Pillars of API Economy
Today, APIs play crucial role in opening up avenues to a myriad of technology platforms and products. Acting as a bridge, API creates a win-win situation for all stakeholders. There are numerous factors that underpin the API economy and a failure in delivering optimal performance might lead to the situation where ultimate business goal may have to be sacrificed. While customer experience, seamless access, and speed to market act as key drivers in the adoption of API ecosystem, easily available software development kits enables the API economy to thrive. An IT leader who is aware of the business value held by an API incorporates the growth enablers in their API strategy.
Designing API Strategy
Businesses can adopt numerous monetization strategies in accordance with their long term goals. By opening up gateways to their application, an enterprise can directly monetize their offering. Businesses can allow leveraging the core functionalities of an application through API and subsequent facilitation of a gamut of transactions. For example, IBM allows developers to harness its Watson platform through a plethora of APIs and charges them for every transaction. The case in point is IBM Watson Discovery API that allows developers in integrating the functionality of IBM Watson Discovery with other applications, and constructing queries for search, addition, normalization, and discovery of patterns in data. Enterprises can directly offer the complete suite of functionalities through the APIs and broaden their market reach.
Developers are first consumers of API and they become a part of business growth for the enterprises. Offering a treasure trove of data or processes for a wider market can easily happen through API. Revenues will be determined by the volume of data repository. More usage of APIs leads to revenue growth. Salesforce can be a classic example. The Customer Relationship Management behemoth garners sizeable percentage of its revenue from APIs. The approach nips in the bud the probable competition, which might arise due to offerings of proprietary nature. The new API market lets the existing players to join the bandwagon of the API economy. It also allows developers and companies to foray into new markets quickly instead of taking time consuming pathway that includes building a product from a scratch and zeroing in on prospects and market opportunities. With the advent of technologies like SaaS, big data, and
, the future is bright for the API economy.
Leveraging Right Technologies and Tools
The way forward
Businesses have the great responsibility to manage the business asset. Rather than creating APIs internally, the business prudence is in allowing third parties to build an array of APIs around the product. This approach leads to broadening of business avenues. There are options in the market that cater to the needs of the API market. WSO2 provides open source API manager that ascertains the performance of API. 3scale—another noteworthy name in the field of API management helps businesses, irrespective of their nature. The growth of API economy can be gauged from the fact that apigee—a platform for API analytics that went public—was acquired by Google and now holds market capitalization of $500 million.
In the long run, APIs are going to create new economy and markets that will be more open to developers. There will be a constant flux of opportunities but businesses need to perform SWOT analysis of their offerings prior to unleashing their arsenal.