Until recently, enterprise application integration (EAI) was costly and difficult to manage on an ongoing basis. For small and mid-size businesses, this was particularly challenging given limited resources and funds. However, today, there are a number of alternatives. Companies are offering integration appliances, which help eliminate the cost and complexity of traditional software-based integration tools, while others are providing these integration capabilities as a service. 

Small and mid-size businesses are recognizing the importance of these tools and services. For example, if a company supports Salesforce.com for customer relationship management (CRM) applications and wants to integrate with another company’s enterprise resource planning (ERP) system, some type of mechanism is needed to communicate between the two.

Previously, if you wanted to integrate your CRM and ERP applications, you had a couple of choices. Users could buy an application server and write the code to do the integration, or they could use an enterprise service bus (ESB), a software architecture that involves middleware infrastructure. While there are a number of open source solutions that are subscription based, they require integration and development expertise.

Buy an appliance and skip the server

“Small and medium-sized businesses are seeing these integration appliances as a great way to simplify a lot of the requirements,” says Bradley Shimmin, principal analyst, application infrastructure with consulting firm Current Analysis. “The provisioning of hardware is much easier and end users don’t have to buy a server.”

Integration appliances offer a more simplified and cohesive environment. They also are well suited for smaller IT shops because many of the products come with prepackaged items you would previously pay consultants to integrate. Things like connectors and adapters are often included and ready for installation.

Cast Iron Systems, for example, a provider of integration appliances, notes that due to the built-in simplicity of these applications, customers complete integration projects in days and for less than 20 percent of the cost of traditional software-based alternatives.

When choosing a vendor in this area, Shimmin says it’s important to buy from a vendor who has some sort of data management service built into the product and an information type service that has the intelligence to know how to look at the data coming over various streams.

Strong governance is important as well. It’s critical that vendors support a good governance model to protect the data that’s flowing from one process to another. So, for example, if your company must support the Health Insurance Portability and Accountability Act (HIPAA), you want to make sure certain data streams -- like patient history or credit card numbers -- are encrypted.

Integration capabilities on demand

One of the next trends in this area is the ability for vendors to offer integration capabilities on an on-demand basis. Boomi, a vendor in this space, began offering Web application services this summer. At the Salesforce.com conference, for example, the company announced that its Boomi On Demand service would allow Salesforce.com customers to integrate all types of applications and data directly from the Web without the burden of installing and maintaining software packages or hardware appliances on premise.

Analysts continue to have high hopes for the software as a service (SaaS) market. Revenue for SaaS is projected to surpass $5.1 billion in 2007, a 21 percent increase from 2006 revenue, according to Gartner.  By 2011, it’s expected to reach $11.5 billion. 

“SaaS adoption is highest in applications that support simplified, common business processes or large, distributed virtual workforce teams,” says Sharon Mertz, research director at Gartner, in a news release. “Ease of use, rapid deployment, limited upfront investment in capital and staffing, plus a reduction in software management responsibility all make SaaS a desirable alternative to many on-premises solutions, and they will continue to act as drivers of growth.”

It’s clear that small and mid-size businesses have options that they did not have even one year ago. “First is the appliance, the second is the off-site managed service," Shimmin says. "How you make the decision of which to support will depend on your level of expertise, balanced with how much money you have. The hosted service, for example, will cost you more in the long run than the appliance, but you won’t have as much to worry about.”