Gartner® just released its latest Magic Quadrant (MQ)™, and for the fifth time in a row, we’ve been named a Leader.
The Enterprise iPaaS Magic Quadrant™ has recognized vendors for many years, but 2023 is different. Simply put, we feel that Workato is now best suited for a market that has changed quite dramatically.
The change is not straightforward to understand because it’s multi-faceted. There are multiple trends taking place at the same time, all of which are shaping what it means to be a great iPaaS in 2023 and why the established iPaaS vendors from the past are losing relevance.
As a part of the Workato founding executive team, I’ve had the privilege of interacting with many Workato customers and partners as well as industry experts. Based on those conversations, the top iPaaS trends and changes I see are as follows.
1. Central IT is overloaded and paralyzed by integration needs. A decentralized approach is starting to become the norm
The relentless business growth and change as well as the demands of going digital, which have been exacerbated by the COVID pandemic, have put the central IT team under great pressure. This applies to digital-native and old-school companies alike across all industries. IT is now desperately looking to leverage an extended team of resources, rather than just highly-technical specialists, to integrate and automate. It’s simply the only way to meet expectations.
Back in 2017, I worked with one of our early customers, Slack, who has since built over 1,500 Workato recipes to integrate and automate their business. This was during Slack’s hypergrowth phase. Monica Goren, who selected Workato, explained: “I know I can implement everything with Mulesoft. I used Mulesoft before. Yet, I also know that I simply can’t implement what the business needs as quickly as they want it. There’s too much the business needs and too few of us in the IT team. But with Workato, I have a chance. I can do things a lot faster and I can get more people than just my small team (involved)”.
Of course, not every company is as fast-growing as Slack, but similar urgency exists in traditional enterprises. Take the example of Workato customer David Jones. Think of David Jones as a luxury department store similar to Nordstrom, but based in Australia. They pride themselves in providing a superior store experience. But during COVID, stores were closed. To survive, David Jones decided to accelerate their e-commerce channel. They quickly realized that their existing integration tool wasn’t fast enough. Integration was the bottleneck, the critical path of their large-scale digital transformation. Switching to Workato ensured that the transformation project could meet the CEO-mandated deadlines. This applies to digital transformations, integrating acquisitions, and wherever business change is taking place.
Similarly, one of our East Coast prospects recently stated: “We will select Workato. It’s because our Informatica integration tool simply doesn’t scale”. At first, we were a bit perplexed. Informatica Power Center was known to scale well for high data volumes. But he added: “And I am not talking about technical scalability. That’s not the main issue for us. The problem is that only two of my guys can use Informatica. It simply doesn’t scale across my organization.”
The same reason led MGM, a leading entertainment company, to select Workato. MGM undertook a large IT modernization project to replace its custom-built applications with modern SaaS. Salesforce CRM was selected as a cornerstone of the modernization efforts. Salesforce owns the developer-centric Mulesoft integration tool and so it felt inevitable for MGM to also select Mulesoft. Ironically, it was MGM’s Salesforce Center of Excellence (CoE) that favored Workato. Mulesoft would have required adding Java developers to the Salesforce CoE whereas the existing Salesforce admin resources could handle Workato. Manoj Parakkal, the MGM Salesforce CoE Leader, explains:
Much of Workato’s Embedded market success can be explained the same way. Application vendors can add a white-labeled version of Workato to the application they sell. This is now 30% of Workato’s business. Why the success? Because, with Workato, integrations, which before required SW developers to write code, now become accessible to application administrators. This turns the application vendors’ audience into superheroes. They couldn’t make much use of the available technical APIs, but now they can unlock even more value from the application.
Another type of administrator benefits from Workato: the general IT admin or database admin. These are also not full-stack developers, so they are often limited to basic OS scripting or tool configurations. Andre Casper from Vodafone Group is such an example. He’s skilled in IT service management and delivery, tools like Splunk, and responsible for a large farm of databases. Andre picked Workato because he could, without development help, orchestrate his entire IT tool chain. And the security team at Nutanix used Workato to do the same for security and found Workato much more powerful and easy to use than their existing SOAR tool. IT admins really benefit from Workato.
