How — and Why — the Global iPaaS Market is Growing

October 14th, 2019

How long do you flirt with a new piece of enterprise tech before you dive into a committed relationship? 

Integration platform as a service (iPaaS) isn’t exactly disruptive, but it has meant that both enterprises with legacy architecture and major software vendors have had to figure out where it fits in.

In terms of market growth, it seems to be fitting in nicely. 

iPaaS is no longer the new kid on the block — it’s a growing software category around the world. But how and why is the global iPaaS market growing?

In this post, we cover the trends that buyers should be familiar with as they consider an iPaaS solution. From critical acquisitions to surprising numbers, we discuss into the most important elements you need to know about the growing global iPaaS market. 

Along the way, we want to answer two questions: what does the global market growth look like and what does it mean? 

Why all the buzz on iPaaS? 

As with any piece of software, iPaaS has grown in popularity because it addresses the particular needs of the modern enterprise. 

iPaaS is distinct from other SaaS and PaaS solutions because it solves the problem these solutions have created for the enterprise: siloed information and disparate systems. 

| Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) have radically simplified the deployment of consumption of business applications and development platforms. They have also created silos of data that remain difficult to access by other systems. |

Whether adapted from existing enterprise solutions (like TIBCO) or born in the cloud computing age (like MuleSoft’s Anypoint Platform), iPaaS vendors aim to solve the same problem. 

Outside of cutting down on the silos between existing SaaS and PaaS products, the value in iPaaS for modern enterprises is readily apparent: like SaaS as a whole, it saves time, money and effort. “iPaaS enables firms to reduce technology costs, increase data accuracy and reduce time spent on technology maintenance,” writes Brian Cunningham at Bloomberg Professional Services. The platforms “eliminate the time-consuming and expensive task of integrating various systems.” 

IT leaders and C-suite executives alike have caught on to these benefits. Many have already adopted iPaaS as they integrate their increasingly complex systems, while others are getting their respective organizations ready for the adoption. 

For example: TrustRadius has seen a major increase in traffic to our iPaaS category page from 2018 to 2019. Tech buyers are not just becoming more interested in the concept of iPaaS — they are now actively looking for solutions. 

How has iPaaS grown in other areas? 

Market Research Future: How the global iPaaS market is accelerating

There’s no question that iPaaS is growing — the bigger questions are how fast, where and why the niche enterprise solution is growing. 

Research from Market Research Future, published toward the end of last year, goes a long way toward answering those questions. 

“The integration platform as a service market is not just growing, it is accelerating,” according to Market Research Future’s report. “Growing demand for integration platform as a service across various industry verticals is set to drive the growth of the integration platform as a service market.” 

MRF cites the traction cloud computing applications have seen across enterprises and the continual drive for increasingly efficient processes as the two biggest factors in driving this growth. One has normalized the use of cloud storage and SaaS models for enterprise, while the other has translated into a heavy demand for integration platforms as enterprises seek an efficient way to both develop and manage an increasingly complicated mix of enterprise applications. 

The same report estimated that the global iPaaS market will generate about $2 billion by 2023, growing 22 percent annually between 2017 and then. 

Currently, North America is the largest market for iPaaS and is expected to maintain that share five years from now. At the same time, MRF predicts the Asia Pacific region will grow the fastest from 2019 to 2023. Here’s the report’s commentary on the importance of iPaaS in these markets: 

“The growth of the market in North America region is attributed to technological advancements along with increased adoption of integration platform as a service application across various industry verticals. The key reasons for the high growth rate in Asia-Pacific are increased spending on IT infrastructure, rising cloud-based applications, and also growing demand for automation of processes.”

The underlying motivations for the rapid adoption of iPaaS are focused on both short term efficiency and long term growth. So how will this growth take shape? 

iPaaS is both growing and consolidating — a boon for tech buyers

Salesforce has made headlines again and again the past couple of years — two of the most notable being the tech giant’s acquisition of MuleSoft last year and its purchase of Tableau this year. Both acquisitions have seemingly set the stage for the shifting shape of the global iPaaS market. 

But how can one pair of acquisitions have that much of an impact?

“MuleSoft’s specialty is integration — linking the corporate IT infrastructure of one company to that of others and unifying apps and databases into global B2B systems,” write Scott Robinson and Lucina Health at TechTarget. “This potentially moves Salesforce to the head of the enterprise cloud pack, making it easy to incorporate Salesforce functionality into existing business systems.” 

While Salesforce already had the AppExchange, with Mulesoft they now control Anypoint, a two-in-one API library and platform designed to consolidate enterprise applications for a nearly seamless interface. 

Salesforce isn’t the only enterprise vendor that sees the promise of iPaaS for continuing to deliver new value to customers. Two other legacy software companies — TIBCO and Software AG — both acquired integration-focused companies this past year, in the form of Scribe and Built.io

The simultaneous growth and consolidation of the market is certainly shaping up to be a trend. In fact, Gartner predicts continued market consolidation for the next five years: according to its recent report, two-thirds of existing iPaaS vendors will merge, be acquired or exit the market by 2023. 

This is good news for those looking to purchase iPaaS in the near future. It should translate into stronger platforms backed by legacy businesses ready to handle profitability and development challenges. “Megavendors such as Oracle, Microsoft and IBM are better-equipped to handle those challenges as they offer more-competitive offerings with more-aggressive pricing and packaging options than smaller players in the market,” the report states. 

“For organizations looking to purchase an iPaaS solution, this is good news. They can capitalize on the evolving market dynamics by solving short-term/immediate problems today, while preparing to adopt another iPaaS offering from an alternative vendor as the expected market consolidation accelerates through 2023.”

~ Bindi Bhullar | Senior Research Director | Gartner 

The movement in the market is far from chaotic; instead, it signals that iPaaS will soon become integral to any enterprise. And as the market grows, both vendors and buyers are digging into how to expand and use iPaaS, respectively. 

Tech buyers and vendors are digging deeper into iPaaS 

As iPaaS grows from new product category to an essential enterprise solution, buyers are starting to move past window shopping and into serious product considerations.

TrustRadius has seen a huge influx of traffic to not only its iPaaS category page, but also product comparison pages. 

From 2018 to 2019, the iPaaS category page saw a 43 percent increase in traffic while the iPaaS product comparison pages saw a 44 percent increase in traffic. Over 94 percent of this traffic is still organically-driven. They’ll land on TIBCO, for example, and then click through to the comparison tool, which allows them to compare Zapier to both Oracle Data Integrator and Mulesoft Anypoint Platform. Here they can compare reviews, features ratings, pros and cons, usability scores and more. 

This depth of traffic indicates that buyers are no longer simply exploring what iPaaS is or thinking long term. Instead, they seem to be actively looking for a solution they can implement next year or even next quarter. They are building product lists to inform later buying decisions. 

For more info, check out our guide to the best iPaaS for enterprises

At the same time, iPaaS vendors are exploring ways to expand the use cases for the solution. API management is the clearest use case at this point, but the platforms can also be used to support an increasingly complex Internet of Things and broader big data for enterprise. 

There’s a reason Salesforce bought Tableau: bringing iPaaS and data analytics together means bringing critical data out of silos and into the workflow of the entire enterprise. “iPaaS is simply a means of data integration and a modern successor of the classic [extract, transform, load] tools to consolidate data for driving better business decisions,” writes Olga Annenko at DZone.

It’s also part of what is driving the consolidation described above — big players can bring all of these seemingly disparate use cases together under one roof. 

For iPaaS, it’s a question of when not if. And once you know when, the bigger question becomes how you will use iPaaS in your stack.