Five Reasons a Business Needs APIs (and an API Driven Strategy)

    APIs have become one of the hot topics on the corporate IT agenda in recent months – both in terms of individual companies launching new APIs such as Jawbone and Honeywell and in the more general rise of the API economy. The boom is evident as ProgrammableWeb has reached the milestone of 10,000 APIs published.

    Despite this attention, however, it’s often hard to reconcile what is being written vs. what APIs actually deliver to the business. In other words – who is using APIs and what are they using them for? To help answer this, 3Scale, a leading API management solutions provider, has developed the top five reasons a business needs APIs.

    Five Reasons a Business Needs APIs (and an API Driven Strategy) - slide 1

    Click through for the top five reasons a business needs APIs, as identified by 3Scale.

    Five Reasons a Business Needs APIs (and an API Driven Strategy) - slide 2

    Mobile enablement

    As mobile applications have evolved, they now need to be available in multiple versions for multiple operating systems and devices — Android, iOS, Windows Phone, or even next-generation non-mobile devices such as Smart TVs. This places enormous strain on the development and maintenance process in a way that affects not only the various user interface components (the apps themselves), but also how data reaches the applications that are running and how data / transactions are sent back. Securing this “data channel” and keeping it uniform has become one of the most important uses of APIs and companies are increasingly designing APIs first for consistent data experiences and layer application builds on top to provide the specifics for each audience.

    Five Reasons a Business Needs APIs (and an API Driven Strategy) - slide 3

    Customer and partner ecosystem growth (becoming a platform)

    A key common challenge for organizations is to serve special needs that vary on a customer-by-customer basis – ideally, these should be delivered in such a way that customers can help themselves in setting up for special needs. In addition, it’s often the case that partner organizations can provide valuable complementary services to enhance an offering. However, in both of these cases, customers need the means to integrate software systems with the company they are doing business with. It is not surprising, then, that one of the most important uses of APIs is to provide the foundation for “becoming a platform”  – in other words, they provide exact integration points for customers, suppliers, distributors and integrators. Companies such as Evernote provide the means for many third-party integrations to enhance the user experience, eBay uses APIs as the foundation for a powerful partner ecosystem, and even less obviously technical companies such as Nike are clearly using APIs to enable a third-party ecosystem to emerge.

    Five Reasons a Business Needs APIs (and an API Driven Strategy) - slide 4

    Accelerating reach for transactions and content

    A third common use case of APIs is as an accelerator for content distribution and enabling transactions from a wide variety of sources. A special form of partner ecosystem, for media and content APIs, this means providing API access to content that partners, news readers, aggregators and mashup tools can automatically access and propel to new audiences. For eCommerce and, increasingly, brick and mortar retailers, APIs can enable purchase transactions via a much wider set of interfaces than a standard website would. An example aggregator in the media case is Flipboard, which pulls in content via API from a wide variety of sources — having an accessible API is table stakes to being accessible to the Flipboard audience. On the eCommerce side, companies such as Walgreens now have APIs that enable prescription filling and submission of photos for printing – enabling third-party developers to embed such features wherever and whenever it is convenient for the user.

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    Powering new business models

    Pure-play API companies such as Twilio and Sendgrid have shown APIs can in fact be products in their own right – becoming the core offering for the company or a large business unit. While this does not apply to all companies, enabling and delivering a valuable service to third-party developers and partners has clear revenue potential. Furthermore, if successful, this strategy has the potential to become an element of core infrastructure for its users and hence create a strong, loyal following of partners, savvy developers experienced in the APIs, and an ecosystem of third-party tools.

    Five Reasons a Business Needs APIs (and an API Driven Strategy) - slide 6

    Driving Internal Innovation

    Last but not least, large companies continuously need to innovate – creating new internal and customer-facing systems. APIs offer the key to providing the agility needed to do this – Jeff Bezos famously enforced all software in the company to interact only via APIs from 2004 onwards, and this move is widely credited as key to Amazon’s ability to later enter disparate new businesses such as AWS computing services. APIs are key in providing packaged, accessible interfaces to systems all across an organization and reducing the friction in creating new, cross-organizational systems.

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