Last month, Twilio bought Segment.io, a vertical SaaS software that focuses on customer data integration. This move by Twilio comes after buying Sendgrid last year and follows a bundling strategy. Twilio wants to be a 360° platform when it comes to customer value proposition.
In a famous quote, Jim Barksdale said the two ways to make money is by bundling products together or unbundling them and creating targeted offers.
We see both in the software industry today. Microsoft, Salesforce, Oracle and other behemoths keep adding to their software suite, making them ubiquitous. In the meanwhile, we can see an increase in niche SaaS products. From image segmentation APIs to content sentiment analysis tools. The number of SaaS products we use at work keeps increasing.
Integrated suites have the advantage of an unified experience while specialized products take advantage of their expertise and can be laser focus on the problem they solve.
In my previous article (where is enterprise software heading), I discussed the evolutions in enterprise software as we have moved from ERP to a galaxy of SaaS products (also know as best of breed). This is an integrated suite vs best of breed debate we have now.
In a perfect world, we would be able to compose our own suite by making the different softwares work together. Unfortunately, we are not in a perfect world. Few months ago, a Microsoft sales contacted me to make us move from Slack to Microsoft Teams. I told him my experience with Skype Enterprise and Teams, from an external point of view, was a disaster. It was a hell to work with companies using those tools when you were on another suite (aka Google + Slack). He acknowledged it has not been strategic for Microsoft, but he assured the company started to work on more interoperability.
It might come from my desire to stay away from big corporations but I keep dreaming of a world where software collaboration could exist outside of big enterprise suites.
The number of specialized APIs is impressive. In my last count, I found about twenty companies providing an API for invoice PDF parsing, a good hundred of APIs to check the validity of an email address, and hundreds of companies/people enrichment tools.
Each of these APIs focuses on a single problem and addresses it well. But chances are you don't want to implement tens of different APIs to build an internal tool that would automate your accounting or your customer management. The question is: how can we bundle them to create our own suite?
Why workflow automation (Zapier, Integromat, etc.) is not the best solution?
The first wave of tools to address this problematic are called "workflow automation tools" and Zapier, Mulesoft, Integromat, etc. are in this category.
The idea is simple: APIs are "Apps". They have inputs and outputs. Something goes in, the app does its job, and something else goes out. The workflow automation tool ensures the data moves from one app to the next one. Apps can be chained to make complex workflows.
While this solves a lot of problems, it is not suited for everything. With workflow automation, the starting point is an event from an app (or a scheduled event) and the workflow will move the data from one app to another one. It acts as a plumbing pipe.
It connects APIs together more than creating a bundle of products. Here are some limitations:
- It is not possible to trigger manually an action for a specific data item. Imagine you have an existing item in your CRM and you want to run it though an automation workflow you have. It is not possible without manually adding a new source event in your workflow.
- Data moves as a whole between apps. It is not possible to transform the value for one property and then merge it back to the data object to be send to the next workflow app. You would need a data storage layer in between.
Connect Apps through a data hub
So how can we bundle APIs/Products together to create value? The answer is: through data. Instead of starting from app events like in workflow automation, the data must be at the center.
Businesses need a centralized data hub for data related to customers, suppliers, employees, etc. from which partial data can be send to external APIs to be processed. The results of this process then return to the data hub. It is about consolidating several APIs processes into a single data storage.
From this data hub, automations can be configured on data events like with workflow automation. When a new item (customer, invoice, etc.) is added to the data hub, actions run to process the new data and the result is saved for later use. But now, actions can be trigged manually directly from a data item. For example: send a mail to a customer.
Building with a data first approach opens the possibility of data standardisation. With workflow automation, every time you integrate an app (Application A) with another one (Application B), you need to define what properties from the data exposed by Application A will be used as input in Application B. Integration between two apps needs configuration. By starting from the data, it is not how one app integrates with another one, but how each app connects to the data. The data is the source for each integration.
If a data property is of type email, all APIs with an email input type can be automatically listed and shown.
Own your platform and use the power of external APIs
The combo Data hub + APIs is a powerful mix. It gives companies the flexibility to build a platform tailored for their needs without re-developing every feature.
Import leads in your data hub, and get access to a catalog of thousands of APIs to enrich them, validate their information, or send them to dedicated tools like a CRM so the Sales team starts a selling process.
At Datablist, we work to make this vision a reality 🚀. Join the beta (and get 30% off on launch!) or subscribe to the newsletter to know more 🤝.