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SaaS data integration brings cost gotchas to cloud shops

On-premises and cloud data integration can carry unexpected costs, but some IT pros have found tools to help work through this and other problems.

With its promise of lower costs and simplified management, Software as a Service can be appealing in the enterprise...

-- until it comes time to integrate it with on-premises applications and data.

That's when enterprises looking for an easy solution to application management problems might end up spending more time and money than they bargained for.

Most companies have years and years of data, and that's a really big nightmare to integrate.

Eric Edelson,
vice president, Fireclay Tile

"[Some companies] think, 'Well, I don't have to hire developers anymore, because I have a SaaS solution,' and that's not true," said Sean McDermott, CEO of Windward IT Solutions, an IT service management and systems engineering firm based in Herndon, Va.

Given the customization work that's involved in integrating on-premises apps and their data with Software as a Service (SaaS) apps, it can cost between $80,000 and $100,000 to switch between SaaS apps.

"There's this expectation that moving to a SaaS-based solution … is going to solve all [their] problems, and they're shocked when they see the bill," McDermott said. "So you better make your decision right the first time around, because it can be a very costly mistake."

Some 34% of 1,497 respondents to TechTarget's Cloud Pulse Survey completed in August, cited SaaS application integration as an inhibitor to SaaS deployments -- and one that is often overlooked until it's too late. Another 26% cited SaaS data integration problems. For example, incompatible database formats between SaaS and on-premises apps.

Fighting SaaS data integration problems with more SaaS

Some longtime users of SaaS services have found some cloud-based third-party tools helpful, but there's no substitute for in-house developers with a deep knowledge of applications to put those tools to use, they said.

"The key in any kind of integration implementation is that you need some highly skilled, knowledgeable people to make it happen," said Lien Chen, corporate director of IT for San Jose, Calif.-based RAE Systems.

RAE, a global manufacturer of chemical radiation detection systems, uses a SaaS offering called Informatica Cloud to integrate data between its on-premises Oracle enterprise resource planning (ERP) system, on-premises FileMaker Pro system, and in the cloud.

"The Oracle system has so many layers and so many different tables … and you have to know where to pull [data] from," Chen said. "That was a struggle."

More on Saas data integration

Four SaaS data integration challenges to keep an eye out for

How to approach data integration

RAE deployed Informatica during the cleanup of 2010's Deepwater Horizon oil spill in the Gulf of Mexico, when demand for its products suddenly increased. It needed a more streamlined, less error-prone way of getting data from the Oracle ERP system into Salesforce, which its customer service personnel uses. After installing a lightweight agent on-premise, developers at RAE used a drag-and-drop Web interface to set up a link between the two systems, which is refreshed automatically multiple times per day.

Previously, the customer service personnel had to juggle Salesforce and Oracle, as well as a separate serial number database in FileMaker Pro, Chen said. Now that all three programs have been integrated with Informatica, the personnel can just focus on the customer, she said.

The devil's in the SaaS data integration details

Meanwhile, there's a plethora of other products on the market that claim to aid in application and/or data integration between on-premise apps and the cloud, including Dell's Boomi, MuleSoft, Jitterbit, Adeptia and IBM's Cast Iron. Third-party tools aren't necessarily a panacea, however, McDermott said.

"I'm a big believer in SaaS solutions, but there's a lot of stuff under the hood that you've got to think about," he said.

For example, multiple objects in one application might need to be concatenated into one on the other side. Users should make sure to ask integration vendors detailed questions around these kinds of issues, McDermott said.

"The devil's in the details," he said.

Fireclay Tile, a manufacturer headquartered in San Jose, Calif., uses another SaaS tool called Data Integrator from Pervasive Software to integrate a QuickBooks accounting system with Salesforce.

"What we were doing before was double entry, where you'd enter the sales order in one place, then go over to the accounting department and they'd re-enter all that information," Fireclay Vice President Eric Edelson said.

With the two systems integrated through Pervasive's SaaS, Fireclay was able to consolidate headcount and put those freed-up staff into sales and marketing roles.

There were some sacrifices Fireclay was willing to make to integrate Salesforce, however, Edelson said. For example, the company migrated customer records when it first started using the service in 2009, but it didn't integrate historical transaction information, instead leaving an archive on an older system.

"Most companies have years and years of data, and that's a really big nightmare to integrate all that information," Edelson said. "We made the decision that we don't need all that information."

They've barely used the old computer since then, and it's just not that important, Edelson said.

Beth Pariseau is a senior news writer for and Write to her at or follow @PariseauTTon Twitter.

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