Maybe unexpectedly, development pros also find Workato compelling. A software development director had a master plan when he selected Workato back in 2018. “Our team of developers always has too much to do and integrating isn’t what they are the best at or even like to do most. When I found Workato, I saw the opportunity to have my business analysts help out with integrations. That would free up time for my developers for their main projects.” 4 years in, that masterplan has worked out beautifully with Workato involved in all kinds of projects, including the introduction of Snowflake and Slack, while being able to focus his development staff on core application development projects.
It’s important to recognize that Workato is disruptive. Hence, Workato will not be liked by all. After an in-depth Workato demo, a U.S.-based Deloitte architect once told me, “This may well be what the future looks like. But, don’t be upset at me, we like things that are complex. Clients pay us by the hour. Hence, as long as people buy Mulesoft, we will prefer Mulesoft projects”. I fully understand. An auto-mechanic will never be excited about EVs. EVs disrupt the auto-mechanic’s business, just like Workato disrupts Deloitte’s large Mulesoft practice. Interestingly, Deloitte Israel just recommended Workato to Strauss, the country’s largest food producer. At the end of the day, client satisfaction matters. PWC, which does many fixed-price projects, sees margin potential in Workato while offering competitive prices. HCL relies on Workato to power its all-inclusive managed integration service for the same reason. And Connor Group, a specialist consultant to CFOs, can now also implement, not just recommend, finance integrations and automations. As process, not technical, experts, they could not have done so with any other tool but Workato.
There’s one more disruptive story to tell, namely that of Voya (previously ING Bank US), a large Financial Services company. Maribeth Kaine, a Senior Architect on their team, told me about her main motivation for bringing Workato to Voya: “I’ve done Enterprise IT for many decades and it has never been as bad as now. Because of Outsourcing, it’s almost impossible to get anything done. Everything happens on the other side of the globe and with a written request process. It’s as waterfall as it gets. It’s terrible and makes our lives miserable. Workato has the power to change this. Now, we can be involved. We can give feedback. It’s so much more agile.”
The business has long felt the pain of central IT not being able to deliver quickly enough to their needs. Some operations personnel describe their IT department as “the department of NO”, because it simply can’t keep up. “Low-code/no-code” shadow IT tools for individuals close the void. For the integration/automation space, the most popular low-code/no-code option is Zapier. Atlassian, another Workato customer, had hundreds of employees individually subscribed to Zapier, which was racking up a substantial cost for the enterprise, although via lots of expense reports. Without any oversight, any security review, and no overseas data centers to meet regional data privacy compliance requirements, Atlassian had no choice but to shut down the use of Zapier to protect their company from untenable risks.
Many prospects confuse Workato with something like Zapier. One German prospect recently asked me: “You look just like Zapier. Why are you more expensive?” While the experience looks similar on the surface—the point is to make Integration approachable to non-specialists—, Workato has the enterprise in mind. Workato can handle large data loads—up to 500,000 records per second, as certified by Snowflake. Workato has a sophisticated agent technology to interoperate reliably and scalably with business systems behind the firewall (without having to open any firewall ports). As far as security goes, Workato runs in data centers across the entire world to meet regional data privacy regulations and offers double encryption, including a BYOK encryption key that can be kept locally via an HSM (hardware security module). The second encryption key gets rotated every hour. And Workato has a Dev/Test/Production lifecycle mechanism that can be federated across multiple decentralized teams with central supervision. Moreover, Workato has a sophisticated monitoring and management control center, which includes management automation.
The executive team at Workato has built multiple Enterprise integration platforms (TIBCO, BEA, Oracle Fusion Middleware) before, so Enterprise governance is something we understand well. However, decentralization/democratization today requires a new approach to governance than the central approach of the past. Workato has worked very closely with customers like Slack, Atlassian, and Hubspot to create novel, decentralized governance. With this approach, these customers built more than 1,500 recipes each and did so with decentralized teams that consisted of hundreds of “builders”. These builders are made up of many different personas, including application administrators, business analysts, and operations staff with an affinity for technical projects.
