Unlocking the business value of APIs

Jan 23, 2017

IT
automotive
chemicals
discrete manufacturing

Although application programming interfaces (APIs) are often primarily referred to as a means to fulfill technical requirements, they actually represent much more. Their ability to allow software programs to interact with each other, to exchange information and to request online services makes them one of the key drivers for creating digital ecosystems. Are APIs new? No, they aren’t. There have long been web services that do what APIs do today. But APIs do it better – at a more granular level and in a more effective way.

Welcome to the networked economy

So why all the fuss about APIs? Well, it’s because organizations increasingly need to develop new business models, and their success increasingly depends on co-creation, speed and agility. Rather than revolving around products, today’s world is about creating an ecosystem that attracts as many users as possible to your services. At the same time, those ecosystems must meet customers’ growing need for more interaction with the companies they are dealing with. Companies such as Facebook, Apple and Google are illustrious success stories in this domain. Apple is no longer a computer company; it has built an ecosystem that seduces customers to opt into as many services as possible. When you buy a smartphone, the odds are split fairly evenly between choosing an iPhone or an Android phone. But once you have an iPhone, the probability that you will buy an iPad instead of an Android tablet increases dramatically (and vice versa).

Making interaction easy

To build such an ecosystem, APIs have become a must. In a way, they are the language facilitating interaction and communication within a network. They allow you to make functionalities accessible to others and to open up your network to external partners. So if you’re developing an app and want to allow your users to log in via their Facebook account, you simply include Facebook’s API for logging in. Some APIs are free, while others aren’t. And that is just another smart trick companies use to extend their ecosystem: they give away free APIs that work very well, and once users are hooked they’re likely to switch to a subscription based model to access more powerful functionality.

In short

So, in short, APIs make a real difference when it comes to creating ecosystems and gaining more agility and speed to be able to grasp new opportunities. They enable partnerships to be built more quickly and easily, which is a huge bonus for many large organizations who are struggling to scale up their existing integration architecture in order to play a role in the networked economy.

Central management platform

However, as platforms and ecosystems expand, the challenge will lie in managing and securing a multitude of APIs. Enter cloud platforms for API management. They make it easy for you to give external developers access to your APIs. They constitute a central gateway that runs in the cloud enabling you to securely store, publish and analyze APIs. An intermediate layer of this kind benefits your external partners and your own organization alike. Your partners are shielded from all the backend complexity, while within your own organization you have monitoring and analysis capabilities within a single platform. Furthermore, by publishing your APIs on an API management platform, you take advantage of its built-in security measures, thus reducing the risk of, for example, your ERP system going down in case of a cyberattack.

So are APIs hot?

That depends on what industry you are in. If your business is evolving quickly and if developing a services-oriented ecosystem is the way forward to stay competitive, APIs and an API management platform will give your organization extra speed and agility. It’s time for IT and the business to get together and map out a path for the organization’s future growth!

Author: Frederik-Jan Roose. You can follow Frederik-Jan on Twitter or connect with him on LinkedIn.