Installing SaaS applications is easy. It's integrating them that can drive up the cost and complexity SaaS is supposed to avoid.
Companies are turning to software as a service for its cost savings and simplicity, hoping to leave maintenance and upgrades to the vendor. They're finding, however, that management of the integration still falls to the IT organization. Even as SaaS has proved it can handle critical roles at large companies, integration remains far from a drag-and-drop job.
It's a mark of success for software as a service that the pressure's never been greater to integrate it with other business systems. As online CRM tools such as Salesforce (NYSE: CRM
).com become indispensable, companies want to exchange more data with them. For Workday's online software to manage the employee records of tens of thousands of people, companies need a foolproof way to connect it to outside benefits data. And so on. Before you know it, that cost savings and simplicity are gone.
CIOs warn that, in the still-fledgling world of SaaS, buyers can't take for granted the role a vendor will play in integration. Some vendors hand over their Web APIs and a list of third-party integrators for customers to use, others have developed templates for popular business applications that promise to take IT teams step by step through integration. On top of that, there's a growing list of third-party vendors selling appliances, software, and online services designed for the task of integration.
That leads to the question of whether business technology organizations have the right talent, skills, and mind-set for SaaS integration, where the emphasis is at least as much on working with Web APIs and wrangling with SaaS vendors as it is on writing code.
IT'S LEARN AS YOU GO
When Manjit Singh, CIO at Chiquita Brands, signed up his company late last year as what was then the biggest customer of SaaS startup Workday, he learned a key lesson: The SaaS model is still in the learn-as-you-go phase, for both vendors and customers, and CIOs need to make sure the new rules get written in their favor.
Workday, a 3-year-old company founded by PeopleSoft legend Dave Duffield, brings the SaaS subscription model to core business applications, including human resources, accounting, and payroll. Singh chose Workday's HR software to manage absence tracking, benefits, compensation, and career development of 26,000 global employees, which required a big integration project to link Chiquita's outside benefits providers and third-party payroll systems.
Workday took the same approach with Chiquita it had with others, encouraging Singh to install software on site from a partner company called Cape Clear, which offered an enterprise service bus for linking applications using Web services. But Singh wasn't taking a big gamble on SaaS only to end up with more software to manage, so he pushed back. "We decided to hold Workday a bit more accountable for integration," Singh says. "We were happy to write the connection into Cape Clear, but Workday would be responsible for maintaining and managing that connection." Workday acquiesced--and soon after acquired Cape Clear. Workday now sells that middleware layer as a service, tacking on about 20% to the price per seat, says Gartner analyst Benoit Lheureux.
Salesforce--with $749 million in revenue and 41,000 business customers--has played a big part in defining SaaS for businesses, and it's spawned a side industry of companies pitching a growing array of integration options. "It's this whole ecosystem trying to solve SaaS integration in different ways," Lheureux says. In many ways, the options mirror conventional app integration choices.
Want to do the work in-house? There are Web APIs and ERP connectors available on Salesforce's Force.com AppExchange, so experienced IT shops can download to write their own links. Bring in the consultants? More than 40 business partners--companies such as Bluewolf, Boomi, Cast Iron, IBM, Informatica, and Pervasive--offer various ways to integrate systems with Salesforce, from software templates, Web-based integration services, and appliances pre-loaded with integration templates to soup-to-nuts SaaS consulting services.
Salesforce's do-your-own-integration option might appeal to customers looking to save money, since their developers can get tools from Force.com, and it very well might be less painful than a conventional application integration project. Lheureux warns, however, that those developers still will have to learn Salesforce's WSDL, which describes how various Web services work in an API. In fact, all of the Web APIs offered by SaaS vendors are to some degree proprietary, so a developer using multiple SaaS vendors might have to learn a variety of description languages, Lheureux says.
Chris Pokrana, CIO at Points of Light Institute, has seen enough of the do-it-yourself method for one lifetime. In a previous job at the United Way, it took developers more than a year, on and off, to create integrations using Salesforce APIs that fed customer information from a legacy CRM database into Salesforce, and also a link between Salesforce and an online customer portal, which pulled some customer data from the legacy system. "It was difficult, in large part, because of the internal developer time needed to focus on it," Pokrana says.