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iPaaS vs ESB | On-premises vs cloud-based middleware

Written by
Saad Merchant
Published on
April 4, 2023

In short, an Enterprise Service Bus or ESB platform and the iPaaS (integration Platform as a Service) are essentially middleware solutions that help businesses integrate multiple systems, apps, and data sources. However, ESB solutions are typically old-school, on-premises systems and the iPaaS is a next-gen, cloud-based application integration platform. This is a key differentiator because, as middleware solutions, both the iPaaS and ESB are designed to serve different types of system integration needs.

System integrations started off as a great way for businesses to improve business efficiency and streamline operations, by connecting applications, software, and data. With the current rapidly evolving need for digital transformation across industries, system integrations help digitalize business processes by integrating cloud apps and SaaS solutions.

Since before the advent of cloud technology, ESB solutions have helped businesses simplify and standardize how they integrate legacy systems with various applications. The iPaaS is designed to help rapidly deploy integrations with SaaS solutions and cloud services to digitalize businesses processes. This is where the differences between the two middleware solutions, ESB and iPaaS, start to emerge.

ESB platform vs iPaaS - A brief understanding

Cloud-based integration vs on-premise integration platform

What is an ESB?

The Enterprise Service Bus or ESB solutions are an integration architecture framework that helps businesses connect and share data between multiple business systems. As an on-premises middleware solution, an ESB platform requires the installation of hardware. It functions as a centralized communication hub for an enterprise, which facilitates messaging and communication between different endpoints, including applications, services, databases, and devices.

What is iPaaS?

The iPaaS (integration Platform as a Service) solution can be a no-code or low-code, cloud-based platform that helps seamlessly integrate multiple systems, software, cloud apps, or data sources. In other words, it provides a user-friendly, web interface to create, monitor, and manage integrations, with automated integration tools and without any custom code. Centralizing and standardizing data from all connected systems on a dedicated cloud space, the iPaaS helps automate workflows and transform data being exchanged between various systems, including legacy systems and the latest cloud apps.

What are the key differences between the iPaaS and ESB solutions?

API-driven integrations vs messaging architecture

While both are middleware solutions for system integration, there are key differentiators that place the iPaaS and ESB at different ends of the spectrum:

1. API-first integrations vs messaging architecture

The adaptability of the iPaaS stems from the ease with which data may be shared between systems in near real-time via APIs. Being an API-led integration solution, the iPaaS enables businesses to swiftly add or replace software integrations in an agile fashion. Since APIs can be easily updated, versioned, and reused, the iPaaS enables flexible cuztomization of integrations to suit evolving business needs.

An ESB platform implements a messaging architecture that allows systems and applications to talk to each other. Rather than exposing APIs to each other, ESB integration relies on a centralized message broker that acts as a mediator between systems. This messaging architecture is more complex to develop and maintain and lacks standardization. In case of any major changes in applications or integrations, the entire ESB platform may need to be reconfigured.

2. ESB solutions are more complex to implement than the iPaaS

Like the ESB, iPaaS eliminates the hassles of creating point-to-point integrations with custom code. However, unlike ESB, iPaaS does need to be operated by experienced IT personnel. These senior developers need to be carefully educated and trained in how to implement ESB integrations. To add to this, with the ESB messaging architecture it can be quite challenging to understand the flow of data and how messages are routed between systems. Building a “DevOPs” team with such senior developers can be very expensive and time-consuming.

On the other hand, the iPaaS enables the development and governance of integrations via a user-friendly interface, which both developers and business users (like CTOs and project managers) can collaborate on. This also means that businesses can lower hiring costs and manage their integrations with junior developers. And senior developers can be optimally utilized to build complex, custom integrations with the iPaaS, or to develop other business-critical solutions.

3. Platform and security: iPaaS vs ESB solutions

Being an on-premises system, an ESB platform needs to be fully operated, managed, and secured by the business itself. An iPaaS can be directly accessed on a cloud space with regularly updated platform security, features, and fixes. Some iPaaS solutions like Alumio also offer robust, automated monitoring and logging systems, which help instantly detect integration errors and reduce troubleshooting cost.

Within the iPaaS, since all systems are integrated via APIs through the platform, if one connection gets stuck with an integration error or API conflict - the rest of the connected systems aren’t affected and can ensure business continuity. With an ESB system, since every connection is built through the integration system itself, serious issues can bring all other connected systems to a standstill.

4. iPaaS vs ESB solutions: Vertical scalability vs horizontal scalability

When it comes to scalability, ESB solutions scale vertically. This means increasing performance resources such as memory, processing power, and speed to a single instance of an ESB environment, in order to handle increased traffic and processing demands. However, adding these resources may require significant reconfiguration or downtime, and adding resources to a single server or database may not always be sufficient to handle the increased workload.

In contrast, an iPaaS typically offers horizontal scalability. This means you can add additional servers to a single iPaaS instance, in order to handle increased traffic and processing needs. This enables an organization to add more resources to increase the capacity of the iPaaS to handle more data loads and integrations. It also means more fault tolerance, wherein if one server or instance of the platform fails, the other instances can continue handling the traffic.

5. ESB platform connectors vs iPaaS connectors

Both middleware solutions provide a range of connectors or pre-configured connections, which enable faster integrations with applications and software solutions. Like an iPaaS, an ESB platform may also provide different connectors to integrate different standards and protocols, such as SOAP, REST, JMS, JDBC, etc. However, an ESB platform performs more effectively in connecting on-premises and aggregated systems such as SAP. Therefore, ESB solutions are known to typically offer connectors for more traditional ERP (Enterprise Resource Planning) systems, CRM (Customer Relationship Management) systems, and legacy systems.

On the other hand, an iPaaS provides pre-built connectors for a wider range of SaaS solutions and new cloud apps or services. This helps businesses using an iPaaS to create faster integrations with popular e-commerce platforms like BigCommerce and Shopify, ERP systems like SAP and Microsoft Dynamics 365, Salesforce for CRM, POS systems like Lightspeed, and for many other software to digitalize business processes. At the same time, there are also iPaaS solutions that provide hybrid cloud solutions to integrate on-premises systems and cloud applications.

Read more about the role ESB solutions play in e-commerce integrations -> 

What gives the iPaaS an edge over ESB solutions?

Both, iPaaS and ESB can play a critical roles in a company's data management and system integration activities. However, while the key aspect of an ESB platform is that it is designed for integrating legacy systems and data sources, the iPaaS is a cloud-based solution that is capable of integrating legacy systems, cloud apps, and data sources. At the same time, some iPaaS solutions also provides businesses with the ability migrate their legacy systems and data to the cloud.

Unlike the ESB, iPaaS solutions are also a viable alternative for modern businesses that rely heavily on cloud-native apps, real-time data exchange and analytics, streaming data, and so forth. It also provides a scalable platform infrastructure that enables businesses to seamlessly add, integrate, and organize multiple software solutions and data sources to build a remotely controlled integrated IT ecosystem. Furthermore, the integration agility that the iPaaS offers over ESB solutions ensure faster time to market, and as a cloud-based, low-code or no-code solution,the iPaaS also helps enterprises lower operational cost and increase ROI.

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