New German study shows the link between SaaS integration, the success of a digital business strategy, and new digital technologies

Olga Annenko digital transformation, tech trends

The link between integration, digital business strategy and new digital technologies

When we got the results of the trend study “Cloud Integration Excellence”, which was carried out in summer 2018 by the German IT research company Crisp Research on behalf of Deutsche Telekom, the Open Integration Hub project and us, elastic.io, it was, on the one hand, reassuring to see that the trends in SaaS application and data integration are going in the direction where we thought they would. Yet, on the other hand, it was puzzling to find out how differently the new digital technologies such as IoT, Industry 4.0, Artificial Intelligence and Augmented Reality are regarded at the moment.

The state of the digital business strategy in Germany and around the world

First of all, let’s start with the general question of the state of the digital business strategy. About 75 per cent of German companies, at least in the SME sector, claim to already have a digital business strategy in place by the middle of 2019. Here, the surveyed companies identified such technologies as IoT, Industry 4.0, Artificial Intelligence and Augmented Reality as the most important technology building blocks, while considering cloud computing as the enabler of all this in the first place.

IoT, Industry 4.0, Artificial Intelligence and Augmented Reality are the most important technology building blocks Now, these stats concern specifically German companies. In comparison to that, on the worldwide scale, the numbers are different, at least according to an extensive survey of nearly 4,000 CIOs worldwide by Harvey Nash and KPMG. There, only 32 per cent of CIOs said that their organisations have an enterprise-wide digital strategy – the number that according to the report is down on last year, “suggesting IT leaders are rethinking their approach on digital”. But apart from that, the core technologies that companies focus on are basically the same as listed above: With the cloud technology taking the first place and followed by IoT, AI, mobile and so on.

The role of SaaS integration in the digital business strategy

With the digital business strategy being at such an advanced stage, it was more or less expected to read that 64 per cent of German respondents indicated that poor integration between new cloud applications and the IT landscape on-premises, or the complete absence thereof, impedes faster implementation of the cloud technologies and, consequently, impedes faster implementation of the digital business strategy.

The majority of companies agree that poor integration between new SaaS applications and the existing IT systems impedes faster implementation of the digital strategyClick To Tweet

Unfortunately, the Harvey Nash and KPMG survey didn’t include any similar questions, which makes a direct comparison impossible. But their survey says that “‘Integrating core business systems into digital’ and ‘relying on an overall digital vision’ proves elusive for many”. Similarly, based on multiple papers on data and application integration published by Gartner, one can at least assume that in the context of a digital strategy, the importance of integrating SaaS into the fabric of the existing IT applications and systems is acknowledged by any other companies worldwide.

An unexpected twist with the new digital technologies

Now, remember that a high percentage of German digital leaders stated that poor SaaS integration is an impediment to a successful implementation of the digital business strategy. So, considering this, it was particularly astonishing to find out that the majority of surveyed companies believe that they don’t need to integrate the new technologies such as IoT or Industry 4.0 with existing applications, no matter whether in the cloud or on-premises. In fact, only 19,9 per cent considered it to be imperative, with the rest referringOnly 19,9% respondents considered the integration of new digital technologies to be imperative to such integration efforts as anything from merely “sensible” to “unnecessary”.

It was astonishing because if you put it all together in one context, the data from our German study provide some parallels that are hard to miss. Cloud computing used to be there where you now find IoT and AI – hip, trendy, cool, a must-try thing. Now, businesses have realized that isolated cloud applications cannot bring in as much value as when they are integrated with the existing IT systems. Yet somehow they believe that the implementation of AI or IoT technologies can be a success even when these will remain largely cut off from the rest of the IT landscape.

“…Yeah, it’s always better when we’re together”

Considering all this, one can only utter a fair word of caution. The necessity of the integration of new technologies with the rest of the IT estate should be really taken into consideration from the very start, even if the immediate benefits are not apparent yet or the costs of such an effort seem to be unsubstantiated. Just think about what a crucial role the integration of cloud applications with the on-premises systems plays now in delivering more value for the customer and finding a competitive advantage, even if IT departments didn’t think about it as such at the very beginning. It is impossible to assess with high confidence right now that the new technologies will be much better off when playing together with the rest of the IT ecosystem, but it is equally impossible to state the opposite.

The complete study “Cloud Integration Excellence – from Middleware to the Cloud Ecosystem” is now available for free download (in German). Or read the summarized highlights in our press release.


About the Author

Olga Annenko

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Olga Annenko is a tech enthusiast and marketing professional. She loves to write about data and application integration, API economy, cloud technology, and how all that can be combined to drive companies' digital transformation.


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