An iPaaS (integration platform as a service) speeds up the process of building software integrations. The two types of iPaaS are enterprise iPaaS (sometimes called traditional iPaaS) and embedded iPaaS, but they are designed to solve fundamentally different issues.
Before we get into the details, let's look at two integration use cases:
- You have hundreds of customers in the service industry who use your SaaS app (an appointment manager) to drive their schedules. Each customer has its own billing and payroll systems. Your customers need your app to exchange data with those accounting systems.
- Your company intranet needs to display a combined calendar showing employee vacation/leave schedules for three different company offices. Each of those offices uses a separate calendar app.
We'll see which integration platform (embedded iPaaS or enterprise iPaaS) would be best for each of these, but let's first see why integration platforms have become so important.
Integration platforms are vital to increasing efficiency
Zylo's 2026 SaaS Management Index (drawn from a dataset of over 40 million SaaS licenses) found that the average organization now manages 305 SaaS applications. Other providers report different averages depending on the customer base their data is drawn from. For example, BetterCloud, which skews toward mid-market, reports a lower figure – but the direction is consistent: companies are using more apps than ever.
That kind of sprawl doesn't create a problem by itself; apps sitting side by side, unconnected, are just tools. The problem shows up in what has to happen between them. Every app that doesn't share data with the others can become a silo. And that requires someone to re-enter the same customer record in two systems, export a report from one tool to import into another, or check three dashboards to answer a question. Multiply that by N applications, and the workarounds become a structural tax on how the business runs.
That tax shows up as time, and the numbers back it up:
[O]n average, the cost of a switch is [a] little over two seconds, and the average user in the dataset toggled between different apps and websites nearly 1,200 times each day. That means that people in these jobs spent just under four hours a week reorienting themselves after toggling to a new application. Over the course of a year, that adds up to five working weeks, or 9% of their annual time at work.
The same dynamic plays out one level up the stack for B2B SaaS companies whose products contribute to that sprawl. Their customers expect the important apps to already talk to each other, and increasingly choose which tools to buy based on whether they will. A SaaS product that leaves customers to reconcile data with the rest of its stack manually is asking them to absorb the additional costs detailed above. And that's not right.
This is the efficiency case for integration platforms, whether the integrations run inside a company (enterprise iPaaS) or inside a product for that company's own customers (embedded iPaaS). These platforms replace ad hoc, manual bridging between systems with reliable integrations, so the time lost above doesn't become a permanent, immovable cost of doing business.
Why do businesses need iPaaS?
We could reduce the number of apps users need to switch between if the apps could share data. But building all those integrations from scratch requires a time investment that is off-putting to many companies.
That's where an iPaaS or an embedded iPaaS comes into play. Both platforms can significantly increase the efficiency of the integration-building process.
As more companies address their integration needs, the iPaaS market continues its rapid expansion. Gartner estimates the iPaaS market exceeded $9 billion in 2024, up from $7.8 billion in 2023 and $5.9 billion in 2022, and forecasts it will exceed $17 billion by 2028.
What about embedded iPaaS?
Since embedded iPaaS is a relatively new category, analysts such as Gartner still group embedded iPaaS products (and their revenue) under the iPaaS category.
Clearly, though, embedded iPaaS is a considerable part of the broader category's growth. We have seen the number of embedded iPaaS vendors increase from a handful several years ago to dozens today. As of this writing, G2 lists 52 of them.
At the same time, enterprise iPaaS vendors such as Tray and Workato (seeing the shift in the market) have extended their products into the embedded iPaaS space. We'll look into what those vendors have done later, but first, let's review enterprise iPaaS.
What is enterprise iPaaS?
Enterprise iPaaS is a solution that enables the development, deployment, and support of integrations within your company. This platform connects apps via integrations between internal business systems.
What is embedded iPaaS?
An embedded iPaaS, or embedded integration platform, is a set of tools that enables a SaaS company to quickly build reusable, configurable integrations to any app in any software category and deliver them to its customers as product features.
That's an accurate description of embedded iPaaS's original scope – but it's the 2020 version of the category. In 2026, an embedded iPaaS is best defined as the foundation for product extensibility: a platform that lets a B2B SaaS company ship productized integrations, build bespoke integrations as necessary for special cases, let its own customers create workflows inside the product, and give AI agents reliable, structured access to integrations and workflows – all native to the product itself. The section below on modern embedded iPaaS breaks down each of those four pieces.
Which platform is best for your integrations?
