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Webhooks are a very interesting topic, but they are often misunderstood by both technical and non-technical people alike. The reason they are misunderstood is often because depending on who you ask or what system you are looking at, each often has their own slight variance on what they actually are and how they are used.

I often head phrases such as “a Webhook is just an API isn’t it?” Well, no, not quite. And “Why do we need Webhooks when we can just poll a system for changes?” Webhooks are a complex topic to understand well, but fundamentally they are actually really basic things.

A Webhook is simply a term used for when something happens in a Source System that it will send a notification or data to a Destination System. Conceptually, there is nothing much more to it than that.


Sounds simple when you put it like this, right? Well, yes, and it is that simple at least at the conceptual level. As always, the devil is in the detail. Webhooks are commonly described as user-defined callbacks.

As you can see in the above diagram, whenever either a User or a Background Process / System Event happens, this means that the Source System sends a notification or data to a destination system. But how you may be thinking. Well, we’ll come onto that in a little while. For now, just keep this basic concept in your mind for what Webhooks are.


When Should I Look at Webhooks?

There are many reasons you want to look at Webhooks and this type of technology, often it is when you want to something to happen in one system off the back of something happening in another system.

For example, some common use cases of Webhook technology is when a customer on an ecommerce website makes a purchase using a payment gateway. When this happens, the payment gateway needs to inform your website that the payment was either successful or it failed as you want to make sure the customer has paid before you go sending the goods out to them. Or another common use case is when you have a master system of record for certain types of data and you want to ensure this data is replicated in another system which is quite common in enterprise organizations to ensure a user doesn’t have to log in to 10x different systems to do their day job.

You may also want to start to look at Webhook technology when you are integrating systems together or you may have a legacy integration in place with either CSV files flying around and/or what I like to call Nagging Integrations, whereby System A will continually poll System B asking if there has been any changes that it needs to be aware of. These types of integrations are extremely inefficient, particularly if data only changes say once per hour and your integration is asking if anything has changed once per minute. These types of integrations are wasteful.


As you can see above, there is a lot of waste with Nagging Integrations which poll a system on a regular frequency. All of this needless additional load can result in your applications being less performant and require more infrastructure resource to power because of this inefficiency which can have a cost implication.


Why Webhooks are Awesome

Many legacy integrations are simply either too slow, too dumb or a mixture of both. This is why Webhook technologies are so awesome. Webhooks are real time data and notification transfers to get data moving throughout an organization to where it needs to be. That means, no more batch jobs or overnight data loads slowing an organization down.

With technology first systems, you will often find that Webhook technologies come out of the box and are configurable to what you need so you can design your data flows efficiently throughout your enterprise organization. The reality is though, many systems aren’t built in this modern way to enable this capability, so don’t expect everything to support this type of technology.

I should also clarify, that Webhooks are a concept, it’s not something you can purchase and plug in to your existing systems as they need to be built into systems from the core. We’ll come on to this bit a little later in this blog post.


Who Uses Webhooks?

I’ve already mentioned a few example earlier around some common use cases for Webhooks being either ecommerce and payment gateway related, or getting data moving around an enterprise organization in real time. You’ll find that a lot of SaaS (Software-as-a-Service) companies will have some form of Webhook technology baked into them.

In some cases, there are even entire business models and SaaS companies that have been built to piggy back off this technology. Companies such as IFTTT (If This Then That) and Zapier have a suite of tools in their systems which are powered through Webhook technologies under the hood to get notifications and data moving to where it should be.


Where Can I Use Webhooks?

As for where you can use Webhooks, well, this all depends on the software and systems that you are working with. In my experience, the majority of historical legacy system simply won’t have any kind of Webhook type technology to use for integrations. You’ll often be lucky if they have APIs available in some way or another.

You tend to find that Webhook technology will sit in the bit companies, the SaaS tech first companies. The bigger the company you tend to find that the Webhook technology is more configurable within their system whereas some systems only have basic levels of customization in place.

It all depends on your use case. When you want to look at getting data moving from one system to another, Webhooks are often the first choice due to how efficient they are. So do your research on the systems you are using to understand their capabilities.

If you look at modern SaaS applications that technology first organisations use on a daily basis, all of these come with Webhook technology built in;

  • Stripe
  • Paypal
  • GitHub
  • Jira
  • Salesforce
  • Microsoft Business Central (aka. Microsoft Navision in older terminology)
  • SAP
  • Microsoft Teams

To name just a very small handful examples that you are probably familiar with. What is interesting to note is that even between the above systems there are often slight differences in terminology and capabilities depending on your individual use case.


How do Webhooks Work?

So now, onto the good bit for how Webhooks work. All of the above has been explained on a fairly high level of what Webhooks are and how they work. Now, we’re going to take a deeper dive into Webhooks so it’s clear how they work as they are no-where near as simple under the hood.

To help keep this bit as simple as possible, let’s break this down into a couple of core sections;

  • Source System
  • Destination System

Fundamentally Webhook technology uses the Publish-Subscribe architectural design pattern, whereby one system publishes something and another system(s) then subscribe to that event so they get notified when something happens that they care about.

Google actually created PubSubHubbub (Best name ever for a platform!) quite a few years ago with the aim to synchronize content from many different RSS feeds into a handy platform for content. It never really took off unfortunately, likely due to the demise in the use of RSS feeds generally as social media platforms pretty much got the attention of users. So Google open-sourced their implementation of the concept Webhook technology in 2017 which is called WebSub and designed it as a protocol for communication as a way to standardize how these things work.

What is important to note though, Webhooks are a concept of sending data from one system to another in a real time and even driven way. PubSubHubbub and WebSub are just one implementation of this, and in my experience, most software vendors create their own implementations of Webhook technology based on the specific details of what they want to achieve and how they want to go about doing it. In practice, there is no one size fits all so companies often build these things how they see fit, some of which are configurable and others aren’t etc.

To extend the original diagram from earlier, this is more like what a Webhook really is when you look at it end to end;


Source System Webhooks

Ultimately a source system is just a bunch of code under the hood that teams of software engineers have been crafting for many years to build the product that you see and use today. Fundamentally these systems have a core data model behind the scenes too. To keep things simple as an example, imagine the source system stores basic data about a company in different related data objects;

  • Company
  • Company Stores
  • Company Contacts

The next step is to ensure the system is coded in a way that can ensure that when data changes for these different data objects that an event is captured, aka. published, which can then be subscribed to by another system.

Depending on the system in use, this may be a hard coded approach to sending data to another system and this can be absolutely fine in many scenarios despite the negative connotations with the word hard coded. In more advanced technology first SaaS platforms, this kind of thing generally has a user interface designed to allow a user of the system to configure what they want to do and when etc. These two different approaches involve vastly different amounts of effort to build, so in many cases this is an evolution of time to get the system more configurable and less hard coded, but this is all dependent on use cases.

Then when it comes to the implementation, there are additional nuances to consider. Do we queue the messages, or do we send and forget in real time? What about retries if a message doesn’t get through, do we care if something fails or do we implement a FIFO (First In First Out) message queue to ensure we have the visibility that something has been successfully sent etc.

What about logging, when things go wrong we need to understand why etc. Even with some of the big players mentioned earlier, not all of these concepts are built into their systems yet that can be accessed by a user.

What about the order of execution, is that important? Well, yes in a lot of cases it is to ensure that the updates are processed in the correct manner and the latest update is an accurate reflection of the state of the data. In other cases, the order of execution may not be important at all as it is a simple notification that something happened and when you click through to see the details that has the most up to date information. All of these things need to be considered.


Destination System Webhooks

This is the part that is often forgotten when it comes to Webhook technologies. Just because a Source System can send out a message to a Destination System this isn’t the end of it. What does the Destination System do with the message? Does it even understand the message? This is where things can get complex.

Fundamentally a Webhook is essentially built up of the basic building blocks;

  • URL – Where the message should be sent
  • Payload – What the message is, usually sent in JSON

Then it is up to the Destination System what to do with this message. And this is where the other half of the complexities lie. This is what is generally referred to as a Webhook Listener. There is no real difference between this terminology and that of a standard API which is basically doing the same thing when data is sent into it using a POST Request.

What the Destination System chooses to do with this message is up to itself. What HTTP Status Code should be sent?

  • 200 OK
  • 400 Bad Request (aka. I’ve no idea how to interpret your message)
  • 401 Unauthorized (aka. you are not authenticated so you cannot access the system)
  • 403 Forbidden (aka. you are authenticated but you don’t have permissions to do what you are trying to do)

Ultimately how the Destination System behaves determines if the Source System is happy that the message has got through or not.



Overall, I’m sure you can see that while Webhooks seem fairly straight forward conceptually, when you get under the hood they can be extremely complex beasts. This complexity from many of the big SaaS providers is often abstracted through the use of marketplaces and plugins where apps or connectors or whatever they like to call them do the translation between the systems to ensure the right message gets through when it should. And likewise there are often user configurable features within modern systems that allow you to easily add/edit/remove configured Webhooks to suit your needs at that point in time. Some systems are more/less configurable than others, so keep this in mind.

Webhook technologies are seriously powerful tools when implemented well. The reality is that they are difficult to build when you are designing a platform that requires this technology embedded into it. As a user of Webhook technologies, you’ll find this technology extremely beneficial in a wide range of use cases. As a software engineer involved with designing and building the system architecture for Webhook technologies, well, this needs a lot of thought to get right and to continually evolve to meet the ever growing expectations from users.

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Michael Cropper

Founder & Managing Director at Contrado Digital Ltd
Michael has been running Contrado Digital for over 10 years and has over 15 years experience working across the full range of disciplines including IT, Tech, Software Development, Digital Marketing, Analytics, SaaS, Startups, Organisational and Systems Thinking, DevOps, Project Management, Multi-Cloud, Digital and Technology Innovation and always with a business and commercial focus. He has a wealth of experience working with national and multi-national brands in a wide range of industries, across a wide range of specialisms, helping them achieve awesome results. Digital transformation, performance and collaboration are at the heart of everything Michael does.