APIs are a path to new business opportunities

The demands of the digital business are set to change the composition of an organization’s application portfolio forever. We are moving into an API economy, where everything will be API based. This kind of economy presents new business opportunities which can significantly drive future application portfolios.

There are multiple business and technology drivers behind API adoption. For some organizations, APIs are a path to new business opportunities and to improve existing business processes like:

  • Driving new revenues by monetizing information
  • Developing new distribution channels and accessing new markets
  • Improving time-to-market for the launch of new applications by standardizing the way for developers to access the application and data sources
  • Efficient partner connectivity

For some organizations, APIs are meant for driving technology innovation by:

  • Integrating with mobile applications to drive productivity and enhance the user experience for their employees and / or consumers
  • Enabling easy access to best-of-breed technology solutions

APIs are not a new entity. On the contrary, they have been around for more than a decade now, with one of the initial implementations coming from eBay in as early as 2000. Organizations like Google, Twitter and Salesforce have been able to maximize the reach of business data and functionality through mature API models.

Some success stories

  • Walgreens made headlines in 2012 by releasing APIs for mobile developers to enable photo printing from smartphones and quickly followed this up with an API for prescription drugs
  • Twitter exposes various free APIs that are used by external developers to mine useful data for organizations
  • Facebook exposed various APIs for external developers that led to the creation of almost 9 million apps. This resulted in an increased traffic which translated into increased revenue for the company as well as external developers
  • Developers using Amazon’s advertising APIs get a fixed percentage of goods sold from referrals through their app
  • More than $7 billion in eBay transactions is processed through APIs

Need for API Management

However, as the number of APIs in an enterprise increases, concerns around life cycle management, security and scalability start surfacing. Organizations need to manage the life cycle, as well as establish policies around security and the usage of APIs. Many organizations have started adopting API management platforms to address some of the key capability needs, including:

  • Analytics

One of the most important benefits of having a well-drafted API management program is gaining valuable insights into API usage, such as

– Which of our APIs is being used the most?
– Which developers have developed these APIs?
– How can we use these developers more efficiently?

  • Basic protocol and message transformation

APIs were initially thought to be more of a reusable code library for internal consumption (to be consumed within an enterprise). The advent of RESTful APIs and the resultant ecosystem have modified this understanding. Protocol transformation is one of the key capabilities needed to expose business assets or services as APIs. For example, exposing SOAP-based business services through a RESTful API requires SOAP-to-REST transformation capability.

  • Security of API interfaces

Security concerns regarding appropriate and controlled usage of APIs increases with increased exposure and adoption of APIs. Applying the right security policy like User Authentication and Authorization is crucial to securing APIs.

  • Monetization of APIs

Monetization refers to revenue generation through exposed APIs. There are various monetization models that can be adopted as per requirements. For example, in a ‘Developer Pays’ model, the enterprise gets paid every time the specific API is used by the developer.

  • Caching capabilities

As a best practice, the caching of responses of heavily used APIs is critical for handling increased loads and providing optimal performance.

  • API catalog

As an organization’s API program grows, the issues of managing API interfaces as well as providing a single platform where a developer can search and explore APIs is crucial for speedy solution implementation.

  • Increased API adoption

A proper API management solution helps provide API support for developers and users. It also helps in keeping the user and developer community informed about API changes, the rating of APIs, dashboard capabilities, etc. These lead to better developer engagement, which in turn leads to better API adoption.

A well-thought-out API program will help an organization realize its business goals, ensure APIs are used in the right way and assist in preventing any compromises to the security of the organization’s data.

At ValueLabs, we provide end-to-end services for the entire API life cycle, enabling organizations to strategize, expose, manage and run API programs. We have experience in creating value in areas like product evaluation, proof of concepts, and building solutions accelerators with product vendors.

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