It comes down to whether you are building internal integrations (for your company) or external integrations (for your customers).
If you are solving for internal integrations and sharing data between systems within your company, then an iPaaS is the right tool.
An enterprise iPaaS is ideal for the use case we mentioned, where you need to combine several company calendars into a single calendar that appears on your company intranet. You would integrate data from multiple apps across your enterprise to benefit your employees.
But if you need to address the integration question for your customers, sharing data from your SaaS product with the other apps your customers use, you should use an embedded iPaaS.
An embedded iPaaS is perfect for the use case we mentioned, involving your appointment scheduling app and multiple service-industry customers. You would build these integrations to connect apps for your customers' benefit.
What about an enterprise iPaaS that has pivoted to embedded iPaaS?
As noted, the embedded iPaaS category didn't even exist until a few years ago. When the category was first defined, existing enterprise iPaaS vendors sought to capitalize on the emerging embedded iPaaS market. Tray and Workato (both with solutions designed to help users connect their apps for internal use) used those existing enterprise iPaaS solutions as the starting point for embedded iPaaS products.
However, it is clear that those vendors continue to focus on the enterprise iPaaS market and increasingly on how to leverage AI. As a result, while these vendors have embedded iPaaS products, they are not purpose-built for the embedded iPaaS market; rather, they are enterprise iPaaS solutions modified to include some features of proper embedded iPaaS solutions.
As of this writing, Tray has shifted to offering its embedded solution as an add-on to its standard enterprise iPaaS.
And you can check out our Workato page to see how that solution compares to an embedded iPaaS built specifically for B2B SaaS.
Why you should consider an embedded iPaaS for your SaaS app
A traditional iPaaS excels at integrating systems within the enterprise, but it's not the right tool for B2B SaaS integrations.
An embedded iPaaS is the only integration platform purpose-built to create and manage customer integrations at scale.
Some companies have tried to do customer integrations with an enterprise iPaaS, but that platform lacks a concept of customers. As a result, an enterprise iPaaS doesn't provide a way to efficiently build and deploy integrations for multiple customers (including customer-specific data management, multi-tenant hosting, etc.).
Low-code imposes needless limitations on B2B integrations
An enterprise iPaaS also tends to be a low-code/no-code environment. This works well for creating workflow automations between internal apps, but quickly reaches its limits with B2B SaaS apps. B2B SaaS companies often need to develop complex integrations that connect niche systems, and low-code/no-code just isn't built for that.
An embedded iPaaS includes low-code functionality and full development capabilities (including an API and code versioning in your existing dev ecosystem). This flexibility allows for low-code where it makes sense, but doesn't box you in when you need the flexibility that a code-native approach brings.
Reusability is critical for scaling B2B integrations
Finally, an enterprise iPaaS does not include tools for building reusable integrations or managing unique credentials and configurations for each customer.
An embedded iPaaS, on the other hand, is specifically designed to build and deploy integrations for your customers, including everything your teams need to manage and support each customer's integrations. An embedded iPaaS includes an integration marketplace where customers can view, select, and activate available integrations. They can also manage their configurations and perform first-level troubleshooting when problems arise.
For a comparison of embedded iPaaS tools, check out our post on the best embedded iPaaS.
The embedded iPaaS category has outgrown its original definition
Everything above accurately describes embedded iPaaS, but it reflects the category as it was defined around 2022, when analysts (including G2) first codified it. That definition included a narrow set of requirements: connect to third-party customer-facing apps, support white-labeling, provide pre-built connectors, offer an end-user marketplace and configuration experience, allow centralized monitoring across customers, run at scale – all on top of a low-code builder.
That was accurate in 2022. But it's insufficient today, for a few reasons:
- Software companies have developers. And it comes as no surprise that they increasingly want to build integrations the way they build their products (with version control, CI/CD, and their own IDEs), rather than using a low-code builder.
- AI agents changed build speed. A platform optimized for a great dev experience turns out to be exactly what an AI coding agent needs to work well, making code-native integration building accessible to far more of the team, not just senior engineers.
- The problems worth solving have grown beyond integrations themselves. Companies increasingly need to let their customers build and customize workflows directly within the product, rather than activate pre-built integrations. And, coupled with this, customers need AI agents to reliably take action across systems through structured, predictable tool calls.
What a modern embedded iPaaS actually covers
A modern embedded iPaaS is best understood as the foundation for product extensibility, of which productized integrations are one part:
- Productized integrations – pre-built, repeatable integrations shipped as a core feature of the product, with self-serve activation from a marketplace that's a part of your product.