Sometimes, this even includes business executives. I remember a CFO at a prospect account who was eager to see Workato’s order-to-cash recipes. Our application partner and the sales team were nervous. They had bad experience with executives wanting to look into technical integration platforms. This always led to confusion and could stall the deal. But Workato’s recipe concept is very different from specialist-centric tools. It’s oriented towards describing a step-by-step business process that involves multiple data objects. The CFO got it very quickly and loved that he could review and add value to the process. Such ongoing collaboration between IT and people in the business who know the process in detail is what makes a company truly agile. It’s a very powerful concept.
One important aspect of a decentralized approach to using an integration platform is the need for a new level of product support. First of all, there are more builders that need assistance. Then, these non-specialist integration resources often require “how to” support, not just “break-fix” support for bugs. It’s not just about the product, but about the entire experience, including product support.
Knowing this, we’ve invested heavily in our support organization—and we’ve been able to see these investments pay off. Our customers regularly applaud our support organization for going above and beyond. Here’s just a small snapshot of the feedback we’ve received:
- “At Precisely, we were a Boomi customer and a Workato prospect. Boomi took 7 days to respond to our Support request. Workato got back in 7 Minutes”. That’s when we picked Workato”
- “As the CIO of DB Cargo – TFG, I can tell you that Workato’s Support is faster and more comprehensive than IBM’s support, for which we pay Millions each year”
- “At GLG, we only ran into issues with Workato once – when changes were made to the callable recipes. But someone from Workato Support got on it and got us up and running again in 5 Min.”
- “Workato Support was incredibly helpful for us at Wix. I was stumped on a process for weeks, and you helped solve it in minutes. Every time I open up the live chat I know I’m going to get great support. Thank you!”
- “Workato Support reviewed my recipe and pointed out a very crucial step which was resulting in improper file uploads for us at Arlo. It was an awesome experience. Thanks a lot for the help and support.”
Finally, I would like to talk about an example where Workato’s capabilities and the safety net of our decentralized governance convinced Confluent to execute on an Enterprise-wide automation program endorsed by the CFO, Sudhakar Jukanti.
For context, Confluent needed automation to scale its rapidly-growing business. People alone would simply not scale fast enough. With a rigorous discovery and prioritization process, 100+ automation candidates were identified with significant time savings potential for the company while, at the same time, reducing the risk of manual errors. A large number of diverse employees were involved in the discovery process and a large, decentralized team of builders will now execute on all the opportunities. If you know integration from the past, this almost sounds like science fiction. With a central approach, only a handful of integrations can be worked on, and typically each one takes over 6 months to complete. That’s the limit of what can be accomplished. This is what made some call IT the “department of NO”. Slack, Atlassian, Hubspot, and Confluence are demonstrating that with a modern platform like Workato and a decentralized approach, it doesn’t have to be the case. Welcome to “IT, the Department of YES”.
2. Automation is no longer only about RPA
If there’s one platform category that pioneered decentralization in integration and automation, it’s RPA (robotic process automation). RPA is the perfect go-to tool for operations teams to automate tasks without having to request help from the IT department. Because RPA relies on simulating a person’s screen interactions, everything works just with user accounts—no extra IT checks and permissions required. As we described above, organizations suffer from a central IT bottleneck, so RPA seems like the perfect antidote.
RPA became the “shadow IT” alternative to integration services offered by IT specialists. Massimo Pezzini eloquently explained that “Integration and Automation are two slides of the same coin” but in many companies, RPA became the way to make integration happen by going around IT.
Over the last few years, I see a change happening that brings RPA and integration together. There used to be one term that clearly separated decentralized RPA users from central integration teams: API. For the IT teams, APIs were at the center of their strategy. It was all about creating APIs and re-using them. On the other hand, for RPA users, APIs were their demarcation line, something they didn’t want to touch or talk about. When APIs were involved, it was for “the other side”, for IT. They felt comfortable simulating keystrokes on the screen, but felt “out of place” making use of backend APIs.
