Turning APIs into a competitive advantage

Application Programming Interfaces (APIs), treated formerly just as a development technique or technical assets are gaining increasingly for business and operations.

APIs are a fundamental building block for making the Internet of Things work. They support the digital demands for Openness, Agility and Scalability. The use of APIs contributed visibly to the success stories of companies such as Instagram and Twitter. At Netflix, almost all API traffic is through services and devices.

APIs allow companies to leverage their existing information, resources and services across the organization as well as to the outside. Companies can add features and content to products and services. At times the APIs turn into own product offerings. Packaged application vendors and SAAS providers are increasingly publishing they sell as a Web API.

There are numerous advantages to companies to increase the use of APIs:

APIs encourage and facilitate the external developer community to engage with the company and enhance existing products & services. The ecosystem of the company becomes larger and valuable. It has a direct impact on revenues, market share and profits. APIs can help build competitive advantage.

APIs also enable companies to drive innovation from the inside out. The company can identify resources & assets to leverage and monetize those. IT departments find opportunity to develop their own products & services.

With the opportunities come also a number of challenges:

Security can be an issue when company information passes organizational boundaries. Often backend layers, formerly protected by firewalls, are less secure than frontend layers.  Technical debt in former software development implementations becomes painfully aware, creating security holes. Legal issues on liability pose risks.

Systematic API management is necessary to leverage the advantages and address mentioned risks.

A good approach is to build an API management platform to enable and manage three key functions: 1) Create and deploy APIs 2) Secure, monitor and optimize usage 3) Market, monetize and support assets.

There are a number of vendors and service providers that can effectively help in addressing the issues. Mashery, CA Technologies, Axway, MuleSoft and Apigee are listed in Gartner’s respective top quadrant.


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