It’s undeniable that technology has grown in scale, complexity, and usage in the business world, at tech and non-tech companies alike. But this growth has raised concerns and questions about how to manage all of these important applications. The exponential growth in data and corresponding communications between various software is quickly expanding beyond anyone’s ability to manually process. The answer? iPaaS software.

Table of Contents:

• What Is iPaaS?
• What Can It Do?
• Why Is It Important?
• Benefits of iPaaS
• iPaaS Jargon
• The Future of iPaaS

What is iPaaS?

iPaaS stands for Integration Platform-as-a-Service, which are cloud-based systems that host the integrations between various software applications.

 These platforms have been incredibly valuable, as the last decade has seen sprawling Software-as-a-Service (SaaS) environments like never before. By utilizing cloud-based structures and a visual user interface, iPaaS are relatively lightweight solutions to the dozens, hundreds, or even thousands of individual integrations that modern businesses need (such as CRMs, marketing automation platforms, project management tools, etc.). Even better, these tools typically don’t require prior coding experience, so you don’t need to be a developer to use them.

Technically speaking, iPaaS is a subset of the Platform-as-a-Service (PaaS) category, which provides systems for developing and deploying applications. Within this ecosystem, iPaaS specifically handles the interactions between applications.

iPaaS vs. SaaS: How to Distinguish

iPaaS can be thought of as the connections between software applications, ensuring that they operate and integrate properly. If a software ecosystem were a building, SaaS applications would be the bricks, while the iPaaS platform acts as the mortar between them, maintaining stability.

What Can iPaaS Do?

So how does an iPaaS platform function? They need to be able to integrate thousands of different possible options, including ones that may not exist yet. Several factors that contribute to iPaaS’s adaptability include:

Prebuilt Connectors

Most vendors provide prebuilt connectors between highly-used applications like Salesforce or Slack. These are typically listed on their site so you can see if an iPaaS has the connectors you need. The standardization of these prebuilt connections makes it easy for other tools to integrate with, increasing adoption without requiring extensive development.

Customizable Integrations

For more specialized integrations or connectors, iPaaS platforms may offer customizable solutions or build-your-own capabilities for tech-savvy users. They also provide prebuilt APIs and the ability to manage native and third-party APIs on the platform. This means that if the prebuilt connectors mentioned above don’t fit, you can tweak the data connections to meet your needs and still work seamlessly with the iPaaS.

Workflow Automation

Workflow automation is a near-universal aspect of current iPaaS, simplifying the process of getting data from one application to another. On top of transferring information, iPaaS integrations can also automatically transform it into the correct structure or format for the receiving application. This can range from standardizing date formats and phone numbers to more robust transformations like converting data types into usable formats.

User-Friendly UI

While there will always be some variations between iPaaS product capabilities, the market standard is quickly moving towards easy-to-use drag-and-drop interfaces. Between the UI and the prebuilt connectors, iPaaS administrators can go “low-code” or even “no-code” when using the platform, making it even easier to set up and adopt into existing workflows.

Why is iPaaS Important?

The iPaaS market has grown to nearly $13 billion in 2024, with estimates expecting it to surpass $78 billion by 2032. This starts to put its importance into perspective. The category’s massive growth has been driven by the rapid pace of SaaS expansion. The sheer number of available applications, from niche, industry-specific tools to broad platforms or cross-industry communication tools, creates a need for these applications to talk to and share information with each other concurrently.

This scales quickly — large organizations with unique application requirements for each team can add up to hundreds of application deployments. Many of these apps need to integrate with each other, particularly between close-working departments like Marketing and Sales. This prevents data silos that can directly affect agility and ultimately, competitiveness.

Benefits of iPaaS: Why Should You Adopt it?

Clearly, the iPaaS market is experiencing explosive growth and is expected to continue (if not accelerate) in the next five to ten years. But what concrete factors actually contribute to their value as a foundational tool?

• Scalability: As your business adds more applications, data sources, etc., iPaaS is designed to grow with you, allowing you to turn tool sprawl into effective workflows for your team while minimizing stumbling blocks.
• Time Savings: Automated communication and data transfers between your programs mitigate routine tasks that suck up valuable time and the frustration of manually converting data formats.
• Ease of Use: iPaaS was first designed for the integration needs of small and mid-sized businesses. With this group in mind, iPaaS vendors continually strive to make the technology more and more intuitive, in contrast to complex legacy systems that often require IT management.
• Reduced IT Burden: On that note, IT’s burden of managing an organization’s integrations is eased, allowing them to focus on tasks and issues that can’t be outsourced or automated.

