Integration Platform as a Service (iPaaS) Market Size, Share & Industry Analysis, By Deployment (On-premise and Cloud), By Service Type (API Integration, Data Integration & Migration, Application Integration, Cloud Integration, and Others), By Enterprise Type (SMEs and Large Enterprises), By Industry (IT & Telecom, BFSI, Retail, Healthcare, Government, Manufacturing, and Others), and Regional Forecast, 2024-2032

The global integration platform as a service (iPaaS) market size was valued at USD 10.70 billion in 2023. The market is projected to grow from USD 12.87 billion in 2024 to USD 78.28 billion by 2032, exhibiting a CAGR of 25.3% during the forecast period.

The Integration Platform as a Service (iPaaS) is a cloud service that allows platforms and applications to communicate and exchange data. The adoption of iPaaS has increased in recent years, and according to an industry expert, iPaaS technology is one of the fastest-growing enterprise software market segments. According to the State of SaaS Integration Report, around 63% of companies invest in integrations to improve customer retention. Around 80% of businesses build integration in-house, 29% use embedded iPaaS, 24% use unified API, and 21% use an outsourced development partner. Due to the growing complexity of modern IT landscapes, the need for seamless connectivity between disparate applications and systems is increasing.

The COVID-19 pandemic impacted virtually every aspect, including cloud. The public cloud providers, including Google, Amazon, and Microsoft, witnessed unprecedented demand during this period. As companies shifted to remote working policies, the demand for cloud computing, data storage, and other cloud services surged. Moreover, it allowed a shift to cloud-based platforms and other cloud solutions, as many service providers offered trials and price breaks in the early stages of the pandemic.

IMPACT OF GENERATIVE AI 

Increasing Adoption of Generative AI to Remove the Need for Connectors is Expected to Propel Market Growth

Generative AI can transform the world and take on a more transformative role for enterprises when applied to platforms and products used everyday. According to Salesforce State IT Report, around 86% of IT leaders stated that generative AI is soon anticipated to play a prominent role in organizations. As generative AI can process natural language inputs and responses, it transforms integration platforms to simplify complexities. As modern iPaaS has user-friendly interface, generative AI enables transferring information from one platform to another without understanding the technical details. Furthermore, generative AI removes the need for connectors to be built and managed by an integration platform as a service vendor or the community of users.

Generative AI constantly monitors data mapping errors, understands the problem, and proactively plugs the leaks, leading to no data downtime and actionable insights. Enterprises face challenges for ongoing maintenance of their integrations, especially when there is an employee turnover, as only 2-3% of integrations are documented and generative AI helps to document or describe existing pipelines automatically and speeds up onboarding of new employees and simplifies ongoing maintenance.

Integration Platform as a Service Market Trends

Ongoing Trend of Low-Code and No-Code Integration to Aid Market Growth

The adoption of low-code and no-code development platforms is increasing, making it easier for non-technical users to create and manage integrations. integration platform as a service vendors offer more user-friendly interfaces and tools to facilitate this trend. Low-code/no-code integration simplifies the complex task of integrating disparate systems and applications. With minimum code or no coding, users can design, deploy, and build integrations rapidly. Low-code/no-code development platform helps automate API generation as it is a critical component of app development and data pipelines. As per Integrate.io’s study, around 25% of respondents spent around USD 18,000 to build an API. However, 75% of respondents said that they will invest more in no-code or low-code platform that automates API generation for IT teams and will improve the development process.

The low-code/no-code platform boasts runtime forecasting, predictive scaling, and proactive alerts. Low-code/no-code integration tools offer visual interfaces and pre-built connectors, making connecting and managing APIs and data sources easier. This simplicity allows enterprises to effectively address integration challenges, including legacy systems, connecting cloud applications, and Internet of Things (IoT) devices. Furthermore, templates are included in low-code/no-code platforms so that users with limited technical expertise can create reliable and robust integrations. Additionally, low-code/no-code integration improves flexibility. By adapting to changing market conditions, businesses integrate new tools and services and modify workflows without extensive development cycles. These aid low-code/no-code, a valuable addition to integration platform as a service, allowing enterprises to respond swiftly to new opportunities or challenges, streamline their operations, improve productivity, and stay competitive in the digital age.

