What is application integration? 

Application integration has existed—in one form or another—since the dawn of the software era. In the early days it was a labor-intensive practice: developers would write bespoke point-to-point integrations—essentially sections of code—to connect individual pieces of software. This approach delivered quick results but was hard to maintain and difficult to scale. Enterprises needed a dedicated engineering team to re-create their work for each new project and update integrations in response to software changes. 

Over time, the industry embraced the concept of an integration platform: software that provides a centralized framework to deploy and maintain integrations in a more systematic manner. Integration platforms today connect a wide variety of applications and databases—from SaaS apps and B2B systems to core enterprise resource planning (ERP) software that’s used to manage finance, human resources, supply chains, procurement, and other day-to-day business operations. 

Application integration platform technologies have evolved in style and function over the decades.

• Early platforms utilized a hub-and-spoke style of architecture, which connected individual applications (spokes) to a hub that functioned as a central integration engine. With the hub as a centralized component, this reduced the need for maintaining multiple configurations, but it also introduced a single point of failure.
• The hub-and-spoke approach eventually gave way to the enterprise service bus (ESB), a more decentralized architecture, which enabled communication between mutually interacting applications. The ESB approach reduced the risk of bottlenecks and remains in use today to integrate some legacy on-premises systems. Nonetheless, it contains build-in complexities that require programming expertise and are not designed to work with cloud-based technologies or hybrid integration systems.
• Today, enterprises are increasingly turning to cloud-first integration platforms that are accessible to less technical users and offer a choice of essential technologies from loosely coupled ESB model to microservices to API-first integration to advanced protocols for data integration. These offer a stable, secure, and scalable way to link and orchestrate both on-prem and cloud applications.  

These cloud-first platforms tend to be more user-friendly than their predecessors: some interfaces require little to no coding at all. Yet they’re robust enough to handle complex integration tasks and bridge the latest customer-facing apps with legacy systems that may be decades old. 

An integration-platform-as-a-service (iPaaS) is a cloud-based platform that contains automated tools for creating and managing integrations. An iPaaS makes it easy to share data between different applications deployed in different environments—including on-premises, in public and private clouds, and SaaS. For example, businesses can link data from marketing and sales to get a clearer view of what’s attracting new customers; or integrate apps for messaging with inventory management, to get instant notification when orders are fulfilled. 

An iPaaS typically includes the following features: 

• All come with a stockpile of pre-built connectors that lighten the load on in-house developers.
  
• Most offer intuitive dashboards; many are moving toward low code/no code drag-and-drop capabilities accessible to so-called “citizen integrators” who lack a detailed programming background.
• Some offer more heavyweight capabilities—meant for developers who want greater control, and more power to build complex hybrid integrations involving multiple clouds and legacy systems.  

Most iPaaSes today belong to one of two categories, both of which come with limitations. One specializes in ease-of-use for citizen integrators, though it sacrifices power. The other, engineered for the IT elite, offers the most robust set of tools for complex hybrid integrations, but is less user friendly and harder to scale quickly across projects. Many enterprises seek to overcome this by using multiple platforms, sourced from different vendors. Yet this approach can be costly; it also tends to lead to duplicate integrations—or even “shadow integrations” created by well-meaning business users that lack proper governance and IT support. 

A new category, known as the Super iPaaS, has recently emerged, which combines the capabilities of a heavyweight IT-focused and lightweight project-oriented iPaaS into a single platform. The Super iPaaS enables a robust form of hybrid integration that brings together applications, APIs, events, data, and B2B. It’s powerful enough to tackle the most complex integration projects, with an ease of use that’s accessible to citizen integrators. It also comes with a centralized user interface that supports enterprise-wide governance, thereby minimizing challenges posed by duplicate and shadow integrations. 

Application integration and data integration are related concepts that both shape the sharing of information within an organization. Whereas application integration enables different software systems to function together, data integration is all about data consolidation and harmonization. At its core, it entails combining data from a variety of formats and sources and uniting it into a single dataset to support business intelligence and analytics. Working from this dataset, with a unified structure and view, different business units can better align their operations. 

