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The Case for iPaaS Adoption by CSPs: Driving Business Agility and Easing Hybrid IntegrationCSPs' hybrid integration challenges and preferences for an iPaaS solution

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Summary ..........................................................................3

In brief .......................................................................3

Ovum view .......................................................................3

Key messages ..................................................................3

The state of the iPaaS market and CSP adoption trends ......................................................4

The rise of hybrid IT and digital modernization is driving iPaaS adoption ..........4iPaaS adoption slated to grow rapidly with a clear preference for CSP-centric features and capabilities .......................................................6

The value proposition of Amdocs iPaaS and services .....................................................................8

CSP-centric iPaaS and end-to-end professional services..............................................8

Appendix........................................................................ 10

Methodology ......................................................... 10

Contents About the author

Saurabh Sharma, Principal Analyst

Saurabh Sharma is a principal analyst in Ovum's Technology team, leading research and consulting in the integration middleware, platform-as-a-service (PaaS), business process management (BPM), and robotic process automation (RPA) spaces. His recent research has focused on application, B2B (EDI), cloud/iPaaS, mobile, and IoT integration and has covered the API management, BPM, RPA, and blockchain solutions/platforms.

Saurabh provides Ovum's clients, including enterprise IT leaders and vendor product and marketing management, with practical advice and insights by utilizing his expertise in the enterprise software market. Prior to joining Ovum, Saurabh worked as a software developer and a senior consultant with a major software vendor, which enabled him to develop an independent, 360-degree view of market.

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Ovum viewDigital transformation requirements necessitate flexible integration capabilities connecting diverse applications, services, APIs, and data stores. In order to compete effectively, and to launch new digital and media services, CSPs need to integrate numerous new over-the-top services, SaaS applications, cloud-based data stores, and channels. Frequent mergers and acquisitions in the telecommunications and media industry increase the complexity of integration because of the disparity associated with running multiple IT stacks on different underlying infrastructure.

To offer a better customer experience (CX), CSPs need to support hybrid IT environments and gradually modernize to achieve integration between legacy applications and modern microservices-based applications running on the cloud or on software containers. As a consequence, hybrid integration continues to be a complex business-IT issue for CSPs.

Hybrid integration, which involves disparate applications, data formats, deployment models, and transactions, is a multifaceted problem for which there is no simple solution. CSP IT leaders realize that existing legacy integration infrastructure offers less flexibility and is difficult to maintain, and they are now becoming more open to new integration approaches/platforms that improve developer productivity and allow them to "do more with less."

Agile hybrid integration calls for cloud-based integration platforms, such as iPaaS, that offer a uniform user experience (UX), developer productivity tools, and infrastructure and deployment flexibility to reduce time to integration and the cost of ownership. Integration modernization initiatives aim to use new integration patterns, development, and cultural practices, and flexible deployment options to drive business agility and reduce costs. For CSPs, it is important to identify a strategic partner (and not just an integration software vendor with system integration capabilities) that can provide a tailor-made cloud-based integration platform and essential advice and best practices based on years of practical experience to ensure that integration modernization initiatives stay on track and deliver desired outcomes.

Key messages• For CSPs, hybrid integration is one of the "top three" IT priorities for the next one to three years. A

significant number of CSP IT leaders attribute "substantial" importance to integration as a key enabler of business-IT strategy and initiatives.

• Improving UX, enabling time- and cost-efficient integration, reducing operational complexity, achieving greater scalability, and end-to-end governance and monitoring are near-term priorities for CSPs in 2019.

• Survey results indicate a high growth potential for iPaaS adoption, with 51% of CSP respondents planning to implement new iPaaS solutions over the next one to two years.