Thus, adopting a low-code/no-code platform for integration is driving the integration platform as a service market growth.

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Integration Platform as a Service (iPaaS) Market Growth Factors

Surge in Digital Transformation and SaaS Applications Among Enterprises to Drive Market Growth

The integration platform as a service is gaining popularity owing to growing digital transformation among enterprises. According to industry experts, in 2023, enterprises spend around USD 2.3 trillion on transformation projects. The accelerating pace of digital transformation initiatives has increased the demand for rapid and proficient integration. integration platform as a service solution allows organizations to reduce time-to-market for new applications and services, streamlines integrations and eventually improves flexibility and competition. As businesses prioritize digital transformation and cloud adoption continues, the demand for iPaaS is estimated to grow in the coming years.

The proliferation of SaaS applications and services being used by enterprises is also increasing. According to a study by Workato, the average enterprise uses nearly 300 SaaS apps. However, the adoption rate of apps is rising among enterprises for various functions, and they face the challenge of integrating these systems to ensure data flows seamlessly. Hence, the number of integrations needed is much higher. iPaaS is becoming a crucial enabler of modern IT ecosystems, enabling organizations to optimize operations, improve customer experiences, and drive innovation.

RESTRAINING FACTORS

Traditional Machines with Interoperability Issues to Hinder Market Growth

The integration platform as a service platform integrates with data, application, and process integration projects, including cloud-based applications, on-premise systems, and APIs. These integrations increase issues with existing traditional machines that are highly interoperable. The traditional applications that manage essential data, including employee and customer details, are not interoperable with the latest integration system. To integrate with the cloud the enterprises need to replace the existing system with the new updated system to integrate with iPaaS. This interoperability issue makes it difficult for enterprises to adopt iPaaS, restricting market growth.

Integration Platform as a Service Market Segmentation Analysis

By Deployment Analysis

Increasing Adoption Of Cloud Based Solution To Aid Its Segment Growth

By deployment, the market is segmented into on-premise and cloud.

The cloud segment dominated the market and is expected to register the highest CAGR during the forecast period. Cloud-based integration relies on external cloud service providers to host, manage, and maintain the integration process. These integrations offer several benefits, including cost-effectiveness, scalability, and less reliance on in-house infrastructure. The cloud-based system allows quicker deployment and can be scaled to meet changing demands.

The on-premise segment is expected to grow steadily as on-premise solutions require more investments in terms of infrastructure and maintenance. Also, installation, maintenance, and configuration require more time and effort.

By Service Type Analysis

Demand for Data Integration & Migration to Enhance Productivity among Enterprises is driving the Segment Growth

By service type, the market is divided into API integration, data integration & migration, application integration, cloud integration, and others.

The data integration & migration is estimated to witness the highest CAGR during the forecast period as data integration provides a unified customer view for providing highly tailored, personalized recommendations and offers to the users. Data integration helps enhance productivity and collaboration and ensures businesses do not have to work with multiple sources.  According to Estuary, 80% of business leaders said data integration is critical to their success.

API integration dominated the market in 2023 as API integration is user-friendly and scalable to connect business apps, automate workflows, increase operational efficiency, and enhance productivity. According to an industry expert, more than 83% of enterprises use APIs to increase ROI on their digital assets.

By Enterprise Type Analysis

Increasing Adoption of iPaaS Among SMEs to Enhance Process Fuel Segment Growth

By enterprise type, the market is divided into SMEs and large enterprises.

SMEs are estimated to witness the highest CAGR during the forecast period as they find themselves juggling between various sources and are adopting iPaaS to enhance the process of developing, deploying and managing enterprise applications as it has become a priority. As SMEs have budget constraints, they are adopting integration to streamline processes.

Large enterprises dominated the market in 2023 as the integration platform assists them in staying updated on the status of their B2B transactions and helps teams work more proactively to maximize the company’s needs and possibilities.

By Industry Analysis

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Healthcare’s Adoption of Integration Platform as a Service to Enhance Process Supports Segment Growth

By industry, the market is segmented into IT & Telecom, BFSI, retail, healthcare, government, manufacturing and others.

Healthcare is expected to showcase the highest CAGR during the forecast period as iPaaS reduces the implementation time and ensures the current compliance of every data touchpoint. Using iPaaS, robust security measures protect the electronic data interchange process at every stage.