Data integration has evolved rapidly in recent years as the sources and volume of data generated by businesses, consumers, and machines across the globe have skyrocketed. Until recently, data integration primarily entailed the processing, mapping, and structuring of data collected from processes that were already complete. Today, the demand for real-time services—that leverage new sources of data such as IoT, APIs, cloud applications—along with advances in computing power, analytic tools, and AI/machine learning, mean the data integration process is increasingly continuous, bringing together data and application integration. Rather than “at rest,” data is increasingly transformed “in flight.” 

DataOps—a set of practices and technologies to operationalize data integration—has matured in response to this demand for always-on self-service data. The best DataOps services offer continuous data pipelines that work by pulling raw data from its source, applying rules for transformation and processing, and pushing it to applications, dashboards, or machine learning/AI systems. These services are most effective when coupled with a platform also designed for the integration of applications. A manufacturer employing IoT-enabled devices, for example, can leverage the analytics this joint approach makes possible to better monitor for system failures, schedule predictive maintenance, and learn how to optimize processes for greater efficiency.  

Although DataOps services and application integration software have traditionally been sold by separate vendors, some now offer hybrid integration platforms with access to both. This gives enterprises even more power to capture value from data as it moves between on-premises and SaaS applications, data streams, legacy data stores and cloud data platforms. 

As connectivity—and leveraging data—becomes ever-more important, enterprises are modernizing legacy systems and adopting more agile integration strategies. This is taking place across a range of industries—and within individual departments. Some application integration examples of both include the following:

Integration by industry:
 

• Banking. Better integration helps financial institutions introduce new digital channels and customer-facing apps; drive new streams of revenue through partnerships with non-bank institutions; and more effectively respond to regulators demanding data. 
• Manufacturing. APIs and integration help manufacturers build more agile, efficient, operations—through improved supply-chain management, better monitoring of production lines, and more transparent sharing of products and pricing.
• Logistics. In the logistics business, there’s always risk of something going wrong—from bad weather, to mechanical failures, to ever-changing industry requirements. Integration allows logistics firms to leverage data that makes them more flexible, responsive, and resilient. 
• Retail. In an industry built on blending brick and mortar with digital, integration helps retailers connect e-commerce platforms, manage inventories, and meet ever-evolving consumer expectations. 
• Insurance. Integration allows insurers to make the most of data—to help customers find the right policies, faster, and drive a more transparent claims filing process. 
• Utilities. As the world turns toward greener forms of energy, utilities are adopting smart technologies to drive efficiencies, cut costs, and increase sustainability. Integration is essential to connecting the systems that enable this.   
• Communications. The world of telecommunications demands constant innovation—to rollout new network technologies, introduce new consumer products, and drive infrastructure changes to meet demands for sustainability. All of this demands seamlessly connected systems, applications, and data. 

Integration by department: 
 

• Marketing. Integration helps marketing professionals stay a step ahead—by making use of data driven programs, truly automated workflows, and syncing marketing platforms with sales & CRM for a 360-degree view of their customers.
• Sales. The best performing sales teams are those that know how to streamline processes, leverage data, and deeply understand the needs of their customers. Integration brings together all the steps it takes to close a deal—across all teams, steps and systems.
• Finance. Enterprises rely on integration to optimize financial health—by automating standard processes to save time and reduce errors, ensuring end-to-end visibility of the entire revenue process, and—in case of audit—being ready with the information they need when they need it.  

Application programming interfaces—or APIs—are a standard set of protocols that enable applications to communicate with each other and exchange information. They act as gateways, or messengers, between applications, offering a set of defined rules that allow applications to “talk” to each other and exchange services or data.  

APIs can be thought of as a set of tools used in service of the broader application integration discipline. The services that APIs connect are often application integrations themselves. Some application integration platforms offer API management capabilities, which aid users in designing, developing, deploying, versioning, and retiring their APIs, while governing them in a way to minimize risks that can arise when APIs are broken, exposed, or poorly configured. 

While APIs have long been a programmer’s tool of choice for communication between applications, they are increasingly being used as the basis for new services and business strategies. They’re particularly well suited for developers looking to expose information to third parties and leverage third party systems and products. For example, they’re key to enabling banking-as-a service, whereby banks embed financial services into the products of non-bank partners, which helps them gain new customers and open up new streams of revenue.  

