Today, APIs are the driving force of digital business, capable of generating considerable revenues continually. For this reason the term API economy has been coined to describe this new economic model. The adoption of APIs in a structured and standardized way not only makes you optimize company ICT times and methods, but allows you to create a catalog of products, the APIs, to be proposed to external buyers and partners.
APIs have a very high commercial value and need to be managed like a real product.
The volume of APIs consumed annually is not an immediately obtainable number, but we can realize the extent of the phenomenon thinking that already in 2015 the revenues generated through the APIs were 50% for Salesforce, 60% for eBay and an astonishing 90% for Expedia.
But what are APIs? The APIs, born as simple software components to allow communication among multiple applications, have now become more or less complex systems of software services managed in the cloud and offered on a pay-as-you-go basis. You can use APIs internally to develop new services or you can propose them with different commercial formulas (e.g. by subscription) to a small group of partner companies or to the public. This API monetization model is called AaaP, that is API as a Product.
APIs as part of the strategic vision
Amazon is often indicated as the first mover towards APIs, because in 2002 Jeff Bezos asked his development team to renovate communication among data according to an Application Programming Interface model. The renovation also aimed to sell APIs as independent products.
A frequently mentioned example in literature concerns the application of the API as a Product model in the case of car sharing platforms, which use the APIs of a number of partner companies to offer a complete experience. For example, the Google Maps APIs can be used for navigation, as well as different providers (Satispay, PayPal, Mastercard, Stripe, etc.) can be easily integrated for payment like in the Payment Integration Hub, or geolocation can be used to offer the user the services available in the area to build a Mobility as a Service Platform, etc.
Another virtuous example concerns one of the most successful e-commerce operations in Brazil, Magazine Luiza. The online shop decoupled the backend systems from the frontend and simplified the development of apps and services aimed at users, taking advantage of the APIs. The result is impressive: the 50,000-item e-commerce now manages a global online marketplace with over 4 million references, entirely via APIs.
To be successful, APIs don’t necessarily have to be made fully available to the public. A much-cited example is Netflix: the streaming service provider’s API strategy moved from a public API strategy to a purely partner-oriented one in 2014, without affecting its growth opportunities.
The API as a Product paradigm and the Developer Portal as a sharing and governance tool
For security and strategic reasons, a part of software, data and processes must remain within the company, or at most of the supply chain. APIs provide the ability to access valuable assets that can be externally exposed securely and in a standardized way, generating added value from legacy business applications.
Using a Developer Portal, you can realize your API as a Product strategy, making the most of this asset. The Developer Portal is a complete access point to your API catalog, which contains the live and testable documentation of the APIs and allows you to standardize the methods of use.
Furthermore, thanks to low-code and no-code approaches, APIs can also be developed by people who speak the language of business and do not have advanced computer skills, greatly expanding the range of APIs and increasing adherence to the business.
The issue of governance is not ignored: as the volume of APIs and connected services grows, complexity increases. For this reason, a platform approach is essential, since an API Platform guarantees centralized governance, with maximum visibility over the entire ecosystem.
Start from safety
In software development security is central, and it cannot be ignored when it comes to APIs.
Let’s take the USPS case for example. In 2018, the US Postal Service inadvertently gave access to sensitive information of 60 million people to any user with a browser and some basic computer knowledge. The damage was directly attributed to an excessive ease in the use of wildcards for searches shown by a specific API.
This example clearly demonstrates that APIs, which by their nature constitute a potential access point to information, cannot be exempted from adopting a specific API security strategy.
APIs are a modern approach to long-lasting information systems. However, API development doesn’t have to be limited to a simple catalog. In order to give the best results, this activity must be based on a Developer Portal with robust architecture and complete services.
The Developer Portal is the essential enterprise tool to increase business opportunities and accelerate your and your partners’ innovation.