As businesses around the world grapple with the impact of COVID-19, a good chunk of tech companies, and in particular Integration Platform as a Service (iPaaS) vendors, are turning to software market consolidation for the sake of their survival.
This is partly because software market consolidation has the power to help organizations respond quickly to evolving market dynamics, trends and environment thus giving such players a chance to stay afloat even when times are hard.
The coronavirus pandemic is one such crisis that has driven most businesses to either merge or even close shop altogether.
The iPaaS market is no different.
With iPaaS, it is notable that over the past few years the consolidation of the market has been going up. Gartner predicted in 2019 that two-thirds of players in the iPaaS software market will have merged by 2023.
The reason? The business was not all that profitable.
Enter the pandemic and you can imagine how bad the situation turned out to be. It’s then a no-brainer that most vendors might as well consider consolidation (in terms of mergers or buyouts) as the only logical way out.
And despite the profitability challenges being faced by many vendors, iPaaS continues to grow in popularity.
The primary reason why this is happening is simply that, although it’s not a new innovation, iPaaS continues to provide many organizations with less expensive, more scalable and decentralized solutions for integration of systems.
Consolidation is being entertained in the software delivery industry not just due to the need for fast, secure, and authentic software solutions but as another way of diversifying or solidifying revenue streams.
COVID-19 has demonstrated the importance of digital preparedness to allow businesses to survive. The need to build and support a digitized world is inevitable for any business to remain competitive in these uncertain times.
The consolidation of the market will provide enterprises with streamlined toolchains that will support delivery at scale and keep software in line with business strategies amidst this pandemic.
iPaaS brings all the solutions that share data and goals under the same umbrella. These solutions can be for marketing, sales, accounting, property management, or literally any other business process you can think of.
Growing at a compound annual growth rate of over 40 percent and valued at USD 1.38 billion in 2020, the iPaaS market has continued to deliver solid results. Even more so to those small companies that were agile enough to pivot quickly and adapt to all-new demands form the market and from their customers.
Since online audiences are at bay amid the stay at home orders due to COVID-19, the digital ad market has been hit hard with advertising spend down nine percent on average across Europe, with Germany and France falling by seven percent and 12 percent respectively.
This has somewhat affected the iPaaS market as most companies have scaled down their expenditure even on technology solutions that are designed to help them remain competitive in their respective industries.
Interestingly, though, iPaaS delivers just what you need. Whether there is a crisis or not. Here is why and how.
- Transparency – communication is improved and becomes more efficient when everyone in your organization has access to the same data
- Customer experience – when all the departments in your organization work with a similar toolset, there is a similar experience across departments. This means that if one of your customers has to speak to sales, marketing, or accounting reps they all get a similar picture across the customers
- Marketing insights – involves making marketing decisions on facts. When the tools are all together in a single dashboard, you get valuable insights
- Switching dashboards – you save time and forget about toggling
- Data quality – it allows you to create and apply data rules for data quality services
The iPaaS market is not the only one experiencing turbulence, which has resulted in billion-dollar buyouts and mergers.
News that IBM will be acquiring WDG Automation, a Brazilian-based robotic process automation software provider doesn’t quite come as a surprise.
The primary objective of the acquisition is for the two tech companies to join forces in a bid to scale their capabilities to a wider audience. Which makes perfect sense.
However, organizations that are currently shopping for iPaaS solutions should be very wary of these shifts as they could adversely affect their businesses in the long term.
Unforeseen issues such as discontinuation of certain vital integration services or even sudden price increases could negatively jolt customer experience or cause reliability issues down the road.
It remains to be seen if notable iPaaS giants will continue as stand-alone vendors should the current market dynamics continue to be felt.
Many investors are recommending a cautious approach amid the current pandemic situation. With continuous movement in the industry becoming imminent, there is an urgent need to compare products against your integration needs so as to help you select the best vendor.
Ensuring huge returns is proving to be an uphill task during this pandemic period. Thus, enterprises and vendors are stalling in their transformation.
In terms of survival, vendors that have adopted a targeted approach are in a much better position to weather the storm. Companies will now be looking for vendors that are not just omnipresent but also offer favorable price points.
Independent vendors like SyncApps by Cazoomi that has been ranked by Crunchbase as a leading integration platform, is pegging its competitive advantage on pricing. Unlike vendors that have been bought by other tech giants resulting in huge price points, SyncApps continues to offer lower prices for integration solutions, especially for SMEs.
How Tech Companies are Realigning Amidst the Pandemic
Companies are slowly positioning themselves strategically with capabilities to offer enterprise solutions that are cost-effective.
It, therefore, becomes vital to delivering real business value by connecting the software delivery life cycle and availing visibility into the process.
This gives business teams the confidence that they are working on the right initiative and this will enable them project value real metrics and prioritizing the sheer volume of work.
For successful software delivery, training and upskilling are vital. A rise in training and expert consulting to help organizations adapt and make the most value stream approach will happen as the pandemic fallout intensifies.
As providers adopt to how organizations build and deploy software, better workflow will arise leading to enhanced customer experience and most importantly, value addition.
As with any market, consolidation in the iPaaS industry demonstrates maturity in the industry. But as vendors use this strategy to position themselves favorably in the market to be able to deliver cutting-edge software products and services that make the real difference, pricing still remains a key purchase driver, especially during a crisis.
Vendors must, therefore, be in tune with the issues their businesses and industries are facing during this pandemic and how this affects the end-user.
iPaaS solutions are a great investment when it comes to the integration of different data formats. It is just what you need to tune in to the ever-changing demands of your customers with vast data that arrives from various channels at a fast pace.
But this doesn’t mean you have to jump at the first iPaaS provider that comes your, irrespective of the price tag. Quite the opposite: it is now more than ever a time to be mindful of your finances. Choose an iPaaS provider that offers great services without ripping your IT budget.
At SyncApps by Cazoomi, we’ve made it our mission to offer affordable iPaaS solutions to every company out there, even the tiniest of startups. We were once that startup, so we know how important such help can be.
As an independent provider, we can afford to offer the lowest prices in the industry. Even free iPaaS solutions with no commitment required.