With the acceleration of digitalization, and migrations to the cloud by a growing number of businesses, APIs have become more important than ever. In a 2022 Software AG survey of more than 1,000 IT decision makers, 85% reported using APIs in all or the majority of their innovation projects. Collectively, the respondents singled out five key benefits that APIs bring to their organizations: 

• On-prem/cloud integration. APIs make it easier to integrate cloud applications and services with non-cloud and legacy systems. 
• Flexibility. Developers working with APIs have more options to build, scale, and update system architecture in response to changing requirements. 
• Customer-centricity. APIs make it easier to leverage data to create personalized customer experiences.
• B2B. With APIs, businesses can more easily share information with partners and develop new joint products and strategies for monetization. 
• Speed. APIs help developers build faster—reducing the time to market for new products and services.  

When most people think of automation, they likely imagine robots on factory floors, or perhaps new tools of generative AI that can deliver surprisingly compelling text, images, or other creative content with a short prompt and click of a button. Yet automation is transforming businesses behind-the-scenes as well. In nearly every sector, enterprises are adopting software systems that automate key processes—from managing inventories, to fulfilling orders, to collecting and storing customer data. When done right, automation can enhance productivity, drive a more seamless customer experience, and boost employee satisfaction—by freeing up time to focus on more strategic, creative work. 

There are two main types of enterprise automation and application integration is critical to both: 

• Workflow automation focuses on the management of tasks within a specific business unit or workflow. It’s designed to eliminate repetitive, manual tasks while helping enterprises achieve greater consistency, standardization, and improved productivity.  
• Process automation entails the automation of entire end-to-end processes, which often involve multiple systems from all corners of the business. Rather than individual tasks, its focus is complex, multi-step processes that tend to have more tangible business outcomes—like boosting sales or minimizing product time-to-delivery. 

Both types of automation are only possible when independent applications are synced and able to collaborate. Fulfilling an order from an online retailer, for example, will entail a multi-step process that involves separate pieces of supply chain management, warehouse management, and enterprise resource planning software. Through an integration platform, or iPaaS, data from one of these applications can trigger actions in another, reducing the need for manual interventions, ensuring information flows smoothly between systems, and improving data accuracy. This also provides greater visibility, which helps enterprises identify and eliminate bottlenecks, while generating analytics to drive process optimization.  

While there’s no one-size-fits-all approach to application integration, there are best practices developers can keep in mind to ensure their integration projects accomplish both IT and business objectives—today and in the future. The following four tips are especially relevant for businesses that are considering, or already maintain, an API-first integration strategy—with an eye toward innovation, security, and a more targeted, responsive, customer experience. 

1. Determine when API-first is best.
It’s no secret that APIs have become indispensable: Not only do they enable systems foreign to each other to “talk;” in doing so, they dramatically simplify app development—and the ability of business and IT teams to collaborate. Nonetheless, all enterprises face a choice in how to approach API creation—and the path they take on a specific integration project can have long-term implications.

• An integration-first approach begins by building custom integrations to facilitate communication between existing backend systems. APIs are then added as a standard interface and consumer facing apps are connected to them. This approach is often best when dealing with legacy systems that are difficult to modify; if the business processes demand highly customizable integrations; or if constraints on time and budget prohibit the design and development of APIs from scratch. In the long run, however, it can potentially limit flexibility and is more difficult to scale.
• An API-first approach, by contrast, begins at the front-end—with the definition of a consumer-facing API designed to meet the needs of a new application. The app and back-end services are then developed in parallel before the API itself is connected. This approach can take longer to implement, but it tends to lead to more robust, standardized, and future-proof integrations. It works best in cloud-native environments and/or when an enterprise intends to collaborate regularly with external partners, developers, or customers.

2. Know the role of microservices.
Microservices are an increasingly popular means for building and integrating applications. Their ability to break down applications into smaller, loosely-coupled services—each handling a specific business capability—simplifies the integration process. It also makes it easier to scale specific services based on demand: an e-commerce website with a sudden spike in traffic, for example, can quickly add more instances of its microservices to ensure there’s no downtime or disruption.