SummaryIn briefDigital transformation calls for business-IT agility, and communications service providers (CSPs) face complex integration challenges arising from an unrelenting need to achieve integration between on-premises business applications, back-end systems, software-as-a-service (SaaS) applications, cloud-based data stores, and partner applications and systems. The growing need for IT modernization driven by digitalization is forcing CSPs to look for new approaches to achieve rapid integration between applications following different architectural patterns (e.g., microservices architecture) and deployed across hybrid IT environments. In this context, the value proposition of an industry-specific integration-platform-as-a-service (iPaaS) solution and comprehensive professional services is attractive for CSPs.


• There is a preference for an industry-focused iPaaS solution delivering deployment flexibility, security, and prebuilt capabilities for faster time to market. Both process and systems/applications know-how and extensive execution experience were cited as desired attributes.

• Integration is seen as a core IT/technical competency by CSPs, and there is significant interest in integration vendors capable of functioning as a strategic partner by delivering value-added services on top of an industry-focused iPaaS solution.

The state of the iPaaS market and CSP adoption trendsThe rise of hybrid IT and digital modernization is driving iPaaS adoptionHybrid integration is a key business imperative for most enterprises: digitalization has led to a proliferation of applications, services, APIs, and data stores that need to be connected to realize end-to-end functionality and, in many cases, an entirely new digital business proposition. This is particularly true for CSPs, which are trying to streamline their complex operations and drive digital transformation via agile development and delivery models.

Line-of-business leaders are no longer willing to wait for months for the delivery of integration capabilities that are mission critical for specific business initiatives. Furthermore, integration competency centers, or integration centers of excellence, are being pushed hard to look for alternatives to traditional integration platforms (e.g., an enterprise service bus) that significantly reduce time to value without prolonged procurement cycles.

The current enterprise IT agenda gives top priority to connecting an ever-increasing number of endpoints and mitigating islands of integration infrastructure and information silos that make the vision of a "connected enterprise" difficult to achieve. According to a recent iPaaS primary research survey conducted by Ovum (Figure 1), 56% of CSP respondents selected hybrid (cloud and on-premises) integration as one of the top three IT priorities for the next one to three years. This becomes especially pertinent with 40% of respondents selecting migrating applications to the cloud as one of the top three IT priorities.

0 10 20 30 40 50 60

Launching a new LOB/channel

NFV and MANO implementation

Third-party partner servicesand applications onboarding

Blockchain integration

M&A back-end consolidation

Introducing AI & ML capabilities

Legacy modernization (mainframe, AS/400)

Platform or API economy (API monetization)

Hybrid (cloud and on-premises) integration (iPaaS)

Data management & analytics improvements

Migrating applications to the cloud

Within your company’s digital transformation strategy, what are the top three IT priorities you are focusing on for the next 1–3 years?

Proportion of respondents (%)

Rank 1 Rank 2 Rank 3

Figure 1: Top three IT priorities for CSPs for the next one to three years

Note: N=72Source: Ovum


Moreover, 32% of CSP respondents selected platform or API economy as one of the top three IT priorities. Data management and analytics improvements and introduction of artificial intelligence/machine learning capabilities were selected as the second and third most important IT priorities overall, indicating the importance of data and actionable intelligence.

Another interesting survey finding is that about a quarter of respondents attributed "substantial" importance to integration as a key part of business-IT strategy and a key enabler of digital business and transformation initiatives. An additional 46% of respondents attributed medium importance to "integration," with integration being an upfront consideration and part of a significant number of IT initiatives. These survey results clearly indicate that integration should be a key element of business-IT strategy for CSPs. The complexity and variety of integration requirements is expected to increase substantially in the near term, with about three-fifths of respondents anticipating a moderate-to-significant increase in the complexity and variety of integration requirements over the next one to two years.

The survey results in Figure 2 indicate that a range of integration use cases, including digital business enablement (e.g., self-service portal and mobile applications), cloud integration, API enablement and strategy, and data migration and conversion are expected to increase in scope and complexity over the next one to two years. In terms of key challenges and pain points associated with existing integration solutions, the survey respondents selected several options, including• inability to effectively integrate between multiple applications and data sources to meet business

requirements• multiple, redundant integration platforms and fragmented integration infrastructure• operational complexity (cost, availability, incidents, automation, and service level agreement [SLA]

compliance)• poor UX and a lack of user productivity features• exposing legacy assets/applications (e.g., AS/400 and mainframe applications) to a digital layer• end-to-end governance, visibility, and monitoring.

