The Beginner’s Guide to Embedded Integrations
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What are embedded integrations?
If you work in software, API integrations for your product to your customers’ tech stack are no longer a nice-to-have. Your customers expect them. With the average enterprise using more than 1,200 applications, your customers are using more disparate apps than ever, and none of them “talk to” each other natively. As a result, procurement leaders rate a lack of integrations as a top 3 obstacle to effectively applying technology. It’s imperative that independent software vendors (ISVs) provide the integrations between their own products and other important software tools their customers demand. For product management and IT leads, consider this blog your crash course on embedded integrations.
Failing to offer the integrations that new sales prospects are in the market for means losing valuable deals. Failing to deliver the integrations your customers expect puts important customer accounts at risk. As such, more software vendors are turning to embedded integrations. Embedded integrations are API integrations you can rapidly spin up within your own software products to connect to the apps in your end customers’ tech stacks. By using a modern embedded integrations platform to swiftly provide embedded integrations, you can improve customer satisfaction while enhancing your product’s stickiness. In fact, having active integrations between your product and your customer’s software stack can significantly reduce customer churn. As your end customers set up more data sources to flow mission-critical data across your products, your software products increasingly become an essential part of their infrastructure.
Poor integrations are one of the biggest obstacles to being successful with technology. Image courtesy Deloitte.
There are different ways to deliver integrations to your end customers. Some software companies choose to either use their own engineering resources to build integrations in-house, to work with an external systems integrator (SI) that manages integrations, or to use a third-party embedded integrations platform to deliver integrations faster..
How embedded integrations platforms empower ISVs
An embedded integration platform, or embedded iPaaS, empowers software companies or services organizations to spin up and deliver integrations to their end customers. Best-in-class embedded integration platforms offer a visual, low-code interface that enables faster implementation, testing, and iteration, rather than having to code up every individual integration by hand. Teams can deploy an embedded integration platform as an internal solution for creating bespoke integrations for customers or as a seamless, white-labeled extension of your application that lets end customers directly set up their own integrations via a configuration wizard.
Though relatively new to the market, embedded integration platforms are quickly becoming a game-changer for software providers. As vendors deal with the aftermath of the “SaaS explosion”–a huge increase in the number of apps businesses use, they face an incredibly competitive market, as well as a software ecosystem in which their customers use hundreds of other apps. Gartner forecasts that enterprise SaaS spending will grow 11.5% in 2022 for a total of $669B. To stand out in a competitive market, software vendors must offer integrations between their products and the tools their customers use, or risk losing market share to competitors who offer a broader and more-robust integration portfolio.
Experts forecast enterprise software spending to continue growing through 2022. Image courtesy Gartner
The integrations challenge: iPaaS and beyond
Companies rely on hundreds if not thousands of different apps. Many applications are point solutions, addressing limited use cases for a business. Put simply, the average enterprise uses many applications that focus on executing a limited number of processes; for example, CRMs such as Salesforce, Microsoft Dynamics, and SugarCRM specialize in acting as a system of record for sales, for instance. But most point solutions don’t focus on connecting natively to other tools so that you can flow data across them as your business needs.
90% of companies see digital transformation as a CX imperative. Image courtesy BCG Group
The integration challenge has only become more urgent as a result of the pandemic. 90% of enterprise leaders plan to accelerate their digital transformation initiatives–the implementation of digital technology across an organization, especially with regards to migrating from legacy on-premise systems to the cloud. Many companies have adopted more cloud-based software to help promote connection and collaboration among teams in an increasingly remote work environment, as well as to modernize their tech stack and give teams the power to respond more quickly to customers and provide improved customer experience (CX). However, expanding tech stacks often compound an ongoing issue so many enterprises face: data silos.
A data silo occurs when teams create and manage data within an application that isn’t integrated to any other application. As a result, teams can’t flow their important data to other applications, and instead have to spend hours manually downloading or copy-pasting data across various apps. Many apps don’t offer out-of-the-box native integrations to other tools. Apps that do offer integrations may not offer the custom integration functionality your team needs to tackle its unique business challenges. As a result, companies are increasingly carrying the burden of supporting integrations for their tech stack, across the organization in line-of-business (LOB) teams such as sales, marketing, finance, and HR, as well as within technical teams such as IT. And they’re passing on their integration woes to their software vendors, expecting new technology acquisitions to offer pre-built integrations to their many, many different tools, from day one.
Some businesses are taking the route of using integration solutions to stand up their own integrations, the most common being iPaaS–or “integration platforms as a service.” The promise of traditional iPaaS has always been about integrating technical tools at the API level to unsilo them, so that teams can freely flow data across them. The reality of traditional iPaaS is heavyweight technology, from both a usability and a pricing standpoint. Traditional iPaaS users need to make significant investments in such platforms, which tend to also have complex, code-heavy front ends. As a result, traditional iPaaS users must also employ valuable engineering resources (or invest further in hours of support from external consultants) to even make use of such solutions.
More recently, smart companies have been turning to a new breed of integration solution that offers an accessible, low-code interface for business users across the organization, not just for engineers. Low-code integration solutions dramatically lower the barrier to entry to API integrations across the tech stack. Some offer a drag-and-drop front end that lets LOB users and IT experts alike not only stand up integrations in moments, but also set up low-code automation workflows that flow data across the tech stack at whichever time and in whichever way users specify.
Better still, as the low-code integrations revolution has begun to help organizations integrate their own tech stacks faster, a new class of technology has arrived to support software vendors who are fielding multiple integration requests from end customers and prospects. Embedded iPaaS solutions offer software vendors the ability to “embed” the integration-building functionality of iPaaS within their own software products to deliver customer integrations faster. Let’s explore the differences between iPaaS and embedded iPaaS.
iPaaS vs. embedded iPaaS
As mentioned, some businesses look to iPaaS solutions to integrate their own apps across their tech stack to handle internal operations. Embedded iPaaS is a totally new class of technology that software vendors are using to deliver end customer integrations (between their software products and the tools their end customers use) significantly faster.
