The way business applications are evolving, enterprises are learning to accept and embrace the notion of applications that they neither control nor host. Now enterprises are leveraging applications that run a business through the Internet platform. As these applications become core to many businesses, so does the need to incorporate these applications into the enterprise’s existing infrastructure and make them work together. Every on-demand application should function like any other enterprise application, both hosting and sharing critical business information as well as services.

SaaS-based on-demand applications continue to grow at a staggering rate. According to software market analyst Gartner, Software-as-a-Service (SaaS) represented approximately 5 percent of business software revenue in 2005 and, by 2011, 25 percent of new business software will be delivered as SaaS. Large players like Salesforce.com and NetSuite as well as more traditional applications continue to jump on this on-demand bandwagon. The wide variety of SaaS vendors specializing in different areas has resulted in fragmented enterprise information, thus the demand for stitching together information from these different sources is also increasing at a rapid pace.

Since not all these applications are hosted and not all of those that are reside in the same data center, SaaS applications have the annoying habit of creating a significant data integration challenge for IT managers – how to integrate data outside the firewall with the rest of the business applications that are in-house. It’s very evident that this SOA-based integration of applications would add a tremendous amount of value, considering the use of those applications and abstraction into real business solutions. The integration objective here is to bring together all of the SaaS applications, no matter if they are processing customer, inventory, or employee information. In essence, make as many SaaS-delivered applications appear as a single application framework with both service and information visibility existing among the applications, perhaps with common schemas and transactions. Integration is hard enough when all the systems and data reside inside the firewall. Enterprises that use on-demand applications need a new approach to data integration and that’s why there is a high demand for easy-to-use, manageable on-demand integration that will leverage the power of SOA and XML.

There are currently a small number of integration vendors that are trying to extend their integration solution to SaaS applications as "OnDemand Integration." Informatica’s PowerConnect, Boomi’s OnDemand, etc., are providing solutions that cater to the enterprise’s OnDemand Integration need. But SaaS application providers are attempting to provide this missing critical piece. Every SaaS provider is coming up with SOA-based integration frameworks so that customers can easily connect their existing on-premise applications to exchange data with their SaaS solutions, without taking on the overhead of solving this integration task. SalesForce provides three different ways to connect: Force.com Web Services API-based programmatic access, JavaScript-based S-Controls, and rule-based Internet messaging driven real-time integration. NetSuite, another SaaS-based CRM solution provider, recently announced SuiteTalk Integration - Simple Object Access Protocol (SOAP), standards-based Web service API for the same purpose. Workday, another new on-demand ERP solution provider, recently acquired CapeClear, an established ESB provider, to provide access to its application.

It’s too early now to tell at what pace the on-demand trend will spread, but for SaaS application providers and their SME subscribers these solutions solve a real problem. SaaS applications don’t live in a vacuum; they need to be connected with existing applications – Software as Itself. That’s why SaaS requires “Integration-as- Service,” but unlike SaaS, Integration-as-Service needs to deal with the legacy application data inside the company.