As a Product Marketing Manager at Pandium, I’ve had the opportunity to work closely with SaaS companies that are tackling the complex problems and strategy around building integrations for their customers. One thing has become clear: these days, integrations are no longer a luxury—they're a necessity if you’re trying to make customers happy and close deals.
From listening to prospect calls to interviewing and collaborating with customers, I’ve seen firsthand how companies struggle to make the choice between building native integrations in-house and outsourcing their infrastructure to a third-party integration solution.
Related content: Download the report on product integrations at the SaaS 1000
Each has its pros and cons and considerations. In this article, I’ll share my insights on native versus third-party integrations, and how the choice to go with either strategy can impact SaaS businesses and their customers. I’ll also discuss key considerations for implementing them as part of your integration strategy, based on the experiences we’ve had at Pandium.
Integrations create a connected experience for B2B customers, but the way you go about offering them—either via native or third-party integrations—can make a huge difference in how your customers engage with your product.
When we work with customers at Pandium, they often come to use wanting what Native Integrations have to offer, with the speed that third-party build integrations offer. Native integrations are built directly between two software systems (usually, but not always, two APIs) and are designed by one or both of the companies involved. These integrations can leverage the full power of the APIs, offering deep customization and flexibility.
Native integrations are built directly between two software systems (usually, but not always, two APIs) and are designed by one or both of the companies involved. These integrations can leverage the full power of the APIs, offering deep customization and flexibility.
Native integrations would allow your development team to control the entire integration lifecycle, including development, design, implementation, support, and modification.
Because native integrations are built directly to each system’s API, and by at least one party who owns one of the APIs, they are able to achieve greater functionality, including leveraging all the potential actions of the API (like posting, getting, deleting, and updating data to each system). These integrations can be more customized and address a greater number of use cases that meet more of the end user’s objectives.
In addition, the user interface of the integration can be tailored within either system to provide for a better user installation and integration management experience.
While native integrations use one or both system’s APIs directly to power the integration, third-party integrations are those that can be created by third-party integration platforms (we'll be focusing on low-code or no-code varieties). These platforms would allow your technical team to leverage their pre-built API connectors to build integration.
These third-party integration tools standardize data flows between multiple applications using pre-built connectors that are often based on popular and recurring use cases seen across the businesses they work with.
Rather than providing direct API access, these platforms use an abstraction layer that handles authentication and offers predefined actions and endpoints. Users then interact with these actions through a visual workflow builder, allowing them to create integrations without needing to manage the underlying API connections.
Almost all embedded iPaaS's have visual workflow builders where a business user can set the flow of data between apps. They give a business user at a SaaS company the ability to specify the steps in a workflow, and when it should be executed, using a simplified UI or workflow builder.
Since third-party integration solutions have pre-built integration connectors, they'll allow your technical teams to implement new integrations to their product more quickly than if they were to build them themselves. Once a connector is built, the time to integrate one new application can go from many months to days.
The workflow builder UI offered by embedded iPaaS solutions means you can launch simple and moderately complex integrations faster without a developer.
Building integrations in-house from scratch is not only time consuming, but can also come with a high cost upfront in terms of developer hours. With a third-party integration solution, you’ll usually pay a monthly fee for the usage limit rather than a high upfront cost.
Third-party integration solutions can also be seen as a way to add MVP (minimum viable product) integration features quickly to your product and get feedback from customers without a significant upfront cost.
Building native integrations to a large number of systems takes a long time and a lot of developer hours. With an embeddediPaaS, your organization can offer integrations to hundreds or even thousands of systems fairly quickly with the use of pre-built connectors.
Embedded iPaaS solutions standardize data and use visual blocks that allow your team to manipulate it for building integrations. However, this standardization often means the full functionality of the APIs you're trying to integrate isn’t fully captured. Traditional no-code or low-code embedded iPaaS platforms do simplify API interactions, but limit your technical team to a predefined set of actions and connectors, which can make it harder to customize integrations to meet specific customer needs.
As the number of partner applications and use cases grows, iPaaS solutions can struggle to scale effectively, often prioritizing only the most common use cases rather than the unique functionality your team may require. If your team wants to make changes to integrations quickly, those changes must align with the platform’s existing framework.
When using a third-party solution to power integrations that are important to your product and customer experience, you inevitably become dependent on the provider. This includes technical dependency—whether the system is down or you need them to add new functionality to their connectors.
APIs and SaaS are updated faster than ever, and an integration connector can quickly become obsolete if the iPaaS doesn’t keep up with those updates.
For example, at Pandium, we had a customer (Justuno) join us after outsourcing their integrations to a no-code embedded iPaaS. After six months of working with the platform, their development came to a standstill, leaving them at the mercy of the iPaaS and unable to make crucial updates or add new integrations. When you're using a tool like this, you don’t own or control any of the underlying code for the connectors, so you can't go in an make changes yourself. If you decide to leave the platform, you would have to start building integrations from scratch.
