With rise of digital transformation and integrated enterprise architectures, time and money spent on integrating APIs can easily spiral during software development. Adoption of the Internet of Things across industries and businesses is increasing this burden, particularly as the architecture evolves over the extended period covered by a subscription contract. Furthermore, the task of supporting all these different versions into the future becomes an onerous task, with the potential of making the software programme’s business model untenable.
As a result, SaaS companies are challenged with finding new ways to make their product ‘stickier’ with customers, decreasing customer churn and securing more revenue over the lifetime of a subscription. The key to achieving this stickiness lies in increasing the availability – and reducing the burden – of integration.
A change in market economics
The 2019 Okta report confirms that companies are increasingly selecting technologies that ‘prioritise interoperability, automation and offer a broad range of functionality’ and, coupled with a growing trend towards SaaS applications adoption worldwide, ISVs are expected to make sure their product not only works in itself, but also gets on well with other applications – from mainstream to niche – to create a fully interoperable platform.
When this is the case for each and every customer, the software vendor may find itself facing a series of decisions that have significant commercial impact. Which customers will they market the product towards – a few big customers or many smaller companies? How will they allocate limited time and resources across the development, integration and maintenance of the software? Would they be better working on meeting the ‘interoperability’ needs of a range of customers or focus efforts on developing their standalone core product?
For the ISV, it can turn into a lose-lose situation, resulting in either disappointing existing customers or spending time on these customers’ demands at the expense of acquiring new ones and improving the core product.
Allowing software developers to focus on their primary skill set by employing specialist integrators is certainly an option, but it adds an expensive and time-consuming layer to the process of software development. On the other hand, embedding integration at the core of the product has the potential to raise the value of the software to enterprise customers and be reflected in the price that they are willing to pay.
The knock-on impact on commercial viability of the software after all of this is taken into account can affect how – or even whether – the product is brought to market, and further influence which customers are targeted for sales.
Future-proofing software development
An integration platform as a service (iPaaS) allows software vendors to turn the situation to their advantage, improving both the product offering and its value in the market. By building universal integration capability into their own application, ISVs can offer a new kind of one-size fits all model for the subscription economy. At the same time, without the need to employ specialist integration capabilities within their business, the software vendors can save on development costs and still deliver the most comprehensive, premium value product possible.
Software developers can integrate a white-labelled iPaaS solution into their own software that provides complete interoperability with any existing architecture, as well as any applications that may be added in the future. In this way, ISVs can focus on what they do best and spend less time on the maintenance and integration of an increasingly complex portfolio of customers.
Digital transformation and the Internet of Things are creating a host of new opportunities for businesses that are looking ahead, and many want to keep their technology as agile as possible. For example, the current trend towards adopting a hybrid cloud strategy that deploys applications across on-premises systems, private and public cloud environments. Software vendors can help organisations to reduce cost and complexity for their customers by providing applications where interoperability is built-in as standard.
Continuing with the hybrid cloud example, investing ahead in new technology trends in an effort to future-proof the enterprise architecture can be a risky business, but software vendors can help to mitigate at least a part of the risk. ISVs providing solutions that have full integration capabilities at their core will offer time and cost of deployment advantages over competing solutions that require manual coding to work in harmony with their neighbouring apps.
A sticky solution
In short, software solutions with iPaaS built-in can offer greater stickiness by ensuring customers that their software solution is fully interoperable across a broad range of functionalities and technologies. New software can be easily integrated with existing solutions, enabling the customer to continue growing and developing an architecture around existing technologies without re-investment on integration with software they already own.
Renat Zubairov, CEO and co-founder, elastic.io