Throughout my blog series we have discussed the principles of creating an integration platform. Thus far we have worked on the basic technical principles, but now it is time to talk about something else – the commercial aspect.
So, you have created a great integration platform, capable of serving your customer’s business needs. You have selected the best possible hosting platform for your platform, and you have adjusted your mindset to be able to increase and extend functionalities as your customers raise new requirements for your software.
At this point you must have asked yourself questions like “Why am I doing this?” or even more importantly, “Why should my customer be interested in my platform?”
After all, there are masses of other companies who have already done the same. If you look, for instance, at Gartner’s Magic Quadrant for Enterprise Integration Platform as a Service, you can find a detailed analysis for 17 vendors, with 26 more listed under “Additional iPaaS vendors”. This includes only those vendors that are providing cloud-based platforms and that Gartner is actively following.
The question is – how can you stand out from this crowd? With all these vendors providing more or less similar integration capabilities, you are essentially becoming something like a Volkswagen Group car manufacturer. With somewhat similar capabilities around all the cars in the group, the potential end customer has to decide whether he wants to drive “Das Auto”, if he wants to keep things “Simply Clever”, whether he is keen on “Auto Emoción”, or if he wants to pay some extra for four circles in the front grille. After all, all these cars are built pretty much from the same components – so how do you choose?
As a vendor, what choices do you have for differentiation? Of course, the easy choice would be to go with making some technical capability better than what your competitors have. But is this a long-term solution? In a world where integration solutions and platforms have been built for decades, how can you develop some specific technical feature so well that it is clearly better than the others? And more importantly – how can you keep ahead with the competition in the future as well?
In the beginning of 2016, I had a good discussion with Massimo Pezzini, Vice President and a Fellow in Gartner Research. Massimo has been following integration industry for about twenty years, and in his position at Gartner, he has seen how the integration industry evolves. In our discussion he noted that “there are integration platforms springing up everywhere.” There are local vendors focusing on local markets, and global ones trying to find their own niche. “However, too many times these vendors are thinking that a single technical capability – like a little bit better orchestration or message transformation tools – are enough to keep ahead of the competition”, he added. “Others will anyways do the same thing a little better in a short while”.
If the technical capabilities are not the way to differentiate, what then? Well, there are some possibilities.
First of all, you can divide integrations into two broad categories based on what, and where, you integrate. There are internal integrations (often referred to Enterprise Application Integration, EAI) that focus on automating the information exchange between your internal applications, and then there is B2B integration space, where you are transferring information between companies. Even though you can create a platform that is well capable of both, the way you (or your customer, or a partner) build solutions on top of your platform, differs.
In the internal application integration space, you are more likely to work with your customers’ IT organizations and providing direct services to these clients. You may find yourself as an extension of your customers’ IT, preferably an extension of their Integration Competency Centers (ICC’s). You will need to adjust your operations to be able to serve your customers in lengthy development projects or programs. If you do it well, you will be a crucial part of your customers’ internal operations and will secure long contracts with them.
However, this model is not necessarily easily scalable. If you want to grow from local to global business, you will either need to invest in local resources in multiple locations, or then try to expand your reach through business partners who will provide the services for local customers. If you manage to do this, you are essentially becoming a systems integrator and have to adapt this business model; you have to be very careful to have the right balance between your software and services business and their priorities.
Then again, if you head for B2B integration space, you are faced with similar challenges, but this time you need to be able to deal with multiple organizations, possibly in multiple regions, and adapt to their way of working. The project management may become a bit more complicated, and you will find yourself not only interpreting different technical protocols and messages, but also acting as a translator between different business cultures. The B2B integration space has for long been controlled by value-added network (VAN) operators and EDI operators. However, especially as companies are starting to utilize cloud-based internal applications and generally go for “best-of-breed” solutions, there is a lot of traction in this space to modernize the existing information exchange solutions. The modern iPaaS solutions are slowly complementing, and replacing, old solutions, but there is still a lot of room for improvements.
Of course, you can also focus on some specific technical integration scenarios and patterns. (To be clear here – not technical features within your platform, but specific, technically oriented scenarios that your customer wants to resolve). Examples include vendors who are focusing on things like CRM integrations, integrations to specific business applications (for example to SaaS solutions like SalesForce), or for example ITSM ticketing integrations. This approach will make it possible to create well pre-packaged integration solutions that are simple and efficient to deploy, which easies the burden of managing your professional services department. However, this may lead into design decisions where you will be creating functionalities that serve well these specific needs, but do not necessarily work in other scenarios. If you select your technical niche well, this may not necessarily be a problem – just make sure that the segment is large enough.
And then there is the way of creating horizontal, generic integration platform but focusing on some specific industry segments – the approach we have adopted at Youredi. You can build your integration platform in a way that it does not contain much industry specific functionalities but adapts well into a variety of scenarios varying from EAI to B2B, from cloud integrations to on-premise adapters, and to different industries. However, in this scenario you have to be aware that a customer is very rarely willing to buy a platform that “can do anything”. Thus, you can select the industry, gain experience on how that specific industry works, and fine-tune your organization from marketing and sales into professional services and support operations to serve the specific needs of that industry. By selecting a suitable industry (our own key focus is on supply chain and logistics) you can build up industry knowledge and serve your customers as well as possible.
Whatever your model of differentiation will be, it is a necessity. In a world with a huge freedom of choice for end customers, you have to stand out some way. Whether it is through your services, your local presence near the customer, your technical niche, or your industry focus, you have to have it.
The platform you have created deserves to be used. And you can’t just wait your customer to find it. As with those VW group cars, you have to create a brand that stands out from the similar solutions – and the color cannot be the only differentiation anymore.
