Although, integration platform as a service (iPaaS) is has been on the market for quite a few years already, many still don’t know what it is exactly and how they could use it. Nevertheless, integration platforms have started to prove themselves in the recent years and they have started to gain the interest of middle and large enterprises as the technology has begun to mature and it is a great alternative for traditional integration methods.

If you are here reading this blog, you have heard of an integration platform earlier. If you want to learn in more depth about the platform and understand how you can also utilize an iPaaS and include it in your integration strategy, this is the right article for you.

This article will answer the following questions:

  • - What is iPaaS?
  • - What are its core capabilities and key functionalities?
  • - What are the typical use cases?
  • - What are the benefits of using an iPaaS?
  • - How can it replace ESB?
  • - Why small, mid, and large sized enterprises have started to rapidly adopt it?
  • - How significant is the return on the investment?

Once we have answered all these questions, you will understand too why an increasing number of enterprises have started to prefer integration as a service and how they have been gaining a competitive advantage through better connectivity and information sharing.

What is iPaaS? 

iPaaS (integration platform as a service) is a suite of cloud solutions enabling the development, execution, and governance of a wide range of integration scenarios, such as data, application, system, cloud, SOA, process, internet of things, API, and B2B integration scenarios. It can connect any combination of on-premise or cloud technologies within an organization or across multiple ones. Thanks to this functionality the perfect hybrid integration platform has evolved out of iPaaS. As an integration platform is so versatile, no wonder that has been gaining popularity also during the last few years. However, very few iPaaS providers have been able to deliver genuinely hybrid integrations or complex integrations in which hundreds of trading partners need to be connected.

Why use iPaaS?

Integration platforms have been designed to act as a middle layer. It can help connecting systems and applications to enable the real-time exchange of the data between two or multiple stakeholders. It is an excellent tool for different integration scenarios: it can be used for integrations within the same organization or across multiple organizations located disparately geographically.

Becoming well-connected is a critical requirement for organizations. Enterprises need to eliminate data silos to improve cooperation across all parties.  The implementation, however, has often been challenging due to the variety of systems and applications organizations use. Some may rely on systems built decades ago, while others may have adopted cloud-based applications. These systems and applications also operate with a variety of protocols and data formats that complicates the case even more. An enterprise integration platform also needs to ensure that it offers high availability, preferably with zero downtime, disaster recovery, security, SLAs, and support.

An integration platform provides protocol bridging, message transmissions, translation and transformation of data formats, routing, service visualization, adapter technologies, orchestration solutions, multi-tenancy, and scalability for complex, challenging integration scenarios in the most secure way.

Compared to traditional integration solutions, the development, testing, deployment of the integration solutions happens a lot faster. As the number of new trading partners may increase, the time-to-deployment cycles must shorten to be able to support the connectivity needs of organizations. 

what is ipaas

Key capabilities

Some of the key capabilities of an integration platform are the following:

Key functionalities 

Connectivity management

Integration platform can build connections regardless of communication protocols – whether it’s HTTP, SFTP, FTP, AS2, or something else, it is possible to establish connectivity. As you can see in the picture above, it has ready-built connectors and adapters both for cloud and on-premise systems and applications. iPaaS also offers full lifecycle API management which can perfectly complement any integration strategy.

Data management

iPaaS can tackle any data format. Whether you are using EDIFACT, X12, JSON, XML, or proprietary formats, it can transmit it between the applications, translate if needed, so all parties receive the information in their preferred format, validate the data and enrich it if needed. The platform also takes care of the routing of the messages and orchestrates the flow of information based on preferences (data transfer can happen in real-time, batches, streaming).


The platform takes care of the monitoring of the solutions and reports any errors automatically to the maintenance team. It can also offer business intelligence on the data that has moved through the platform that can provide some valuable information for decision making.

Key use cases

An enterprise integration platform can be used for a variety of use cases. While we are discussing these different types of scenarios separately, these are all correlated. 

Data integration

Data integration is one of the most typical scenarios when it comes to integration. In this case, the data needs to be transferred from System A to System B, so both systems have up-to-date information available.

How does an integration platform improve the way we do integrations? Traditionally, data transfers happened in batch processes. However, today it’s crucial to have information available in real-time. iPaaS makes it possible.

Additionally, communication is a lot easier, if all stakeholders receive the data in a data format that their systems can understand. To achieve this, during the data transfer the formats can be transformed. Some information may also need to be validated which can be set up against your business rules to ensure that the data is always 100% clean. In case the solution detects errors, it can be sent back to the sender for enrichment, and once that’s done, it can be resent.

Application/System integration

Systems and applications need to be able to communicate with each other. Previously, EAI has been used for executing integrations between systems and applications. However, integration platforms have started to replace it.

The ultimate goal of application integration that data from disparate systems and applications would be available in a single platform for all the relevant stakeholders.

System and application integration is a primary use case for an iPaaS, as it can gather data from any systems – even from behind firewalls – and forward it to the end-user platform. 

Business Process Integration

Business process integration enables organizations to streamline their processes by creating seamless connectivity to connect systems and applications and automate the processes and workflows between them to improve communication and collaboration across teams.

Traditionally, large enterprises used an Enterprise Service Bus (ESB) for enabling business process integration. However, many have started to replace ESB with iPaaS, as it is versatile and the platform can be used for a variety of integration cases besides process integration. With iPaaS, both internal and external processes can be integrated. 

