In the Dark Ages, when software came in a box and was sold at big stores, programmers were in direct – and devilish – competition. Some software even deleted competing software or made things run more slowly if competitors were near. These dirty tricks are over, replaced by a calm and increasingly common form of cooperation.
Why are one-time competitors now clamoring to work together on your desktop? It makes financial sense. In a world, where downloading a new app is as easy as clicking a button, developers have to create platforms. These platforms, in turn, ensure that one product remains on the machine while other products – from plugins to entire apps – can run alongside, grabbing revenue for both parties.
For example, massive platforms like Salesforce and IBM’s WebSphere allow multiple apps to run inside a single platform, adding more and sometimes better functionality to already powerful platforms.
“Integrations have gotten easier to do technically, so you can produce more of them,” said Aaron Rubin, CEO of ShipHero. “If there’s a subset of customers that will use your product if you have an integration, the additional revenue will often dwarf the costs to develop the integrations.”
For example, ShipHero integrates with a competitor, Webshipr, another shipping service.
“Someone from the outside might wonder why, but Webshipr integrates with carriers we don’t and ShipHero supports advanced workflows that Webshipr doesn’t,” said Rubin. “So we integrated and a few percent of our customers are shared, which makes the integration a revenue generator for both companies.”
Procore is also getting into the integration game with its Marketplace. It’s most recent integration with the Viewpoint Vista Connector, connects a powerful financial tool into Procore’s construction tools. This connector sends real-time data right to the field, allowing folks on the ground to understand the financials on the fly.
“As construction managers and project teams we deal with two major things: time and money. It’s the lifeblood of any project,” said Sean Woerman, a Senior Account Manager at Lydig Construction. “Having this connectivity with your accounting software, and being able to use the portal of Procore to see and manipulate that financial data, and understand it in real time is vital to any construction project, big or small.”
The best thing about integration is that it adds powerful tools to a project without adding programming or development overhead, said Szymon Klimczak, CMO at LiveChat.
“The technology business is so demanding and prone to change that our development strategy must be just as demanding,” he said. “Every day we face very specific customer needs. Some require a product, which can be integrated with all internal systems and others need something completely tailor made that can do it all. In the previous years we’ve become completely aware that it’s impossible to make a product for everyone. We’ve quickly found a solution in the Marketplace and various integrations with other software, which together create a more valuable product. The concept of Marketplace innovation enables us to develop the product without creating more stuff.”
Lifting All Boats
Before the rise of integration most software came in suites dedicated to enterprise resource planning or customer service. The problem, obviously, was that these massive pieces of software were often too big and bulky for small businesses and often required months of tweaking to work within a larger organization.
That software companies can become specialized is a boon for all, said Rob Bruce, VP of Strategy at Kimble Applications. In his experience the old monolith model was popular back when the central IT function was basically to make buying decisions and when three-martini vendor lunches were the norm.
“Now a lot of the buying power is going into the operational business units and they are uncompromising in wanting the best software for their unit,” said Bruce. “Therefore, as ISVs become more popular, departments within organizations have more flexibility to use the products that best fit their team needs versus their overall business needs, whether that’s sales, HR, recruiting or accounting.”
Integration isn’t just happening to the giants, either. Smaller pieces of software are seeing more and better integrations including content management systems and smaller CRM products.
Tools like SlashDB can turn data sources into easily integratable resources and even popular open source software like Git now has an integration marketplace. You can even buy and deploy entire systems within tools like Amazon Web Services, which, in turn, have their own integration marketplaces.
To paraphrase the old joke, it’s integrations all the way down.
What does this mean for software houses and single developers? First, thanks to the cloud, software purveyors have an easier time selling their work. Instead of depending on one-off downloads, they compete in a massive marketplace where the best and coolest software wins. Further, it offers a very stable and repeatable revenue source for folks who don’t have big sales forces.
“As vendors, when we think about integration, we need to realize and continue to understand that it’s in the interest of customers that we work together as competitors to make our offerings robust,” said Bruce.
“While many organizations may strive to eliminate the number of vendors they work with from the standpoint of managing the relationships, vendors just need to have a clear lead and communication to make a relationship work. The question to also think about is how integration may affect consolidation in the industry as we see the bigger players like Oracle and SAP building their suite of products based on acquisitions, how do other smaller suite providers compete?”
Through integrations, said Bruce. And so far things have been working just fine.
If you liked this article, here are a few eBooks you may enjoy: