Published May 31, 2024

API management vs. iPaaS



Long gone are the days when business computer systems were confined to a single location. Modern organizations have evolved, extending their networks beyond the confines of the physical office building and into the cloud. Cloud computing offers undeniable benefits—unrestricted accessibility, reduced hardware costs, easy scalability, and more. Of course, with this shift away from on-premises computing come certain challenges. One such issue involves integrations. Namely, how do you make sure that applications and data can operate seamlessly across multiple computing environments?

The answer lies in two key technologies: API management and Integration Platform as a Service (iPaaS). Both play vital roles in connecting systems and optimizing processes. Unfortunately, there are some misconceptions about the relationship between these solutions. Some decision-makers fail to see much difference between the two, believing that their organizations can get by just fine using one or the other. Nothing could be further from the truth; API management software and iPaaS each provide unique capabilities and cater to distinct user needs. More importantly, when used together, these technologies can significantly enhance business operations. 

Here, we explore API management, iPaaS, and how your business can benefit from both. But first, let’s lay down some definitions. 

What is an API?

API stands for Application Programming Interface. It functions as a set of rules and protocols that allows different software applications to communicate with each other. Think of it as a translator facilitating a conversation between individuals who speak different languages; it makes it possible for data and functionality to be exchanged between systems or software components despite their differences in format.

More specifically, APIs:

  • Allow businesses to integrate their applications with existing systems.
  • Support the creation of new functionalities by using existing services.
  • Improve the user experience through smooth data exchange and uncomplicated interactions.

API use cases

The term ‘API’ may not be as well known as some other computing terms, but that doesn’t mean it isn’t vitally important. On the contrary, APIs are used wherever connected digital technology can be found. In fact, it’s a safe bet that you have already interacted with several APIs today. From integrating payment gateways on e-commerce sites to sharing features in social media applications, APIs are the mortar that holds our digitally networked world together. 

Other common examples of APIs include:

  • Web applications: APIs allow web applications to retrieve and display data from various sources, such as weather updates, stock prices, or news feeds—all in real time.
  • Banking services: Banks use APIs so that customers can access their accounts, make transactions, and manage their finances through third-party apps and services.
  • Streaming services: Platforms like Netflix and Spotify depend on APIs to deliver content to users, track viewing or listening habits, and provide personalized recommendations.
  • Shipment tracking: API technology is central to modern logistics, making it possible to provide real-time tracking information for packages and enabling customers to monitor the status and location of their shipments.
  • Location services: Apps like Google Maps use APIs to access geographic data, provide navigation, and integrate location-based services into other applications.
  • Texting: Messaging apps and services need APIs to send and receive SMS or push notifications.
  • Automatic software upgrades: APIs enable software to check for and download updates automatically, ensuring that users always have the latest features and security patches.

This is by no means an exhaustive list. Simply put, wherever digital data is being exchanged, there is almost certainly an API making it happen. 

What is an iPaaS?

iPaaS is a category of cloud-based platforms that helps businesses connect different applications, data sources, and processes across various environments (whether they are in the cloud, on-premises, or a hybrid mix of both). An iPaaS provides software tools to help design, execute, and manage integration workflows without requiring detailed coding knowledge on the part of the user. This is the main goal of iPaaS—to empower organizations by giving them easy-to-use solutions for simplifying the integration process while ensuring that every connected system can communicate effectively.

The iPaaS accomplishes this by:

  • Automating data flows between different systems.
  • Enabling real-time data integration and processing.
  • Simplifying complex integration tasks with pre-built connectors and templates.
  • Providing a centralized platform for managing all integrations.

iPaaS use cases

While not nearly as widespread as APIs, there are still many examples of iPaaS in action. These include:

  • CRM and marketing automation: iPaaS platforms are often used to integrate Customer Relationship Management (CRM) systems with marketing automation platforms to synchronize customer data and allow for more targeted marketing campaigns.
  • Ecommerce and ERP: Using an iPaaS to connect an e-commerce platform with an Enterprise Resource Planning (ERP) system allows organizations to automate inventory management and order processing.
  • HR systems integration: An iPaaS may be used to link HR software with payroll and benefits systems to help keep employee information consistent and accurate throughout the company.
  • Data warehousing: Consolidating data from various sources into a centralized data warehouse through an iPaaS helps ensure precise reporting and analytics.
  • IoT integration: Internet of Things (IoT) devices represent an ever-growing network of different computing environments. iPaaS makes it possible for businesses to easily integrate IoT data with their own applications for monitoring and analytics.

What is API management?

As the name suggests, API management involves overseeing and controlling APIs to ensure they are secure, reliable, and scalable. It includes creating, publishing, monitoring, and maintaining APIs, making sure they perform as expected and meet any and all required standards and suggested best practices. For enterprise businesses, API management services are crucial because they ensure that every APIs is protected from security threats, is capable of handling increased network traffic, and provides a satisfactory user experience. An effective API management will likely also offer developer tools and resources for building, testing, and maintaining APIs. 

API management use cases

Businesses use API management because they need their APIs to operate smoothly and meet security standards. This technology also makes APIs easier to create and implement, ultimately supporting better integration and user experiences. 

Effective API management contributes to the seamless operation of various software systems within a company, enhancing overall productivity and efficiency. It does this by:

  • Enhancing security: API management helps protect APIs from unauthorized access and other potential threats. By implementing advanced security measures, businesses ensure that only authorized users can access their APIs, safeguarding sensitive data and systems.
  • Monitoring performance: By tracking API usage and performance, businesses can know whether their APIs are running efficiently. Monitoring helps identify any issues or bottlenecks as they occur, allowing for a quick resolution to maintain optimal performance.
  • Supporting developers: Resources for developing custom APIs are foundational to API management. This support enables developers to create high-quality APIs that meet their specific business needs.
  • Ensuring scalability: As businesses grow, so does the demand on their APIs. API management helps manage increased traffic without compromising performance. With the right API management platform, APIs can handle extreme usage levels, allowing companies to scale up their business operations without significant additional costs.

API management vs. iPaaS: different solutions to different needs

To summarize, API management and iPaaS both facilitate connectivity, but they cater to different needs within the integration ecosystem:

  • API management is about managing and securing an organization’s APIs: Specifically focused on governing and optimizing the APIs themselves, API management gives businesses more control over their APIs. It emphasizes the security, publication, monitoring, and analysis of APIs, allowing for a more tailored approach that prioritizes the organization’s goals while also promoting transparency and data safety. API management is generally geared towards API developers and external partners.
  • iPaaS is about connecting systems and automating processes: Where API management focuses on the APIs themselves, iPaaS takes a broader view of the systems and the workflows that rely on them. As metered, cloud-based services, these platforms provide user-friendly tools for integrating various applications, data, and processes across a range of computing environments. As such, iPaaS is mainly targeted towards businesses looking to automate workflows and integrate disparate systems. 

Two technologies, each with different target audiences, features, and use cases. Which option is best for enterprise businesses? In most cases, the answer is ‘both.’ 

API management and iPaaS work best when they work together

API management and iPaaS are valuable, essential tools on their own, but they provide their best results when used in support of one another. Combining these technologies enhances an organization’s digital ecosystem through a more comprehensive approach to integration and API strategy.

iPaaS simplifies the process of connecting different systems, no matter where they’re located. It streamlines data flow and automates business processes, making it easier for organizations to integrate their applications and data sources. By providing a centralized platform for managing integrations, iPaaS ensures that all systems can communicate effectively. API management complements iPaaS by providing a secure and efficient gateway for these integrated services. It makes APIs easy to access, use, and reuse across different applications. Together, iPaaS and API management create a powerful framework that supports seamless integration, enhances security, and improves overall efficiency within the company.

To put it another way, API management and iPaaS are great on their own, but they’re best when they’re together.

The strategic approach to data integration

Thanks to the power of cloud computing, today’s business networks have grown far beyond the physical office—necessitating the creation, management, and support of solutions designed to integrate functions and data across an extended digital infrastructure.

API management and iPaaS are two critical technologies that address these needs, and each solution caters to different priorities. API management is essential for controlling and optimizing APIs, while iPaaS provides the tools to connect systems and automate workflows. When used together, they create a comprehensive solution for enhancing your organization’s IT ecosystem. 

If you’re interested in maximizing your integration strategy, consider bringing together iPaaS and API management. Celigo, the leader in iPaaS solutions, can help make it happen. Our mission is to redefine integration by simplifying the way companies integrate, automate, and optimize all their processes. We have the expertise and technical understanding to provide you with the support and resources to seamlessly connect your systems, enhance data flow, improve efficiency, and ultimately grow your business. 

Contact us today to learn how we can help you achieve a fully integrated, secure, and scalable digital infrastructure. Because after all, when it comes to effective integration, Celigo knows that a comprehensive solution is worth more than any individual tool on its own.