0 20 40 60 80 100

Other use cases

Partner onboarding

Middleware modernization and consolidation

Content syndication

Data migration and conversion

API enablement and API strategy

Cloud integration

Digital business enablement (e.g., self-service portal and mobile applications)

Which of the following use cases do you feel will increase in scope and complexity over the next 1–2 years?


Rank 1 Rank 2 Rank 3 Rank 4 Rank 5

Figure 2: Increasing scope and complexity of various integration use cases



Moreover, CSP respondents indicated that improving UX, enabling time- and cost-efficient integration, reducing operational complexity, achieving greater scalability, and end-to-end governance and monitoring are near-term priorities for 2019.

Against a background of changing digital business requirements, CSP IT leaders need to focus on revamping their enterprise integration strategy, which invariably will involve adoption of cloud platforms (e.g., iPaaS) for hybrid integration, offering deployment and operational flexibility and greater agility at a lower cost of ownership to meet multifaceted hybrid integration requirements.

An unrelenting drive toward SaaS is leading to a rapid shift of integration processes to the cloud. Ovum sees a greater inclination to deploy integration platforms closer to applications/data sources (i.e., in the cloud). In this context, it is worth noting that iPaaS is a mainstream solution for SaaS integration and is widely adopted by both large and medium-sized enterprises across various vertical industries. The value proposition of a cloud-based integration platform delivered as a packaged PaaS to offer a compelling UX and essential user productivity tools has led to a rapid growth in iPaaS adoption. Ovum forecasts the global spend on iPaaS solutions will grow at a cumulative annual growth rate (CAGR) of 60.5% between 2017 and 2022, exceeding $6.5bn by the end of 2022.

iPaaS adoption slated to grow rapidly with a clear preference for CSP-centric features and capabilitiesOvum's ICT Enterprise Insights 2018/19 survey, a global survey of senior IT executives, indicated that about 68% of 179 CSP respondents are planning substantial investment (i.e., strategic investment and investment in new solutions) in iPaaS solutions over the next 18-month period. Interestingly, in a separate recent iPaaS survey conducted by Ovum, about 36% of respondents at various CSPs indicated that they are currently using an iPaaS solution, and an additional 51% of respondents are planning to implement new iPaaS solutions over the next one to two years. These figures clearly indicate a high growth potential for iPaaS adoption by CSPs. Survey results indicate that among CSP IT leaders, there is a greater inclination to replace existing extract, transform, and load (ETL); business process management (BPM); and legacy modernization tools.

0 10 20 30 40 50 60

Self-service integration UI – supporting citizen developers

Industry focus – prepackaged connectors toindustry-leading applications and standards

Prebuilt capabilities and applicationsfor faster time to market

Flexibility – support for a range of deployment optionsto best meet an enterprise's business strategy

Security – aligned with industry securitystandards and data privacy regulations

All inclusive – providing the full ecosystem forimplementing and operating integration 24

22

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7 13 17

31 15

15 18

14 25

21 14

7 11

What are the most important characteristics you need from an iPaaS platform for maximum effectiveness?


Rank 1 Rank 2 Rank 3

Figure 3: Most important characteristics for an iPaaS solution



As shown in Figure 3, deployment flexibility, industry focus, security, prebuilt capabilities and applications for faster time to market, and an ecosystem for implementing and operating integration are the key characteristics for an iPaaS solution aimed at CSPs. When these survey results are seen in totality, it is clear that CSPs prefer an industry-focused iPaaS solution delivering deployment flexibility, security, and prebuilt capabilities for faster time to market.