After attending 2 automation conferences this year in the US and the UK, I noticed a significant change. RPA users started to discuss the power of data currently inaccessible to their screen-based automations. And, very importantly, they were now ready to tackle APIs. It felt like, within just one year, APIs had become acceptable to RPA users.
Why is this? From what I can tell, RPA users are experiencing the limits of screen-based automations. As a former CTO from Citigroup told me: “RPA works, but only for very basic, high-volume tasks. Once it’s a multi-step process with a bit more complex logic, RPA quickly becomes onerous. And RPA really can’t make use of all the data in your data warehouse, because you really can’t access them well on a screen”.
Novuna, formerly Hitachi Finance UK, experienced how an API-based automation with Workato turned out to be a much faster, more powerful, and more elegant solution over RPA. The scenario was invoice processing, a very common RPA scenario. The process had 3 main touch points:
- Invoices were processed by Evolution AI, a data extraction tool with 95% accuracy and which Novuna had experience using
- Vendor data had to be validated against the Companies House service provided by the UK government to validate company addresses
- The invoice data needed to be integrated with Alfa, a leading asset financing platform used by Novuna
Every one of these touchpoints has an API. While screen-based automation wasn’t natural, orchestrating the end-to-end process with Workato across all of the APIs was. Furthermore, decision logic could be easily expressed in Workato recipes. And as an unexpected benefit, a no-code user interface in Microsoft Teams was used for the team to deal with document processing exceptions. As Alfa isn’t an easy application to integrate with, Workato’s API abstraction capabilities (via the connector SDK) was very helpful. Furthermore, Workato recipes are vastly more reliable as APIs don’t change and exception handling is much more superior.
I’ve also seen a recent prospect that’s a CPG company with a decentralized automation center of excellence (CoE) that needed a supplier datahub. A datahub isn’t a project that’s feasible for RPA due to the need to interact with a data warehouse and perform ongoing data syncs. In Workato, they found a capable data integration tool that felt as accessible to the decentralized users as an RPA platform. APIs can be leveraged, but once they are abstracted by a Workato connector, no more technical API skills are required. Workato helped this automation CoE add value to the business in ways it previously couldn’t.
One very big differentiator that many people don’t notice immediately with Workato are our “triggers”. In a nutshell, Workato can start an automation exactly when something happens in your applications or data. This can be a standard business event, e.g. “a new order got submitted”, but it can also be a business exception event, e.g. “when a customer has more than 10 open support tickets” or an event in your data warehouse, e.g. “all customers who used a new feature today for the first time”, which can then lead to application automations (e.g. loading all these customers into a marketing upsell campaign). In the data warehouse world, this is sometimes called “Reverse ETL”. Data isn’t loaded into the data warehouse. Instead, based on the data in the data warehouse, data is moved to other applications to kick off business processes. Chief Martech founder Scott Brinker calls this “Big Operations”, namely operationalizing “Big Data” for smart automations rather than just using a BI tool to look at the data manually.
Pete Matern, a former architect at Nike, was impressed by the power of Workato triggers. In his words, “most integration platforms today are mostly about basic data movement. Automation platforms typically implement predetermined, repetitive tasks without people interactions. Workato is more than both integration or automation. It’s implementing decisions based on signal intelligence.” Pete characterizes Workato’s triggers as “signal intelligence”, which has high business value because it makes it possible to handle business exceptions. To him, the Workato recipe actions following the trigger event are about “automating decisions”. We’ve seen Workato customers like Slack (automating upsell campaigns based on user behavior triggers) and Hubspot (automating customer success prioritization based on customer experience data) operationalize what Pete is describing successfully. Importantly, this isn’t something that would be easily possible with an RPA tool nor with a traditional iPaaS platform.
