At a global level, the trend of software infusion in business heralds a new global business reality – the API Economy.
Very simply, APIs are the common language or communication protocol that entities use to “speak” with each other in software.
Having APIs at the core of your business strategies provides two main benefits:
- It allows you to restructure and organize internal systems to support innovative new projects in a uniform manner – reducing maintenance costs and increasing agility.
- It provides opportunities to create new, innovative ways to reach customers, generate revenue and build partnerships.
However, APIs aren’t exactly new.
In 2003, Amazon CEO, Jeff Bezos famously issued a stern warning to all of the company’s internal software teams that all single service and systems within the company had to be re-written in a well-documented API.
Could Bezos’ foresight that APIs were the way of the business-future be credited to Amazon’s continued success? Absolutely.
True digital leaders distinguish themselves by creating and maintaining stable, clear interfaces to their businesses. Leaders who do this are joining The API Economy.
So what exactly is The API Economy?
“The opening of APIs typically enables organizations to innovate more rapidly and provide uniform data and transaction interfaces to internal and external developers, partners and customers, for improved data access and transactions. Such organizations can also develop software applications to access these APIs to create new functionality and value both for themselves and the wider world. The resulting economy enables many new classes of applications with the potential to transofrm the way business is done.” – Winning in the API Economy
As part of of the API economy, organizations become platforms, providing their core value to customers and partners in the form that these entities need. Some great examples of companies who have opened themselves up as platforms are found across many different industries:
- NPR: NPR makes it easy for thousands of radio affiliates across the country to access and share content for their radio programs.
- PayPal: PayPal allows businesses to access their API to integrate their platform with PayPal in the way that makes sense to the business.
Over the past ten years, companies like these have caused the number of web APIs to skyrocket to over 14,000.
For business and developers alike, APIs are changing the way businesses buy and sell online. Before the dawn of the API economy, businesses had to wait to be able to integrate with other businesses until a partnership was established. Now, integrations are easier and streamlined, and time-to-market is light-years faster. The API Economy is revolutionizing the way businesses function today.