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iPaaS vs hybrid integrations: Key differences

Written by
Saad Merchant
Published on
June 22, 2023

To keep up with the rapidly evolving technological landscape, businesses are seeking new ways to connect their systems with the latest cloud apps. Two popular system integration approaches to build these connections are the iPaaS (integration Platform as a Service) and hybrid integration solutions. While iPaaS solutions help integrate multiple systems, apps, and data sources on the cloud, hybrid integration involves integrating the same across on-premises and cloud environments. However, there are advanced iPaaS solutions like Alumio that also enable on-prem integrations with cloud services and apps. So what’s the difference between the two integration approaches? While iPaaS solutions are deployed as fully managed services in the cloud, hybrid integration solutions may be deployed through both cloud-based and on-premises middleware, or even through custom integration systems.

iPaaS vs. hybrid integrations: key differences

Ever since the emergence of cloud technology, mobility, IoT, and APIs, businesses have sought to accelerate digital transformation initiatives through system integrations. Connecting business-critical applications (both internally and externally) and enabling seamless real-time data sharing are essential business objectives. The “integration Platform as a Service”(iPaaS) and hybrid integration solutions are two key approaches that came about to connect business systems, applications, and data sources with the latest digital technology.

What is the iPaaS?

An iPaaS is a low-code or no-code cloud-based “integration Platform as a Service”. It’s an API-driven solution that provides a user-friendly, web interface to create, manage, and monitor connections between two or multiple systems, cloud apps, SaaS solutions, and data sources. The iPaaS enables real-time data sharing and synchronization between all connected systems. It offers pre-built connectors and features that help businesses integrate a wide range of systems such as ERPs, e-commerce platforms, PIM, CRM, WMS, POS, Marketplace automation software, and more. Certain iPaaS vendors like Alumio provide advanced mappers and transformers to flexibly modify data and help build workflows to automate business processes.

What are hybrid integration solutions?

Hybrid integration solutions are designed to connect applications, data, and files with cloud services, across both on-premises and cloud-based environments. With hybrid integration architecture, some integrations and data may reside in the cloud, while others may remain within an organization's private infrastructure. In other words, hybrid integration solutions enable businesses to connect existing on-premises infrastructure with scalable cloud-based solutions, bridging the gap between different environments. This enables businesses to integrate their current workflows and data with new cloud solutions effectively.

What are the differences between the iPaaS and hybrid integrations?

As mentioned, hybrid integration is primarily implemented as a solution for businesses to connect their on-premises legacy systems with the newly emerging cloud environments. On the other hand, the iPaaS is designed as a next-gen, cloud-based integration solution that excels at swiftly integrating the latest SaaS (Software as a Service) solutions and cloud apps for digital commerce.

Here’s where the differences emerge: While there are iPaaS solutions that focus only on cloud-to-cloud integrations, advanced iPaaS providers like Alumio also provide hybrid integration features and connectors to integrate both on-premises and cloud-based systems as well. However, while this means that there are iPaaS solutions that are thus essentially also hybrid integration solutions, not all hybrid integration approaches may involve implementing an iPaaS. Businesses may also implement hybrid integrations through on-premises middleware like ESB, Message-Oriented Middleware (MOM), or Integration Brokers.

Read more about the different types of middleware solutions and how they compare with the iPaaS →

Key differences between iPaaS and hybrid integration:

  • Cloud vs. on-prem: The iPaaS enables businesses to build integrations between systems and cloud apps on one secure cloud space, via a user-friendly web interface. While this saves time, money, hosting space, and implementation time, hybrid integrations enable businesses to connect on-premises systems they already use with cloud applications. This means that while iPaaS integrations are completely developed and governed on the cloud, hybrid integrations may be orchestrated from both on-premises and cloud environments.
  • Legacy vs. future technology: Hybrid integration solutions are designed with the objective of simplifying integrations with on-premises systems first. The iPaaS is designed as an API-first solution that can swiftly integrate newer applications. iPaaS solutions are also likely to provide connectors for integrating a wider variety of cloud apps, SaaS solutions, and systems.
  • Commerce vs. cloud-based commerce: As B2B, B2C, and D2C e-commerce continue to grow exponentially, enterprises will need to integrate all operations and processes across the value chain with the latest SaaS and cloud apps. Hybrid integrations focus on bridging the gap between legacy systems and new-age cloud apps, to bolster on-premises systems operations with integrated cloud-based counterparts. As a next-gen solution, the iPaaS favors e-commerce integrations, connecting new cloud solutions for digital growth, and helping businesses migrate to the cloud.
  • Integration interchangeability: Hybrid integrations are great for implementing long-term integration strategies, while the iPaaS provides future-proofing through agility. The iPaaS provides the flexibility to freely experiment with connecting new applications or replacing connected systems, without loss of data integrity. This enables businesses with the agility to build quick POCs, to rapidly adapt new technologies as they emerge, and to swap outdated applications to meet changing business requirements.

Read how the Alumio iPaaS provides the integration architecture required to adopt new development methods such as Composable Commerce, to ensure an even faster Time to Market.

How does the iPaaS help integrate on-premises systems?

As mentioned at the start of this blog, some iPaaS vendors focus on cloud-to-cloud integrations, while other iPaaS solutions like the Alumio iPaaS offer hybrid integration capabilities. The legacy systems that businesses seek to integrate with cloud solutions, mainly entail ERP systems like SAP and Microsoft Dynamics 365.

However, there’s one big challenge when it comes to integrating ERP systems. They usually lack the necessary B2B or B2C web services or API points, which are required to effectively connect with e-commerce platforms, PIM, CRM, WMS, and other systems for digital growth. While businesses have to work with consultants or integration experts to develop these API points in the ERP they wish to integrate, Alumio provides a unique API Plugin. This plugin helps install the necessary API points in the ERP that businesses wish to connect, swiftly enhancing its integration capabilities and software connectivity.

Discover how the Alumio API Plugin speeds up ERP integrations via the Alumio iPaaS, across on-premises systems and cloud environments, for the following popular systems:

iPaaS vs. hybrid Integrations - conclusion

What determines whether a business should invest in a hybrid integration solution or an iPaaS with hybrid integration capabilities may ultimately be determined by business size. Hybrid integration strategies are ideal for older enterprises looking to maintain their on-premises systems while leveraging the benefits of moving to the cloud. Whereas, iPaaS solutions with hybrid integration capabilities offer the best of both worlds: providing a scalable solution for small businesses to start by integrating two or three systems, while enabling large enterprises to orchestrate entire ecosystems of integrated systems, SaaS, and cloud apps.

A simple question that can be asked when choosing either integration strategy is: if the whole world is moving to the cloud, what is the future value for businesses to maintain on-premises systems? Those that favor hybrid integration solutions will favor the novelty of privately securing all their data, apps, and systems on-premises. Those that favor the iPaaS with hybrid integration capabilities will be those that are looking to maximize the benefits of digital transformation efforts with system integrations.

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