3. On-prem is no longer a requirement. Cloud-native is enabling organizations to drive automation and integration at scale
Workato was founded with the conviction that a modern iPaaS needs to be cloud-native. This is fundamental to Workato’s scalability, speed of development, and low total cost of ownership. However, up to the COVID pandemic, large Enterprises often required their iPaaS to have an on-prem deployment option.
Back in 2018, we had a longer conversation with 3rd-party analysts on this topic. They mentioned latency of integrations between two on-prem data sources as the primary reason for the iPaaS on-prem requirement. Intuitively, it makes sense that the integration platform should be where the data is. But take into consideration that internet bandwidth is now ubiquitous and low-latency requirements can make up no more than 15% of integration use cases. As such, maybe the hassle of setting up and maintaining your own integration environment on-prem isn’t such a good idea after all?
Our customer MGM experienced this the hard way during the early days of the COVID lock-down. They had configured their on-prem SAP instance to be only accessible from the office, and a remote VPN access solution wasn’t readily available. For them, on-prem requirements had created a liability leading to a “cloud native only” policy going forward.
Of course, security was another key reason for the on-prem requirement. I heard from a Swiss pharma company that cloud wasn’t an option for them given local data privacy laws and their regulated industry. Recently, we discussed cloud security implications with Controlware, one of Germany’s leading resellers of firewalls. Controlware, of course, understands security extremely well. They liked that Workato is fully encrypted, offers “BYOK” (bring your own encryption key), and has a datacenter in Frankfurt. However, that still wasn’t good enough for German data privacy laws as the key would be hosted on the AWS infrastructure, and hence, with a U.S. company. Together, we designed the now available HSM (hardware security module) solution, where the key is stored in Germany and only authenticated against by AWS and Workato. According to Controlware, “with these measures, Workato is equivalent to an on-prem deployment in the eyes of the German data privacy laws”. When we further highlighted that we have a secondary Workato encryption key that gets rotated once every hour, they started to ponder “this feels even more secure than on-prem”.
4. Automation and integration belong together
Last, but not least, I also notice a change happening related to human workflows, previously the domain of BPM (business process management) platforms. BPM has been a relatively slow-growing market, and it’s typically limited to a few target industries (e.g. insurance) to create custom, stand-alone case management applications.
As a former process consultant, I have a background in BPR (business process redesign). Based on my experience, the most important business processes are the ones that span multiple business systems. Such an end-to-end business process is best modeled as a workflow, but it relies on strong integration capabilities so that it can tap into the existing application stack. At the same time, it’s not enough to simply move data from one application to another. An end-to-end process requires both decision logic and (potentially) human steps for exception handling. What’s needed is a platform that combines workflow with integration. This is why we started Workato 10 years back. Workato has incredibly strong integration capabilities and Workato recipes implement the multi-step process automation logic.
As an example, Slack’s Lead to Cash process is “a piece of art”. Created collaboratively in a team comprised of IT, order management, and finance operations, the process implementation has been refined over a multi-month agile refinement period and takes into account all levels of automation and exception handling. Other Workato customers have similar automation and integration implementations, including Precisely with its 77-step, order-to-cash process.
Very early on, we invested in Workbot for Slack (we later expanded these capabilities to MS Teams and Workplace by Meta). We really liked how Slack bots provided a low-code approach to add human interactions to Workato automation recipes. It happened in a tool that already had users’ attention and the Workbot connector allowed non-developers to implement powerful human workflows that were connected with their business applications. With these Workbots, Workato turned into a full-blown workflow platform. In 2023, we’re excited to take this a step further by adding Workato Apps, a web-based, low-code UI capability for Workato.
We believe that the 2023 Gartner® Magic Quadrant™ for iPaaS clearly signals that we are entering a new era and that a generational shift from traditional integration platforms is taking place. We’re moving towards modern, cloud-native platforms that unify integration and process automations, which we believe leaves Workato in a position to benefit and add tremendous value to enterprises everywhere in the world, no matter where they are in their digital journeys.