B2B Integration

Business-to-business integration is often referred to as electronic data interchange (EDI). In a previous blog, we defined EDI as the following:

“Electronic data interchange enables enterprises to exchange business-critical information (e.g., purchase orders, invoices, booking requests, custom status information, etc.) with their ecosystem of trading partners electronically. Shortly, EDI is a set of protocols that empower businesses to communicate with each other, and under EDI we mean the transmission, message flow, document format, and the software that interprets the documents. The EDI message normally includes the same information, as the paper one, however, switching to electronic processes has significantly improved the way trading partners can do business with each other.” 

iPaaS as a hybrid integration platform (HIP)

Hybrid integrations are becoming increasingly relevant when businesses need to be able to connect the old world (their legacy IT systems) with the new world (cloud-based SaaS applications). Hybrid is a bridge between on-premise technologies and cloud-based applications.

The implementation is challenging because legacy systems weren’t originally designed to be connected and communicate with other systems. Today, interoperability across systems is crucial, and enterprises need to break down their data silos by enabling connectivity to their on-premise legacy systems for their trading partners.

iPaaS can be considered as a hybrid integration platform (HIP). It is an ideal tool for bridging the gap between legacy and modern applications. As changing IT systems is not a sustainable option for most enterprises, there needs to be an integration layer that is capable of connecting different interfaces through different protocols. Whether the IT system needs to receive information from the cloud or things, or it should send data to business partners who have moved their operations to the cloud, an integration platform is an enabler of communication between these different architectures.

There could be other challenges during the implementation process, such as firewalls, different protocols, different standards and data formats, lack of APIs. All these can be easily tackled with an enterprise integration platform.

What makes it even more difficult to successfully execute hybrid integration scenarios is that you rarely need to connect only two systems. Typically, enterprises need to communicate with several parties (if not with hundreds), and in that case, an enterprise integration platform comes handy with its power of tackling challenging, complex integrations. 

iPaaS vs. ESB 

If you are using an Enterprise Service Bus (ESB) at the moment and you think why you should upgrade and start experiment with an iPaaS, it’s good to understand the differences and what extras an integration platform provides compared to ESB.

The basic idea of ESB and iPaaS is the same. Both were developed to enable enterprises to connect systems and applications to facilitate information sharing.

With iPaaS you don’t need to buy software or hardware, as it’s all in the cloud. Therefore, you don’t need to pay for upgrades and maintenance either. ESB has been designed for on-premise integrations, supporting older messaging standards. In comparison, with integration as a service users can deliver a wide variety of integrations whether the systems are situated on-premise or in the cloud, regardless of the data standards and formats the systems use (e.g., older ones, as EDIFACT or X12 or newer ones as JSON or XML).

Some would argue that ESB is better suited for complex integration scenarios. However, integration platforms can just as well handle challenging large-scale projects.

While ESB is an excellent tool for connecting internal systems and applications, for B2B integrations iPaaS offers a more horizontal solution. 

iPaaS for small, mid, and large enterprises

Traditionally, integrations have been expensive and only affordable for large enterprises. iPaaS has been breaking the barriers and democratized integrations for any size of enterprises. As the implementation time of integrations has shortened, the costs decreased too. As there is no need to purchase software and hardware or pay for upgrades, anyone can start using an integration platform with minimal investment. 

iPaaS benefits

Those who have already started to include an integration platform in their integration strategy have seen the benefits it brings to the business both concerning decreased costs and improved efficiency. Many have been using iPaaS to gain a competitive advantage over the competition: digitalization allowed them to offer better digital services to their customers and improve the overall customer satisfaction and retention.

Hosted in the cloud

This is probably the coolest part of an integration platform. Companies do not need to purchase hardware or software, they don’t have to buy licenses to use all the features of the platform, neither they need to pay for upgrades and new features. All iPaaS customers and users are entitled to enjoy all the features that the platform offers. Another great benefit is that it’s continually evolving. As new customers need new features for their specific integration cases, the R&D team is working on the implementation – and once it’s done, it will be available for all other customers too. 

Managed service 

Integration skills are still scarce, therefore, having an iPaaS vendor that will implement your integration solutions on top of an integration platform is a great benefit. The solution can be developed and deployed a lot faster, and you only need to provide an IT person that will help with the specifications and end-to-end testing. 

Short time-to-deployment

The faster the solution is deployed, the sooner you can start realizing the added value that iPaaS has brought to your business. Short development and deployment cycles are especially vital when you have to connect with an extensive ecosystem – the implementation of your project shouldn’t take years. 


As integration needs may evolve rapidly, the platform needs to be able to follow the changing requirements of the users. Sometimes, new connections need to be added to already existing solutions. With iPaaS, it can be rapidly added. 

Hybrid integrations

As discussed above, integration platform is probably the best tool for implementing hybrid integrations. If you need to connect on-premise and cloud technologies, iPaaS is something that you should consider as a tool.

Real-time data

Timeliness of the data is critical for businesses. All the information needs to be available for all the right stakeholders at the right time and the right place.

Data enrichment and validation

It is not enough that the information is available to all parties, but the data has to be correct, too. To eliminate manual processes in the validation and enrichment of the data, iPaaS can automate it to reduce handling times. 

Lower integration costs

No hardware, no software, no upgrades, shorter development times ultimately convert to significant overhead savings. After all, who wants to pay too much for integrations?

In complicated cases, the investment may sound like a big chunk of money. Leaders have started to see integrations as a strategic investment opportunity. For the record a simple dummy example: if you pay a million dollars for integrations in 5 years (which is significantly lower than if you’d have done it by yourself), but you can improve your efficiency and services, and that boosts your revenue by 5 million dollars, was it worth the investment? 

iPaaS market will rapidly grow in the next years

As Gartner has been forecasting, that the adoption of iPaaS would significantly grow by 2022 and the market would be accounted for 4 billion dollars.


There is no doubt in it: during the last few years, we have seen an accelerated speed in adoption to iPaaS. Those that want to stay ahead of the curve are evaluating the platform and implementing their first integrations with iPaaS so that they can initiate digitalization at a faster rate.

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Topics: iPaaS