Examples of iPaaS: From Small Business to Enterprise

While originally designed for small and medium-sized businesses, the iPaaS market now offers plenty of options for organizations of all sizes. Large enterprises benefit from the increased speed of building integrations between their applications within an external iPaaS platform, as well as centralizing that integration into a single interface. In particular, a class of Enterprise iPaaS (EiPaaS) has emerged to address the scaled needs of these massive companies. Vendors that specialize in enterprise use cases include Informatica, Dell, and Oracle.

Small to mid-sized businesses can also reap the benefits of iPaaS. Some vendors, like Zapier, are designed to service the integration needs of smaller organizations, with an emphasis on automating processes like notifications, updating customer data, and more. Others focus specifically on services for very small organizations, with examples including products for syncing customer data (such as HubSpot Operations Hub) or enabling cross-platform communication with customers (like IFTTT).

How is Embedded iPaaS Different?

While standard iPaaS platforms are primarily used for internal integrations within an organization, embedded iPaaS systems are targeted at integrations between a single SaaS company and its end users. Think of iPaaS as a decentralized web that connects all applications within an internal environment, versus embedded iPaaS connecting all of your major applications back to a single tool. For example, HubSpot’s CRM can integrate seamlessly with tools like Marketo, Mailchimp, Shopify, Asana, and payment gateway platforms.

What are iPaaS & ESB?

Historically, Enterprise Service Bus technology (ESB) bore the brunt of businesses’ integration demands. While both ESBs and iPaaS focus on integrating technologies across a business, there are important differences between the two:

• iPaaS hosts the integrations between a business’s applications and data sources (typically in the cloud), particularly SaaS.
• ESBs are an on-premise communication system that transfers data between components within a business, usually with legacy systems. They’re designed to handle relatively complex and high-volume integrations.

Some might simplify the distinction to “iPaaS is replacing ESB,” but there are important cases where ESBs are still the right solution.

Key Difference #1: Deployment (On-Premise vs. Cloud)

ESB products predate the explosion and standardization of cloud-based development, so the software is deployed on-site. For IT teams that require on-premise software, such as for security reasons, ESB’s ability to be deployed on-site can make it more appealing than iPaaS. On the other hand, iPaaS is the leading solution for cloud-based deployments. As cloud-based technology has become normalized, iPaaS emerged as an invaluable foundation for many ecosystems and workflows.

Key Difference #2: Integration (Vertical vs. Horizontal)

ESBs tend to be optimized for integrations between complex legacy, on-site, or internal systems. In contrast, iPaaS specializes in integrations between third-party apps and data sources that the organization uses (often referred to as horizontal integration). Note that there is some convergence in ESB’s and iPaaS’s ability to integrate vertically and horizontally. iPaaS solutions have been making strides in hybrid integration (more on this below) between SaaS and on-premise applications. At the same time, ESB solutions are developing support for SaaS integration.

Key Difference #3: User base (IT vs. Non-IT)

ESBs are often run by an enterprise’s IT department, while iPaaS are generally used by business personnel with less technical backgrounds. Some of this comes down to iPaaS emphasizing usability, but ESBs often don’t have the ability for multiple people in different locations to access and use the same data at the same time. Because of this, iPaaS has enhanced user accessibility, while ESB tends to encourage a stricter delineation of roles between IT and the rest of the organization.

How to Choose Between ESB & iPaaS

Given the differences between ESB and iPaaS, which situations are each product best suited for? If you’re looking to integrate systems and IT architecture that are internal to the organization, on-site, or legacy systems, ESBs may be better equipped. For most other integration cases, an iPaaS will be the best product to meet your needs. If you primarily want to integrate external applications, SaaS, and data, iPaaS has a much more robust toolkit and structure for managing them.

One notable case that highlights iPaaS’s growing utility is the expanding Internet of Things. Device integration is one of the most rapidly expanding markets for integration, which demands the kind of immense real-time, horizontal integration that iPaaS specializes in.

More Acronym Confusions: iPaaS vs. ETL

ETL stands for Extract, Transform, and Load. While similar to iPaaS in that they both involve data integration, iPaaS focuses on integrating multiple systems with real-time data flow. ETL instead deals with pulling data from multiple sources before converting it into a consistent format for use in a single, centralized database.

ETL’s three-step process starts with data being Extracted from external sources, then is Transformed into a format usable in the receiving source, and finally Loaded into its destination (usually a data warehouse or repository). This used to be performed by standalone ETL products, but the functionality has been rolled into most iPaaS products at this point.