The ever-expanding number of apps companies use means software customers expect integrations. Image courtesy Gartner
By “embedding” the connectivity of iPaaS into their own products, software vendors are able to deliver end customer integration requests much faster. Vendors also use embedded iPaaS to give themselves an edge in sales cycles by offering integrations their competitors don’t.
Better still, in the age of low-code integration and automation platforms, the best embedded integration platforms also offer a low-code front end. As a result, rather than having to code up new integrations by hand, product and engineering teams can use the visual builder interface of low-code platforms to stand up customer integrations much faster...and with significantly fewer engineering resources up front, as well as significantly less follow-up maintenance over time.
Who needs an embedded integration platform?
Embedded integration platforms are for any businesses looking to rapidly deliver integrations to their end customers and prospects. Typically, embedded integration users fall into two categories:
Independent software vendors (ISV) – Bogged down with integration requests from customers, software vendors often struggle to balance engineering resources between customer requests and core product enhancements. Vendors can use an embedded integration platform to empower LOB teams to easily create and deploy integrations for their customers, so IT can focus on their core product. Embedded integrations tend to be of particular interest to product management teams (who own the product roadmap and help direct the flow of engineering resources) and IT teams (who must carefully manage their limited resources against both product enhancements and customer integration requests).
System integrators (SIs) – System integrators are usually third-party firms that help organizations create integrations and automations between systems. With an embedded integration platform, system integrators can quickly deliver client integration needs. Better still, SIs often find that over time, as they implement integrations for a common set of apps, they can develop robust, reusable integration templates they can productize to deliver faster, more-efficient integrations to future clientele.
How do embedded integrations work?
As mentioned, embedded integration platforms enable users to deliver the integration capabilities of an iPaaS to their end customers from within their own product. Embedded integration platform users typically deliver customer integrations on an as-needed basis internally through your team, or by way of an application marketplace.
An example of how an embedded integration platform can look inside your product.
Here’s how it works: Instead of hand-coding integrations, your team uses the embedded integration platform to spin up the integrations your customers request. As mentioned, the best embedded integration platforms offer a low-code visual builder that lets your team pull, push, route, format, and transform data between any applications simply by dragging and dropping, without writing code. The best embedded integration platforms also offer the ability to automate custom data flows across your company’s software product and any other apps your end customers use. You can actually set up the authentication processes across different apps as a simple automated workflow that syncs the credentials for your company’s product as well as the credentials for your end customers’ apps. Once your platform confirms the correct credentials for all apps, it can then flow data across them.
Depending on your implementation, the only thing your end customers need to see is a brief confirmation prompt. The best embedded integrations platforms offer the ability to completely white-label integration functionality such that the process never takes end customers out of your app’s core experience with any kind of extruding third-party user experience. Such platforms also streamline the process with configuration wizards that let end customers walk through integrations with a few clicks.
Four benefits of an embedded integration platform
Scale customer integrations while conserving developer resources
Your prospects and end customers’ application stacks are becoming increasingly fragmented. The average department uses more than 40 different applications – and that number is growing at 10% per year. As a software or services vendor, you should expect the number of integration requests you receive to grow at a commensurate rate. Pulling engineers off of core product initiatives to build and maintain custom integrations for each and every customer request is not scalable.
Embedded integration platforms cut out the painstaking integration builds and endless maintenance so your team can focus on core platform features and differentiators. Eventbrite, a global self-service ticketing and experience technology platform, struggled to deliver and maintain integrations to their customers without increasing headcount. Before choosing an embedded integration platform, the company had an integration team of four to six engineers. After choosing an embedded integrations platform, Eventbrite cut its integrations team down to one while reassigning the remaining engineers to other business-critical projects. Read the full story.
The average IT project backlog is three to 12 months long. Image courtesy The Economist
Improve customer retention and prevent churn
The more integrations you provide to the various tools your end customers use every day, the more your product becomes a foundational part of their tech stack they can’t possibly rip out.
Learn how software leader Typeform observed 14% higher retention with at least two integrations deployed, and 36% higher retention with five or more.
Dramatically accelerate your customer integrations roadmap
The average IT backlog is anywhere between three to 12 months. Your customers and prospects demand specific integrations and are becoming increasingly impatient. Meanwhile, your organization may be losing opportunities–and may lose existing customers–to competitors who can deliver integrations faster.
An embedded integration platform can dramatically accelerate your customer integration roadmap. As mentioned, modern embedded integration platforms offer a low-code, visual builder that lets your teams rapidly stand up integrations between your software product and your end customers’ tech stack. Cybersecurity leader HackerOne knew integrations would be necessary for customers to quickly respond to security threats. Rather than code customer integrations by hand, the company used an embedded integration platform to deliver integrations 4x faster.
Unlock new business opportunities
Businesses that have the ability to deliver integrations quickly can unlock new business opportunities. For example, it’s possible to consider directly monetizing integrations, or to position your products for upsell or cross-sell, particularly for vendors with multiple complementary products.
According to e-commerce leader LeafLink, “by offering more integrations from the LeafLink platform to our customers’ other tools, LeafLink becomes a bigger part of what customers do every day. As a result, [the company is] better positioned to sell...additional products to meet any other needs they may have.” Learn how LeafLink positions itself for cross-sells with embedded integration platform.
See what an embedded integration platform can do for you
An embedded integration platform can be an enormous difference-maker that improves your company’s retention and positions your product portfolio to drive even more revenue while delivering customer integrations faster and at scale (requiring fewer engineering resources). Learn more information on embedded integrations now