Isn't it amazing how different kind of applications on our computer/mobile devices and the websites we visit communicate with each other? Have you ever wondered how this works? Welcome to the wonderful world of API, or Application Programing Interfaces.
APIs are tools or library that helps developers write code which interfaces with other software. For example, APIs allow tweetdeck to send tweets for you. Uber is a perfect example. It didn’t have to build its own mapping, payment, or communications services. Instead, Uber is a composite of various applications — Google Maps, Braintree (payment), Twilio (for mobile SMS), Oracle, etc. Uber was able to quickly connect to these systems using little pieces of code called APIs.
APIs are the reason behind most of the technological disruption in the consumer space right now — cloud-based infrastructure, mobile apps, Facebook logins, online commerce etc. APIs are secretly increasing connectivity and enabling extraordinary services, disrupting the way we interact with the world.
APIs in Business
The era of 90s was a disruptive time for traditional business models with everyone wanting a strong web presence. This was followed by the transformation from “brick-and-mortar” to online commerce. Today, APIs are the new imperatives for businesses. A company without APIs is akin to the Internet without the World Wide Web. It is true that companies like Uber, Airbnb, PayPal etc. were born in the digital age and were perceived to have competitive advantage because of access to information. But such opportunities for competitive advantage are now becoming available to all companies. The adoption of APIs is changing that the trend of using data only internally, opening new avenues for building advantage and pursuing growth. The arrival of API-management in companies such as Apigee, CATechnologies, IBM, 3Scale, and Intel has hastened this adoption. APIs represent the future of consumer and community engagement and its implications are much broader than the outdated Web-based business models.
APIs are allowing businesses to grow at a phenomenal pace by sharing services with external firms. Amazon CEO Jeff Bezos once famously said that all IT assets were to be exposed as APIs—a statement that created an IT architecture which propelled Amazon Web Services to unprecedented growth. Salesforce generates lots of revenues through its APIs. Twitter is said to process 13 billion transactions a day through its APIs.
Netflix’s massive growth was made possible mainly by their internal API, which handles over two billion requests a day. This internal Java API allows Netflix to quickly roll out new apps expanding to platforms like smartphones, X-box, smart TVs, and many other devices— significantly cutting down development time as only small components are essential for each device.
Netflix has disrupted the entire television industry through use of APIs. While open and public APIs are the future, Netflix is an example of the enormous value that’s generated from an API, even when used only between departments.
These are not one-off examples. APIs are a key growth driver for thousands of companies across various industry verticals. It’s not just for Silicon Valley dreamers anymore.
Why do you need APIs?
The most important use of API is providing a service that other people, whether business or individual, can use and pay for, as in the case of cloud services where you pay-as-you use.
Facebook is the best example. They would not have been able to scale their business growth without an API. Every time we see a login with a Facebook ID on a website, they’re using an API. Every time there’s a ‘Share’ button, there’s an API. Every time we use an application that imports our friends, they’re using APIs.
Facebook uses APIs to market their content and their presence they own their user’s identity. To own identity online means businesses must have the ability to be ubiquitous, and APIs can facilitate that.
Not only do APIs have business benefits, they also have several additional operational benefits. There are thousands of APIs available for developers of web and mobile applications to discover. There are APIs from leading companies like Facebook, Google, and Salesforce, etc. And at the same time, we have APIs from traditionally run sectors like government agencies, educational institutions, fintech firms, and retailers.
In the simplest terms, APIs streamline the application building process and also the business model, that is, integrating a business model with an API strategy allows businesses to focus on what matters most—their own product.
Tapping into developer communities
APIs are the bridge that connects a product or service to the ever-growing developer communities, allowing developers to find ground-breaking ways to integrate your features and services into social and mobile applications.
B2D, or “business to developer”, is a new form of marketing that has emerged primarily as a result of APIs. The Netflix API has since turned private and MailChimp suggests that the amount of API requests Netflix handles each day has quintupled to 80 million by the beginning of 2016. They also have a development fund worth 1 million dollars devoted to encourage developers to build using their API.
Businesses should not forget that the developer community has helped to uncover and enable these opportunities on the company’s behalf. All they’ve had to do is build and promote the APIs.
But the job is only half done. If you build APIs, developers won’t necessarily come to you. It’s very important to manage and nurture the community, providing developers the trust, assurance, and resources they need to successfully leverage your APIs.
Hackathons are the place to be
Hackathons are useful for launching your APIs. When your company is at the center of all the action, it becomes easy to reach out to your target audience in the same room for 24–48 hours, so you can build a meaningful relationship with each developer. If businesses are looking to make their name in a specific vertical, organizing a hackathon is a great way to do it.
SalesForce recently sponsored a FinTech hackathon in Tel Aviv organized by Bank Leumi, one of the largest banks in Israel. Salesforce was also showcasing their APIs during the event. The APIs were offering access to specific services and not only data. For example, trying to create a dummy CMS. Also, Salesforce was offering a platform that exposed a majority of their APIs. Everything happened through a visual platform. It simplified the APIs they were exposing and was a differentiator in the user experience. This was one of the reasons that many developers used SalesForce APIs a lot compared to the other APIs in the event.
Sponsoring a hackathon may not give you a meatier RoI. If you think whatever developers build over a few days will end up going the distance, think again. For me, the most beneficial thing that comes out of a hackathon is engagement with the developers. On top of that, businesses can talk to developers about their APIs and get honest feedback to make them better. A lot of companies make use of hackathons to release early versions of their API or a particular feature in their API to get the developer input.
The API economy is real
The rise of the API economy is real and happening. It’s not earmarked for only those big companies that were born on the web and naturally understand how to leverage technology for business advantage. The opportunity exists for businesses across all industry verticals to unlock their own growth potential.
With the rise of an app-only business and consumer culture, practically every developer is a target for your API and every application he/she creates is a channel to reach new customers. While there are challenges ahead, the API economy promises new opportunities to transform and reinvent the way business is done.