From my experience researching the embedded iPaaS market, companies typically pay a monthly fee (on an annual contract) to use a third-party integration solution with added pricing that can be per API call, per run/execution, per record transacted, per volume of data synced or per deployment of an integration to a customer. Pricing can also vary based on the type of system being connected, the method of syncing data, or the frequency of data updates.
Navigating the pricing models of embedded iPaaS solutions can be complex, and unfortunately, many industry players' pricing models make it difficult to predict costs and are not transparent about what costs can become at scale, especially if that pricing is per API call, per run/execution, per record transacted, or per volume of data synced.
When integrations and product partnerships are central to your product roadmap and business goals, relying on a provider to scale can lead to high and unpredictable monthly costs if their pricing models don't align well your usage patterns. At Pandium, our opinion is that pricing per deployment of an integration to a customer is the fairest approach for our customers.
Native integrations give organizations the most control over their integrations including when data is exchanged, how it flows, and under what conditions. Native integrations provide the ability to set up workflows in the exact ways an organization’s customers need, and are only limited by the partner API.
If you're looking to scale your integration offerings and create a tech ecosystem around your product, the customization and agility native integrations provide are better suited to meet those goals. They offer a better partner and customer experience as they can keep pace with product changes.
When an integration is native, because it's built as a direct connection between apps and their APIs, you or your partner will have complete visibility into customer and data activity. This visibility increases confidence that all the data is updated according to its sync schedule or in real time.
When speaking to past customers that used low-code or no-code embedded iPaaS platforms to build third-party integrations, they mentioned lacking full visibility into data activity. With native integrations, you own and operate the integration, so you can have full access to the data logs to understand how it’s being used. You can even share this data with integration partner if you like or enable your partner to view it.
Integrations improve customer retention and satisfaction when they support use cases that B2B customers want, are easy to use, and are reliable. Integrations that offer rich functionality become essential to users’ business processes, and therefore make your product essential to their tech stack.
Integrations are a key strategy for SaaS companies to combat churn, but they only work if the user experience is strong at both launch and over time. With their agility and direct access to partner APIs, native integrations make it easier to deliver a consistent user experience.
Native integrations, along with the technology partnerships that come with them, open up more opportunities for customer acquisition. Being a “premier” partner often requires a high level of visibility, functionality, and technical setup that only native integrations can provide.
In addition, robust, highly-rated integrations can help close deals that otherwise would’ve been lost to competitors. In most SaaS categories, a solid integration with a keystone system in your customers' tech stack is a basic requirement to close many accounts. For some customers, this can be the deciding factor between choosing your SaaS product or a competitor's.
Customizing integrations in-house with no third-party support takes time and a lot of engineering resources. This can pull your technical teams away from other important projects related to your core product. To really succeed at scaling, you'll have to invest in having engineers to build, maintain, and update integrations, which also means potentially growing that team as our integration needs grow.
Managing authentication, like handling OAuth tokens or other credentials, is another big challenge when it comes to native integrations. Ensuring everything is secure while juggling authentication across multiple systems adds a layer of complexity, especially as the number of integrations increases. This will require dedicated resources on your team to make sure tokens are refreshed, securely stored, and integrated seamlessly.
The ability to customize and add functionality with native integrations does come at a cost—time. These integrations take longer to build, especially when youre trying to incorporate secure authentication and ensure both systems work together properly. As your organization grows and your customers need more integrations, it can be tough to keep up with the demand while still prioritizing core product development.
Pandium's founders we saw this “rock and a hard place” dilemma play out in their careers and with many of our current customers. That’s why they built Pandium.
Rather than forcing companies to choose between rigid low-code/no-code platforms or resource-intensive in-house builds, Pandium empowers development teams to build integrations locally while providing the infrastructure and connectors to handle authentication and other operational tasks. This makes integration launches and ongoing management smoother and more scalable.
By allowing developers to work in their preferred environments, Pandium simplifies integration development, freeing teams from the complexities of infrastructure management. Developers can focus on writing business logic and creating integrations that meet their unique customer needs, while Pandium handles the heavy lifting—like DevOps, token management, hosting, and real-time data syncing—leading to faster, scalable integration launches.
When thinking about your integration strategy, it’s crucial to understand where your product fits into your customers’ tech stack and how integrations impact the overall user experience. If your use cases are simple and static, an iPaaS with third-party integrations might be enough, particularly if engineering resources are limited. However, for products where integrations are core to the value—like workflow automation or customer data platforms—building and owning integrations in-house often provides greater control and flexibility.
That’s where Pandium comes in. We offer the best of both worlds: the customization and control of native integrations without the overwhelming resource demands of in-house development. Pandium enables you to scale integrations efficiently while maintaining the agility and innovation your customers expect—all without needing a large development team. If you’re serious about scaling and creating valuable partnerships with other SaaS products, schedule a time to talk with our team.
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