Cloud data integration tools' risks, rewards similar to other SaaS apps

Cloud-based data integration software offers companies a fast way to get data into the cloud; but it’s not an ideal fit in all situations, experts warn.

Bay & Bay Transportation chose a cloud-based CRM application -- Salesforce.com -- for the reasons you might ex

pect.

“It was so easy for us to get up and running at a very reasonable cost with no real risk on our side,” said Rob Adams, CIO at the Rosemount, Minn.-based dry freight shipping company.

When the time came to decide on data integration software to feed the new SaaS CRM application, Adams chose Informatica’s Cloud Services for pretty much the same reasons.

“The ramp-up and configuration was so easy,” he said. “I didn’t have to write [any code]. Informatica took care of everything.”

Such is the appeal of the small but growing field of cloud-based or hosted data integration software. Like other SaaS applications, cloud-based data integration software is hosted and managed by the vendor, meaning that customers don’t have to invest in any hardware or deploy any software. Customers pay monthly subscription fees rather than making one large, upfront payment.

Most of the SaaS data integration offerings also have preconfigured connectors to popular applications and databases – both on-premise and in the cloud – such as SAP and Oracle ERP suites and Salesforce.com, explained IDC analyst Ken Vollmer. In some cases, customers can have their data moving between apps in a matter of hours.

Ted Friedman, an analyst with Stamford, Conn.-based Gartner, said he is starting to see increased interest in cloud-based data integration offerings from clients that don’t have the expertise, the funds or the desire to run the software in-house. It is also a popular choice for companies starting to explore other SaaS applications, he said.

Cloud-based software also has an upside for traditional data integration vendors, enabling them to court potential customers that had previously priced out of the relatively expensive on-premise data integration market, according to Friedman. This is particularly true at Informatica, he wrote in Gartner’s most recent data integration Magic Quadrant report.

“Vendors see this as a new opportunity,” agreed IDC’s Vollmer.

Other vendors in the cloud-based data integration market include IBM, which earlier this month acquired SaaS data integration specialist Cast Iron Systems, and Pervasive Software, which released version 2 of its cloud-based data integration suite in October.

But the hosted delivery model has its drawbacks, and Friedman doubts it will overtake traditional on-premise data integration software. Namely, one of the main draws of cloud-based data integration software is that it requires little tuning and can be up and running quickly. But data integration needs are so diverse, it is unlikely that cookie-cutter SaaS apps can meet a majority of them, he said.

Nor are large organizations with complex on-premise IT infrastructures likely to consider cloud-based data integration software. The same probably goes for midsized and even smaller organizations that don’t already use other SaaS applications.

Still, there is a market for hosted data integration software at companies such as Bay & Bay that have relatively simple data integration needs between on-premise apps and popular SaaS-based apps like Salesforce.com.

“We don’t even have a development environment here. We’ve got canned packages,” Bay & Bay’s Adams said. “We had to look outside for sort of a quick win that could get us up and going quickly.”

Adams said that -- in addition to Informatica -- he evaluated SaaS data integration offerings from Pervasive and Boomi but was wowed by Informatica’s speed. During the proof-of-concept, Informatica was able to begin integrating some of Bay & Bay’s production data in under two hours, he said.

“This is fantastic for us, thinking we’re going to grow pretty fast,” Adams said. “We don’t have to worry about requisitioning servers and all the infrastructure testing that you need to put in place. That’s just part of the offering from Informatica.”

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