In the context of applicability to CSPs (Figure 4), 36% of respondents selected business process expertise and skills specific to the telecommunications and media vertical as the most important characteristic for an iPaaS solution vendor. Moreover, 35% of respondents selected deep understanding of vertical-specific applications and back-end systems (e.g., core business support systems [BSS] and operations support systems [OSS]) as the most important characteristic. Interestingly, CSP respondents show a significant interest in iPaaS vendors providing both technology and consulting/managed services for integration modernization initiatives.

In terms of addressing pain points with existing integration solutions, more than half of respondents selected the option of using an integration platform vendor as a strategic partner to tackle the issues related to operational complexity (cost, availability, incidents, automation, and SLA compliance). About half of respondents preferred an integration platform vendor functioning as a strategic partner for tackling issues related to their inability to effectively (i.e., within time and cost constraints) integrate between multiple applications and data sources. These survey results clearly indicate that integration is seen as a core IT/technical competency by CSPs, and there is significant interest in integration vendors capable of functioning as a strategic partner.

The survey results in Figure 5 indicate that vendors that can function as a strategic partner offering comprehensive end-to-end professional services for implementing iPaaS solutions are best suited to the requirements of CSPs. With only 8% of respondents indicating that they do not see a need for professional services, there is further reinforcement of the premise that integration is considered an IT competency by a majority of CSPs, and consequently, there is a significant need for external professional services expertise.

0 20 40 60 80 100

Ability to provide both technology and consulting/managed services for an

integration modernization initiative

Innovative technology intellectual property

Deep understanding of vertical-specific applications and back-end systems

Flexible commercial and pricing models

Business process expertise and skills specifically within telco and media

Flexibility/responsiveness to customer need

46

36

36

35

31

29 44 17 8 1

39 24 4 3

40 17 6 3

40 21 11

44 10 7 3

40 10 3 1

What are the most important characteristics you look for in an iPaaS solution vendor?


Most important More important Important Less important Least important

Figure 4: Important characteristics for an iPaaS solution vendor



The value proposition of Amdocs iPaaS and servicesCSP-centric iPaaS and end-to-end professional servicesEarlier this year, Amdocs announced the availability of the industry’s first CSP-centric iPaaS solution (see Figure 6) aimed at a range of use cases including but not limited to cloud integration, digital enablement, asset monetization, business process optimization, data migration and conversion, eSIM management, and partner onboarding. Amdocs iPaaS supports a range of deployment options, including on-premises and private cloud (AWS, Google, and Azure infrastructure-as-a-service private cloud environments) deployment and delivery as a fully managed iPaaS.

The iPaaS solution offers prebuilt connectors to a range of BSS and OSS solutions, CRM applications, telco-specific data models, and other key applications. There is support for TM Forum open APIs, and Amdocs has committed to enhancements in line with future TM Forum releases. The iPaaS solution offers an intuitive, "low-code" visual designer integration user interface (UI), enabling nontechnical users to create integration flows and data/message transformations without any considerable coding skills.

In the context of BPM, Amdocs iPaaS enables predefined business processes (e.g., order, care, and billing) from both internal and external channels as well as allowing quick creation of integration flows, monitoring, visibility, and issue remediation. The BPM module enables users to configure business flows by abstraction and isolation of the front-end and downstream systems.

Product catalog mapping is used for maintaining many-to-many mapping definitions to allow the orders received from different sources to be routed to multiple target systems. This capability supports multiple levels of mapping required for complex (hierarchical) structures including attributes or simple rate codes. For example, each level of a complex structure can be a different rate code in the target system.

Fallout management provides capabilities enabling rapid and efficient remediation of transactions having processing issues and fallout events. It focuses on identifying the root cause for a set of issues and resolving these issues in bulk and as per business priorities to help ensure that business-critical issues are handled ahead of others.

