How Open APIs Can Help With SOA ROI, Create Business Value

Loraine Lawson

Over the past four or five months, I've been on a bit of an open application programming interface (API) kick.


And, of course, I've written about it as I've went along, including posts on the integration potential of open APIs, the problems APIs can cause, and where open APIs fall short when it comes to integration.


So, the moral of the story is that the integration story with APIs is complex. Fine. But there's one area that I couldn't quite bring into focus until recently-and that's how APIs can help you make money.


IT Business Edge's Dennis Byron touched on this topic in October with his post, "Where's the Business in Enterprise Software APIs?" It's a good read, but ultimately, I left it feeling as if APIs were mostly for high-tech companies like Twitter, Microsoft or SAP.


In fact, it wasn't until I read this ebizQ piece by enterprise architect and consultant Dion Hinchcliffe that I really began to see how APIs could be used to help companies-you know, normal companies, not high-tech companies-make money.


Hinchcliffe explains that many companies are sitting on a lot of valuable business data that, as he puts it, is "lying fallow." Open APIs, he notes, offer a way to "unleash the business value of strategic sets of business data and directly turn them into rapidly proliferating new product partnerships and innovations."


What's more, as Hinchcliffe explains, open APIs could be the missing link in squeezing value from your investments in service-oriented architecture:

And given that open APIs are essentially a public SOA with a business model embedded in it, many organizations are often closer than they realize when it comes to making APIs a reality, at least technically. In fact, it's one of the few ways that SOA approaches can go from being an overhead cost to being a direct creator of new business value and is also part of the closely related discussion about Web-Oriented Architecture (WOA).

Like I said much earlier this year-if vendors can make money via the cloud, why not you? At the time, I was talking about WOA, but it seems to me APIs help fill in the blank about how to move from producing services to using services for business value.


By the way, Hinchcliffe addresses how APIs can provide business value. Essentially, they create another business channel, helping your business by:

  1. Building partnerships, through what he calls "asymmetric partnership scale," which is to say, you do the work to support a partnership once, and "then partners onboard themselves going forward using their own resources as often as they like for marginal additional cost to the provider"; and
  2. Creating direct growth in revenue and market shares, thanks to the reuse of APIs, not just by partners, but through third-party products and services.


Now for the really good news: Before this year, it was a hassle, both economically and technologically, to build an API infrastructure, but in the past year, a number of solutions have emerged to make this much easier. Hinchcliffe has spent the past year compiling a list of vendors offering tools to help you create an open API infrastructure.


I realize you may not be ready - or able - to invest in new solutions now, but it's definitely worth exploring, particularly since it could help you open up new revenue streams and bolster ROI in other investments, including SOA.

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Add Comment      Leave a comment on this blog post
Dec 9, 2009 1:52 PM Guillaume @3scale Guillaume @3scale  says:

Thank you Loraine for this great article on the business value of APIs !

I would like to leverage your article to present 3SCALE, a Sunnyvale-based company that is one of the leading provider of API Management solutions:

3SCALE enables Internet-based businesses with a secure, scalable and efficient SaaS platform to manage their APIs and reduce time-to-market.

Its on-demand infrastructure platform offers to its customers the following features:

- Access control and management (including contracting)

- Monitoring and Analytics

- Developer/partners whitelabel portal

- Billing and Payments management

Companies willing to explore the world of API and test our solution can get a FREE account at the following llink: http://www.3scale.net/signup/new


Guillaume Balas | VP Sales & Marketing Europe

3SCALE NETWORKS | Unleash the power of your API

mob: +34 619 824 976

email: guillaume@3scale.net

web: http://www.3scale.net

twitter: @guillaumebalas

Sep 5, 2012 10:40 PM Chris Haddad Chris Haddad  says:
API management is a strategic component within your Service Oriented Architecture initiative. Many development teams publish services, yet struggle to create a service architecture that is widely shared, re-used, and adopted across internal development teams. SOA governance programs often fall far short of encouraging consumer adoption, tracking service consumption, and illustrating business value. http://wso2.com/whitepapers/promoting-service-reuse-within-your-enterprise-and-maximizing-soa-success/ Reply

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