Implementing microservices can nonetheless be difficult: Building and managing multiple services requires substantial development, deployment, and maintenance efforts. Luckily, there’s software designed to create, run, and manage microservices with greater automation—to get projects off the ground quickly, and manage them without overburdening IT. Learning more about this type of microservices platform would be a good first step for any business that seeks to do more with integration, faster.

3. The importance of good governance.
Governance is a key consideration for any enterprise building or improving an application integration strategy—especially those that utilize an API-first approach. Although APIs have become essential to connecting end users to applications, and probing deep into an enterprise’s systems of record, they also introduce risks—like hacks and data breaches that can reveal highly sensitive customer information. 

Businesses that employ a tight system of governance to protect the data APIs expose—and maintain clear visibility throughout the entire API lifecycle—are best placed to minimize these risks. A comprehensive API management platform can be an indispensable tool of doing this, helping developers create, test, release, and monitor new APIs without causing service disruptions and with a laser-focus on security.

4. Put customer needs first.
No matter the industry, business success demands building and maintain strong relationships with customers—whether they are partner organizations or end users of a given product. A robust integration strategy should prioritize their needs first—by making it easy for them to access necessary data, and even employ application developers to engage with relevant APIs directly.

A great way to do this is by adopting an API portal: a place where programmers can access a company’s APIs and add their own capabilities, without having to build them from scratch using data they might be otherwise unable to access. An API portal functions as a storefront for developers to find, try, and by an enterprise’s APIs, while also providing feedback that can help improve them. 

Integration has long been Software AG’s flagship. webMethods, an enterprise software company we acquired in 2007, was an application integration trailblazer and has driven the evolution of our integration products ever since—from the days when ESB was cutting edge, to the present era of the iPaaS. This ongoing growth of our on-premises and cloud integration offerings has kept us at the top of the business—with regular rankings as market leaders from industry analysts like Forrester (Wave) and Gartner (Magic Quadrant). 

Today, Software AG approaches application integration as part of a broader focus on boosting connectivity across the entire enterprise. It’s a strategy borne out of some longstanding iPaaS limitations. An iPaaS is ideal for integrating SaaS applications. However:  

• It typically won’t connect new cloud apps with decades old on-premises applications  
• It doesn’t offer sophisticated data pipelines—to unlock insights from all corners of an organization 
• It often won’t work across borders without breaking rules for data residency 
• It typically sacrifices power for ease-of-use or requires highly trained IT experts to build, deploy, and maintain 

As a result, enterprises end up using multiple, disparate, integration tools across different teams and different countries. This leads to higher costs and greater complexities, as well as more risks related to security, privacy, and regulation, while making it more difficult to harness the data they need to drive innovation. 

Software AG’s application integration offering is an all-new category of iPaaS—the Super iPaaS. It’s a single, unified integration platform that can be managed centrally, and used across an entire enterprise. It includes five core integration patterns: 

• Application integration, to connect applications in the cloud, on-prem, and in-between 
• Data integration, via pipelines that fuel analytics and automatically adapt to change 
• API management, to manage and optimize APIs with complete control and visibility 
• B2B integration, for easy, reliable transactions with any partner or supplier 
• Event integration, to make the real time connections necessary to operate in an event-driven architecture 

The Super iPaaS consists of other must-have components, as well. It offers cloud-first end-to-end hybrid integration, connecting legacy mainframe applications with those in the cloud. It has centralized management capabilities that guarantee strong governance while meeting demands for data sovereignty regulations across all global jurisdictions. It comes with a common, citizen-developer friendly user interface. And it leverages the power of generative AI so that users can interact with it more intuitively, in a manner that’s more productive.  

All of this makes it the most advanced integration platform ever built: The most recent Forrester Wave (August, 2023), cited Software AG as a leader with the highest rating in both the “current offering” and “strategy” categories, among 15 iPaaS vendors. 

If you’d like to learn more about Software AG’s approach to integration, and the promise of this new approach, please get in touch. We’d be happy to share more of our expertise.