The APIs Have Landed

Cover Story

The APIs Have Landed

By Paula Bernier, Executive Editor, TMC  |  October 13, 2015

What It Means for Life as We Know It

API used to be a term reserved only for the most esoteric conversations at tech companies. Now everybody from Adidas to Campbell’s Soup is using APIs.

In fact, Forrester (News - Alert) Research calls the application programming interface the poster child of digital transformation.

“APIs are proliferating at enterprises making industry-leading investments in mobile, IoT, and big data,” Michael Yamnitsky wrote in a recent Forrester Research blog.

Gartner (News - Alert), meanwhile, believes that half of all business-to-business collaboration will take place through web APIs by 2017, and that by 2018 three-fourths of Fortune 1000 firms will offer public web APIs.

Indeed, the APIs have landed – and here’s how it all happened, and what it means for life as we know it.

First Contact

According to 3scale CEO Steve Willmott, eBay, Flickr, and Salesforce were among the companies that helped popularize the API.

For example, he says, eBay in the 2003-4 timeframe introduced APIs as a way for people to upload at once an array of products they wanted to sell. Similarly, Flickr early on began to open its service with APIs, which people could use to upload photos, he adds.

Salesforce was clearly also early to the API game. The CRM giant was able to use APIs as a way to incentivize other software companies to integrate with its SaaS offering by making it relatively easy to do so. It worked. Today Salesforce is recognized as having one of the strongest ecosystems in the software space.

So what exactly, you may be asking yourself, is an API? Well, that varies depending on who you’re talking to and the use case at hand.

Jakub Nesetril describes APIs as bridges that connect software together. They are needed, he says, because there’s a continuous trend of software decentralizing. Microsoft (News - Alert) Office is an example of that, he notes; a decade ago it was one piece of software, but today it encompasses Microsoft Office for Mac, for iPhone, integration into Facebook, Twitter, etc. – and all these things are enabled by APIs.

“Today, if you’re building software, you’re building APIs,” says Nesetril, the CEO of API development platform startup Apiary.

While some APIs are used within a company, others are like toll bridges, allowing software companies (like Salesforce, for instance) to make money off of them, he says. In fact, he adds, Twilio makes all of its revenue off of APIs.

This marks an evolution for APIs.

As Nesetril notes, five years ago APIs were thought of as a byproduct. But eventually APIs evolved into a product like any other product, and when you’re building a product you need to think about how people use it, so you do a little market research to address that user base, he says.

“APIs are now becoming a product within companies,” adds Samir Ghosh, CEO of WaveMaker, who attributes this development to the multidevice trend and standards like REST.

This change in thinking about APIs marks a maturing of the market, Nesetril notes, and is driving the creation of APIs that are more usable and drive more value.

Mind Meld

Today, companies in virtually every category of business are introducing APIs. But back in 2007, when 3scale was getting started, most people had never heard of an API, says Willmott, whose API management company now caters to 650 customers, including Adidas, Campbell’s Soup, Johnson Controls, and several other companies that are not in the tech space but that you’ve probably heard of.

Adidas is leveraging APIs in its Internet of Things initiative. Campbell’s Soup is using APIs to make its recipe builder tool, and its logos and other materials, available to partners that generate interest in its products. And Johnson Controls, which sells commercial lighting and heating and cooling solutions, is employing APIs to support a marketplace where customers and third-party developers can create applications that work with its smart building offerings.

Like Salesforce and Johnson Controls, a hot new unified communications company called Slack recently rolled out an API that other developers can use to build on top of, says Josiah Humphrey, co-founder and co-CEO of Appster. Everyone has a different strategy around APIs, but often it involves building ecosystems to add value to a product or service, notes Humphrey of Appster, which offers app development services, and can assist companies with the funding, marketing, and strategy around them. (For more on Slack, see the Rethinking Communications column in this issue.)

You can also rent a car with API, Willmott says. And a travel guide app or website could let you reserve a rental car so you don’t have to go to a car rental app for that – and that connection between the two entities is where the API comes in, Willmott adds. It enables such integrations without requiring the lengthy and expensive system integration that have typically been involved in this kind of thing.

APIs drive business in ways the app itself might have done, he says, but they can take things a step further by meeting customers where they are – whether that’s in another mobile app, on the web, or on a certain device.

To Infinity and Beyond

APIs have become so central to how some organizations do business that some companies now have VPs of APIs, says Nesetril.

As the importance and number of APIs grow, so does the need to build, ensure compliance for, and manage them. In fact, the rise of the API has led to the creation of an entirely new product category known as API management.

Accenture, Akana, Apigee, axway, CA Technologies, HP, IBM, Informatica, mashape, Mashery (an Intel (News - Alert) company), Microsoft, MuleSoft, Oracle, Tibco, Torry Harris, WaveMaker, WSO2 are among the lengthy list of players in this space.

“In the pre-API world, monetization was accomplished via long, drawn-out contractual processes, or data sharing agreements. In some instances, data was given away for free,” Tej Ravindra wrote in an Apigee blog in August. “APIs enable you to expose data and services securely, publish it to partners in a scalable manner, and, with a sophisticated API management platform, charge for usage, revenue-share with developers, and track billing in real time.”

With proper API management companies can have hackathons and better connect with partners and contractors outside the organization, Andi Mann, vice president of strategy at CA (News - Alert) Technologies, recently told TMC’s Rich Tehrani.

“IT has spent too much time as the department of no,” said Mann. “Now we want to enable businesses to run fast.”

Edited by Stefania Viscusi


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