We live in an API economy today. Businesses can leverage this powerful environment to transform their organizations and monetize core assets, services and products. An Application Programming Interface (API) is a customer interface for technology products that allows software components to communicate. When leveraged efficiently, it can positively and dramatically affect an organization’s profitability.
APIs enable integration and connections between people, locations, systems and algorithms. They can be used to create dynamic user experiences, share data, allow transactions and leverage third-party algorithms. They can also be used to create new products or services as well as business models. The API economy also facilitates the process of turning a business or organization into a platform, connecting different users and enabling the exchange of goods and services to create value.
How does the API economy impact businesses?
APIs are the new imperative for business. They represent the future of customer and community engagement, and have a much greater impact and wider implication than traditional web-based business models.
APIs act as a:
- Primary customer interface for technology-driven products and services
- Key channel for driving revenue and brand engagement
For instance, Uber is a good example of a business built on a platform since it uses an API to access Google Maps to facilitate its business model of bringing together drivers who own a vehicle and passengers who need a ride.
The rise of the API economy
Social networking, e-commerce, and social content along with a wide range of targeted end-user applications have fueled the emergence of the API economy. The universal use of mobile devices has created new methods of doing business.
Since APIs connect products and services with user communities via social and mobile applications, they have revolutionized the marketplace. Businesses now have access to huge communities of end-users who can be easily converted into customers.
How can you leverage APIs to impact the bottom line?
However, to make a measurable impact, businesses must define a successful API strategy with some of the same elements as a traditional product strategy such as quality assurance, governance, and discoverability by end consumers.
APIs have proven time and again that they can be important growth drivers for a wide range of companies across different industry sectors. For instance, more than half of Salesforce’s revenue is generated through APIs while Amazon has crossed a trillion transactions.
Managing the stages of an API lifecycle
Despite the multitude of benefits that businesses stand to gain, APIs must be created, run, managed and secured across their lifecycle to be of value to an organization. Businesses must address every stage of the lifecycle in a methodical fashion to ensure a successful outcome. To enable such an approach, organizations can leverage comprehensive management solutions such as IBM API Connect to address all stages of the API lifecycle.
API Connect offers advanced capabilities such as:
- An end-to-end integrated experience across the API lifecycle to cut costs and streamline app development
- Automated API creation and discovery to accelerate time to market
- Self-service access to APIs as well as security and governance controls
- Unified management and administration for multiple development languages and frameworks
- Hybrid cloud licensing for platform flexibility and lower cost of ownership
As the world grows more connected through social networks and mobile devices, businesses can reach new communities of users with every application they create. An effective API management strategy is the key to enabling business transformation and growth.
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