0 20 40 60 80

Other

No services are needed, only the iPaaS platform

Integration development & implementation

Fully managed services (development, operations, and continuous improvement)

End-to-end visibility & monitoring, including issues identification and remediation

Integration solution design and assessment

Strategic consulting, including business caseand business value assessment

1

8

50

56

61

61

65

Which services are most relevant to you when implementing a technological iPaaS solution?


Figure 5: Most relevant services for implementing an iPaaS solution



A developer hub and community allows publishing of APIs for a range of internal and external use cases and offers a development sandbox and support forum. The Amdocs iPaaS solution offers multiple security controls to protect resources, data, and the execution process and helps ensure end-to-end data privacy and network access control. With the operational UI, users can review transaction data and, if needed, they can update associated data and resubmit the transaction. The iPaaS solution supports end-to-end visibility via visual execution maps and comprehensive logging functionality.

The other key aspect of the Amdocs iPaaS value proposition is a range of end-to-end professional services across the entire integration lifecycle:• consulting: the development of strategy, roadmaps, and hybrid solutions exploiting best practices and

technologies• design and development: the process of ideation, architecture assessment, development with DevOps

capabilities, and implementation of enterprise-wide solutions• testing: manual and automated testing services across the entire integration lifecycle• billing and settlement: integration with Amdocs and third-party billing and settlement systems and

support for various monetization models• IT operations: continuous management and governance of the iPaaS platform and the underlying IT

infrastructure (e.g., on-premises data centers and private/public cloud environments) and proactive issue resolution

• business operations: end-to-end visibility and control over integration flows, compliance with SLAs, and adherence to business key performance indicators.

Figure 6: Key features and capabilities of Amdocs iPaaS solution

Source: Amdocs


Overall, Amdocs iPaaS is aimed at resolving a range of hybrid integration challenges faced by CSPs as they focus on meeting digital business requirements. While the technological intellectual property of Amdocs iPaaS is a key differentiator from the perspective of CSP integration requirements, the availability of end-to-end professional services allows Amdocs to function as a strategic partner for CSPs embarking on integration modernization initiatives.

AppendixMethodologyThe views expressed in this white paper are based on Ovum's ongoing research into the global integration middleware market and take into account observations from briefings with middleware vendors as well as analysis of the opinions of integration practitioners/developers and solution/enterprise architects, including those available on public communities and forums. Results from Ovum's ICT Enterprise Insights 2018/19 survey and market-size estimates from Ovum's integration software (middleware) market forecast are also included in this white paper.

Ovum conducted a primary research survey in June 2019, the respondents being 72 CSP IT decision-makers and influencers spread across North America; Central and South America; Europe, the Middle East, and Africa (EMEA); and Asia-Pacific. The survey investigated CSPs' preferences and challenges in the context of their enterprise integration strategy and its relationship with business-IT priorities as well as their expectations from and inclination to invest in iPaaS solutions. The results of this primary research survey are included in this white paper.

OVUM CONSULTINGOvum is a market-leading data, research, and consulting business focused on helping digital service providers, technology companies, and enterprise decision-makers thrive in the connected digital economy.

Through our 150 analysts worldwide, we offer expert analysis and strategic insight across the IT, telecoms, and media industries.

We create business advantage for our customers by providing actionable insight to support business planning, product development, and go-to-market initiatives.

Our unique combination of authoritative data, market analysis, and vertical industry expertise is designed to empower decision-making, helping our clients to profit from new technologies and capitalize on evolving business models.

Ovum is part of Informa Tech, a B2B Information Services business serving the Technology, Media, and Telecommunications sector. The Informa group is listed on the London Stock Exchange.

We hope that this analysis will help you make informed and imaginative business decisions. If you have further requirements, Ovum's consulting team may be able to help your company identify future trends and opportunities. Please contact us via

https://ovum.informa.com/contact/contact-us

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The Case for iPaaS Adoption by CSPs: Driving Business .../media/informa-shop-window/tmt/whitepapers-and-pr/the-case-for...and applications onboarding Blockchain integration M&A back-end