The BFSI dominated the market in 2023 and held the largest integration platform as a service market share to adapt to customer demands as customer needs are constantly changing and the organizations in the BFSI industry are introducing new products and services. Integrating fintech applications into core systems using iPaaS allows this organization to keep pace with customer demand.

REGIONAL INSIGHTS

The market is studied across the regions, including North America, South America, Europe, the Middle East & Africa, and Asia Pacific. These regions are further classified into leading countries.

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North America generated maximum revenue in 2023 owing to the region's huge presence of key market players. Adopting technologies, including IoT, AI, big data, and others, is driving regional market growth. Businesses depend highly on cloud computing, and the market is witnessing growth. According to industry experts, 94% of businesses in the U.S. use at least one cloud deployment. Also, the major reason contributing to market growth in the region is the increasing number of data centers in the U.S. The U.S. accounts for around 30% of total data centers globally. The pandemic has surged the demand for data storage and processing power as enterprises strive to remain agile and responsive during the pandemic, and simultaneously, the pandemic has led to a scarcity of storage capacity in some data centers. As a result, data centers are turning to cloud providers for data storage and processing needs.

Asia Pacific is expected to grow with the highest CAGR during the forecast period as the region is experiencing huge growth in data volume across enterprises due to the increasing adoption of IoT devices and digital transformation across industries. The need for strong and scalable data centers has surged with the growing dependency on artificial intelligence, Internet of Things (IoT) devices, cloud services, and big data analytics. Asia Pacific has become the center of this data revolution, with a remarkable increase in data center developments driving the region toward a digital future. Southeast Asian countries are witnessing a rise in IT consumption due to young demographics, a growing affluent population, and increasing industrialization. These factors are contributing to the growth of the region's market.

Europe is witnessing substantial growth due to the European Union's heavy investment and taking quick steps toward digitalization. According to the Digital Economy & Society Index report, Europe wants to increase the number of ICT professionals from 8.9 million in 2021 to 20 million by 2030. Also, the report stated that by 2030, around 75% of businesses will adopt big data, AI technology, and cloud, and around 80% of individuals will have at least basic digital abilities. Thereby, growing digitalization will create demand for the region's integration platform as a service.

South America and the Middle East & Africa are experiencing significant growth as the governments in Brazil, Argentina, GCC, and South Africa are undergoing a technological transformation that will lead to diversification and aim to build digital infrastructure, which will drive the market growth in the region.

List of Key Companies in Integration Platform as a Service Market

Major Players are Adopting Advance Technologies to Strengthen Their Market Positions

Key players operating in the integration platform as a service market are upgrading their existing solutions to keep up with the changing user requirements. With the advanced technologies, including AI and ML, companies are upgrading their product portfolio. With this, companies aim to transform their services and better serve their customers. Furthermore, these market players proactively pursue partnerships, collaboration, mergers, and acquisitions to boost their product offerings.

List of Key Companies Profiled:

• Dell Boomi (U.S.)


• Workato (U.S.)


• Informatica (U.S.)


• Oracle (U.S.)


• Snaplogic (Switzerland)


• Mulesoft (U.S.)


• IBM (U.S.)


• Celigo (U.K.)


• Zapier (U.S.)


• Flowgear (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• December 2023: IBM acquired webMethods and StreamSets, two integration platforms from Software AG as a service enterprise technology platform. The acquisition aims to add StreamSets data ingestion abilities to Watsonx. API management tools of webMethods are integrated into IBM's hybrid multi-cloud environment.


• August 2023: SnapLogic launched the generative AI tool SnapGPT for data integration to automate business processes.


• November 2022: Qlik unveiled Qlik Cloud Data Integration for fueling data strategies through real-time data integration fabric for connecting applications and data sources of enterprise to cloud.


• October 2022: Virtuoso Partners partnered with Workato to extend its capabilities into iPaaS. The partnership supports the customers and partners in integrating their on-premise and cloud applications and automating workflow across them.


• May 2021: Jitterbit acquired eBridge Connections to provide customers with integration around e-commerce integration and EDI integration for accelerating digital transformation.

REPORT COVERAGE

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The integration platform as a service market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights the competitive landscape. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.

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