- Bespoke integrations – built to cover specific business needs, usually for enterprise customers with unique (often custom) systems that they need to connect to your product.
- Embedded workflows – a workflow builder embedded directly inside the product itself, letting the software company's own customers build and customize their own automations, spanning both in-product behavior and third-party systems.
- Agent-ready infrastructure – a way for AI agents to act reliably across integrations and end-user-built workflows.
Connectors and a low-code builder are still part of the picture, but no longer define the category.
Why "fewer connectors" isn't automatically a weakness in embedded iPaaS
Much of the content evaluating embedded iPaaS platforms borrows its scoring criteria from a low-code, connector-catalog mental model: more pre-built connectors and a more powerful drag-and-drop builder are treated as straightforwardly better. That model makes sense for a buyer who wants to assemble simple, common integrations with no engineering involvement.
It breaks down for a different, equally real buyer: a software company whose customers need integrations to anything and everything (internal customer tools, niche vertical software, or APIs that no connector catalog will ever cover) built and maintained by the company's own engineers team, using their own CI/CD, version control, and IDEs, the same way they build the company's core product. Software companies are increasingly likely to serve customers in specific verticals with niche systems that will never justify a vendor creating a pre-built connector, no matter how large that vendor's library gets.
For that buyer, a large pre-built connector catalog is a ceiling, not a foundation, and it only covers what the vendor already anticipated. On the other hand, a platform designed around fast custom-connector development gives the engineering team full control over exactly what gets built, without waiting on a vendor's roadmap. Judging platforms in this category purely by connector count treats an intentional architectural choice as a gap. It's not. It's a different design philosophy solving a different problem. (We open-sourced our own connector library for this exact reason. See our Connectors Are the Commodity post for the details.)
Integration platforms help you do more with less
With businesses using more SaaS apps than ever before, data sharing between them is essential for effective business processes. Creating first-class integrations takes work, but integration platforms can significantly improve the efficiency of your integration-building process.
Be sure you are using the right platform for the job. Enterprise iPaaS is excellent for internal workflow automation within your organization. However, an embedded iPaaS provides the additional functionality necessary to build, deploy, and support integrations between your SaaS app and other apps your customers use – and Prismatic goes further still, extending that to embedded workflows and agent-ready infrastructure.
If an embedded iPaaS would support your use case, try our free trial and you'll see how Prismatic can supercharge your B2B SaaS integrations.
Common questions
Question: Does Prismatic have fewer connectors than other embedded iPaaS vendors?
Answer: Compared to platforms that lead with a large pre-built connector catalog, yes. That's a deliberate choice, not an oversight. Prismatic was built on the premise that software companies have developers who work in niche verticals that no connector catalog will ever fully cover, and who need to build custom, production-grade connectors and integrations with a great developer experience, not just pick from a fixed list.
Question: Is a bigger connector library better for an embedded iPaaS?
Answer: No. It matters less than it used to. Raw connector count tells you little about whether the specific connectors you need are deep, current, and well-maintained. AI coding assistants have also made it fast to generate a working connector on demand, which is turning large pre-built libraries into table stakes rather than a differentiator. See our full breakdown in our Connectors Are the Commodity post.
Question: Is embedded iPaaS still just connectors and a low-code builder?
Answer: That was the original 2022 definition of the category, and it accurately described the market at the time. It's an incomplete description of what software companies need today. A modern embedded iPaaS is the foundation for product extensibility: productized integrations, bespoke integrations, an embedded workflow builder that your own customers can use to build automations, and agent-ready infrastructure that AI agents can reliably use to take action across systems.
Question: What is a modern embedded iPaaS?
Answer: It's a platform that covers four things on one foundation: productized integrations (pre-built, repeatable, self-serve for end users), bespoke integrations (niche connections to uncommon or custom enterprise systems), embedded workflows (a builder inside the product itself, for the software company's own customers to build automations), and agent-ready infrastructure (structured, reliable tool access for AI agents across everything).
Question: Why does Prismatic focus on custom connectors instead of a large pre-built catalog?
Answer: Because the durable value in an embedded iPaaS was never the connector layer. It's what happens after a connector exists (deployment at scale, monitoring, versioning, etc.), and, increasingly, what else the platform does beyond integrations, like embedded workflow building and agent tool access. Prismatic open-sourced its entire connector library for this reason: connectors aren't the moat, nor even the differentiating layer, for a developer-first integration platform.