Understanding Other iPaaS Jargon

For those looking for business software, it can sometimes be an uphill battle to even understand all of the different acronyms and vocabulary. To help translate the common terminology that you might find in iPaaS product descriptions and vendor sites, here are some of the features and concepts that tend to cause buyer confusion:

Multi-Tenant Architecture

Multi-tenancy is a core feature that differentiates iPaaS from other integration solutions. This structure enables multiple clients or users to simultaneously access and use a vendor-hosted platform rather than hosting the platform themselves. Multi-tenancy essentially outsources much of the integration burden from your IT team because the vendor handles maintenance and hardware upkeep. It also keeps costs lower because you don’t have to buy and manage the integration infrastructure, just the end data.

Batch vs. Real-Time Integration

Batch and real-time integration refer to how often data is transferred between sources on the platform. Batch integration is when data is collected from incoming sources and updated either at given time intervals or in response to an event occurring. As the name suggests, real-time integration iPaaS continually checks for new data to transfer or update instead of waiting for event triggers to prompt integration. This results in more up-to-date and unified data across your systems, but also tends to be more resource-intensive and often comes with a higher price tag.

Data Mapping

iPaaS employs data mapping when assigning information from incoming sources to fields in the receiving data source. For example, say a prospective client fills out a lead form on your website that has their name, email, organization, and availability. The integration between the lead form portal and the CRM must know where each of those pieces of information goes in the CRM, or where each data point is “mapped” to. Keep in mind that automatic data mapping can save a lot of time if your data is fairly straightforward, but irregularities or quirks in data structure can cause automatic mapping features to struggle.

RESTful API

APIs (Application Programming Interfaces) can be thought of as a standardized connector that a program can communicate with external systems and queries through. APIs are a core part of most iPaaS platforms — the most popular type is RESTful API, largely because of its widespread accessibility and use. This means more things (applications, devices, and integration platforms) can interact with software that has a RESTful API while requiring less initial development, customization, and configuration. iPaaS support for RESTful API matters most for developers who want to build their own API or if you need to make your custom integrations in an enterprise context.

Hybrid Integration

iPaaS that support “hybrid integration” enable integration between on-premise and cloud-based systems. On-premise systems include anything that is hosted on-site, such as data warehouses and legacy systems. Cloud-based programs encompass most other systems and apps, which have become the norm in the last decade. Most larger iPaaS products integrate both on-premise and cloud-based systems, but there can be differences in how effective these integrations are. Oftentimes, reviewers can provide some of the best insights into how well hybrid integration works in practice.

Hybrid Deployment

Where “hybrid integration” refers to what systems iPaaS can integrate, “hybrid deployment” refers to where and how the iPaaS itself is deployed and hosted. When iPaaS is deployed as a hybrid platform, some components are hosted in the cloud and some are on-premise. This contrasts with the iPaaS norm, which is to be hosted entirely in the cloud and managed by the vendor, as discussed with multi-tenancy above. If you know you need to host some parts on-site, be sure to ask vendors about your specific deployment scenario when evaluating products.

Microservices

Microservices is a programming structure where an application is built as a series of components that can exist and operate independently. This contrasts with “monolithic” architecture, in which an app is built as a single unit. Monolithic software tends to be more difficult to update and requires more downtime for maintenance. For integration, if microservices share a standard protocol (such as a RESTful API), they can be used by other services or apps without direct coupling. Most users would benefit from a platform built as microservices because it means they may not have to buy bundled services and platform add-ons that they don’t need.

The Future of iPaaS

iPaaS is a relatively new category of software and is rapidly evolving to better serve companies like yours. For example, our research on buyers’ experiences with iPaaS indicated that buyers frequently purchase more capabilities than they actually need. As a result, vendors are beginning to structure more iPaaS products as microservices, which leads to faster product development and easier isolation of components.

Ultimately, the key benefits of iPaaS for business are the integrations between cloud-based applications and software without using on-site hardware or coding knowledge. As iPaaS continues to evolve to provide greater functionality and ease of use, they also become increasingly feasible for people and businesses of all kinds to use.

Find the Right Foundation for Your Ecosystem

When you buy your next software or onboard a new program, consider how you want the program to interact with the rest of your ecosystem. If it’s time to make integration a feature instead of a roadblock for your business, iPaaS is the answer. While we’ve covered some of the jargon and aspects of these products in this article, there’s no better source of information than real users. We’ve collected thousands of unbiased, verified user reviews on dozens of different iPaaS options so you can find the right one for your organization. Find platforms with free trials, comparisons of prebuilt connectors, real-time or batch integrations, and more by browsing the list of iPaaS tools here.