what shape next year’s Magic Quadrant might take.

Key Considerations for iPaaS Evaluation and Selection

iPaaS vendors target two primary buyer personas: those who are looking for a strategic platform to address multiple business-critical integration use cases (software engineering leaders and application leaders) and those who are looking for technology to solve their tactical connectivity challenges (business unit leaders and other buyers).

Both types of buyer personas find it difficult to evaluate and select vendors because the iPaaS market remains fragmented, fast-evolving and overcrowded.

To navigate the iPaaS 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 vendor’s SLAs and quality-of-service requirements

• The organization’s security and regulatory compliance needs

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

• The ability to deploy the iPaaS platform in a hybrid mode, including multicloud options across the iPaaS public clouds 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

We recommend that buyers develop a thorough understanding of their integration requirements and priorities before starting the iPaaS 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.

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

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.