|By Roberto Medrano
|June 16, 2014 11:00 AM EDT
It used to be that only application developers knew what APIs were, but things have changed to the point where there are entire conferences dedicated to APIs, websites track them, and people can make a living from doing API reviews. CEOs tout their own APIs in keynote speeches, and CMOs allocate budget to API development. The fact is, however, that what an API is and does hasn't changed. Functionally, APIs were created to expose data to, and across, applications. Originally based on SOAP/XML endpoints, they evolved into Web-based services that enabled ecommerce, data and communication transactions. Before long, it became clear that there isn't much one can do online unless it involved an API.
The Marketplace Is Fueled by APIs
So now here we are - the API Economy is not only upon us, but it's powering the global marketplace. It all makes sense - smart businesspeople recognized that in terms of cost, scale, and ROI, an API is the essential element with which to conduct any function on the Web that will drive users, customers and ultimately increase profits. One could say that an API is a channel-enabling machine.
This is all a result of the simple and elegant way in which APIs do their job. Keep in mind, when the first APIs were created to allow databases to deliver data to applications, the purpose was little more than transport. Get the data call, locate the data, lump it together, and then deliver it to a friendly application in a usable format. Now, however, the simplicity of the basic API design is such that data repositories don't need the same structure and organization that they once did. Rather, now it is enough to have data live somewhere in the organization, and make use of APIs to find, structure and communicate that data into a complementary application. The data can be pulled from a database, an LDAP server, or even another application.
A Conspiracy of the Insightful
API influencers are to thank for much of this, because the people who have given serious thought to how to leverage APIs have done a masterful job of adopting the right kind of standards and guidelines. Representational State Transfer (REST), for example, is commonly used as a way to abstract data from distributed applications and integrate them into something useful. Web services standards for security (WS-Security), communications (WS-ReliableMessaging), and structured information (SOAP) have allowed APIs to adhere to smart governance, while having the freedom to bear the heavy burden of data exchange.
Application Development Has Evolved
We also have evolution to thank for the proliferation of APIs and the recognition of what they do. The capabilities of APIs are layered, and beyond data transmission, they can support and assist in application integration irrespective of whether the apps live in the cloud, on mobile devices, as consumer services, or as massive on-premise enterprise instances. These different elements of API functionality continue to be uncovered and put to use as application needs grow. One might say that "necessity is the mother of APIs."
Businesses are beginning to realize how impactful a smart API strategy can be. It doesn't happen frequently, but we do see the occasional exec who mandates that data be the key, and that APIs be the conductors to getting that data to users anywhere and everywhere (mobile, cloud, social). These are the groups who will reach billions of users, rather than millions. These are the companies who won't bother themselves with channel agreements as much as they'll be interested in enabling ever-increasing numbers of channels through technology that is available to them.
APIs Provide a New Foundation for Business
This all lays the foundation for something very different for digital commerce and communication, and this is where smart executives are recognizing that their business strategy must be dependent upon, and make use of, APIs. Most businesses deal in content, commerce or communication, and those things are delivered in a wide range of software packaging. But ultimately, they all need a way to get in front of a user, and the mechanism to do that in the most leveraged and advantageous way is with APIs.
The API Economy is certainly about APIs, but it's also about response time and being opportunistic. Competitive businesses need to be able to react quickly and identify where they can capitalize on integrated approaches to connecting with, and among users. It's hard to believe, but it's still early - the potential is huge, but understanding how to think of APIs in parallel with business strategy is a killer combination.
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