Business enterprises are moving towards a centralized ‘API economy’ at a rapid rate. It has been predicted that, by the end of 2018, more than 85% of all the large enterprises across the globe will set up their very own API programs*. The move towards enterprise APIs is fueled by a number of factors – with seamless information exchange and possibilities of better collaboration within organizations being right at the forefront. With growth of use of APIs in the corporate sector, the importance of efficient enterprise API management is also increasingly coming into focus. Over here, we will point out some of the most important points in that regard:
In-premise and on the cloud availability
Enterprise APIs need to be simultaneously available on-premise as well as on the cloud network. This enhances overall usability, since users are able to access additional resources (as and when required) without any problems. What’s more, switching over from the on-premise API model to the cloud API model also becomes easier. The key lies in ensuring that the enterprise API system can operate on both the platforms without requiring any modifications.
Thinking beyond ‘closed’ enterprise IT systems
Information is of the essence in the present economy, when a company offers products or services for sale. The traditional IT system in enterprises is focused more towards protecting and maintaining the internal information database only. APIs, on the other hand, give an option to create an ecosystem where transactions can take place. With application programming interfaces specifying protocols and online service standards, they are, not surprisingly, being adopted rapidly by web-based enterprises.
Selecting the right API tier
Enterprise API management is much more than creating a standard, ‘one-size-fits-all’ API, and then hoping that it would work like a charm for all companies (it won’t!). The onus is on business entrepreneurs to select the custom API tier and strategy, that would enable their firms to create more value internally, and deliver more value to customers and other stakeholders. Startups should ideally go for the Open API tier, which can provide them with large-scale business recognition and exposure. More established enterprises, on the other hand, can have a combination of a customer-only API tier (that has all important transaction data) and an internal API tier (with the proprietary, confidential internal information). Since Open APIs can be accessed and used by anyone, they can somewhat dilute the brand image of larger companies.
Need for API management at enterprise level
We are in the midst of a ‘mobile-first’ generation. Now, there exists a gap in the latest mobile interfaces used by customers, and the established backend systems in place at workplaces. Also, the rate at which enterprise backend systems can be modified is different to the one at which business apps and APIs evolve. To bridge this gap, there is a need of a smart enterprise API management layer, that would help to transfer the full value of backend systems to the mobile interfaces.
API-first model vs Backend-first model
In a service-oriented architecture (SOA) system, this is no longer a debate. It is almost mandatory for API providers to adopt an API-first design approach. In essence, this means creating a smooth, functional and powerful interface to start with, and then hooking it to the backend logic setup (the traditional approach puts more importance on the backend, and relegates APIs to almost an afterthought). The API-first approach works well on two fronts – firstly, API testing becomes a lot less complicated, and secondly, the API implementation process remains thoroughly defined and documented. A backend-first model muddles the very existence of enterprise APIs.
The biggest players with API programs
Think that use of APIs for businesses is a ‘new phenomenon’? Well, that’s not much more than a myth. From the early years of the millenium (2000s), leading online shopping portals like Amazon and eBay have been working with APIs. Coca Cola and Cisco are two other biggies that entered the API-driven growth strategy at a fairly early stage. By the turn of the decade, online entities like Google, Twitter and Facebook had all adopted enterprise level APIs.
Note: The main objective of enterprise APIs is to deliver competitive advantage to the company which has them, over its rivals (who don’t have API programs yet). A classic example of this is the Netflix vs Blockbuster tussle. The latter had a healthy lead in terms of value till the second half of 2008, when Netflix announced its API to revolutionize its core business. Since then, it pulled ahead of Blockbuster (which did not have an API). By 2010, Netflix was soaring while Blockbuster was hurtling towards its end (acquired by Dish Network in 2011).
Opening up to external ecosystems
Buyer behaviour is hard to predict. There also remains considerable uncertainty regarding demand fluctuations over time too. In order to deal with these, more and more companies are using APIs that open up their information systems to external ecosystems, comprising of third-party coders, mobile app developers, testers, analysts, and the like. As a result, all the necessary experiments and surveys can be conducted with the help of the information assets at the disposal of companies. The degree of third-party information access can be controlled too. Firms that open up their ecosystems with APIs typically share their revenue-streams with third-party developers.
Growing complexity IT operations in the corporate domain
Search all you want, but you are not likely to find any software developer or any other IT professional who would say that the architecture of computing systems in his/her company is growing simpler over time. More systems and technologies are getting added, more teams are being plugged in to the development cycle – and deadlines are, understandably, getting stretched. A business API, or more simply, a business interface, can tackle these problems with ease. It can also upgrade existing applications and systems (which might otherwise remain overlooked). Enterprise API management refers to the way in which owners interact with their business, to make it more efficient, clear and simpler. It is not just about programming for business.
API monitoring and assessment
Like any form of software, APIs can also fail. If persisted with, a buggy API can cause significant loss of revenue for businesses. That, in turn, brings to light the value of analysing the available API metrics on a regular basis, to track progress and assess results/outputs. By tracking the analytics/metrics of an enterprise API, two things can be monitored: a) the API itself is working as it is meant to (the technical perspective), and b) the API is indeed creating innovations and generating value internally and externally (the business perspective).
What do enterprises want from their APIs?
We have already highlighted the main needs for having an enterprise API management layer in place. Let us now turn our attentions on what actually the big enterprises are using their APIs for. In a Layer 7 survey, it was revealed that 72% of the respondents created APIs to bolster the performance of their in-house mobility systems. This was closely followed by the demand for better integrations with business partners via APIs (70%). Over 65% enterprises expressed their willingness to develop cloud-based APIs. Interestingly, around 55% of the respondents wished to create third-party app developer communities with APIs.**
Note: The demand for APIs by in-house developers for their own projects ( ~67%) trumps that for developing external developer ecosystems, however.
11. Types/Models of Enterprise APIs
Apart from the broad API tiers, a company needs to choose the correct enterprise API model for itself. They can either go with private APIs, which are accessible only by authorized partners and developers, or public APIs (open APIs, mainly opted for by startups). Regarding the revenue model, there is the option to select either a revenue-sharing model, or a flat one-time fee model, or the free model (which is followed by Google in most cases). On top of it all, there needs to be a stable, reliable API governance system in place.
12. It’s all about the ‘ilities’
An enterprise API needs to have certain properties, without which it would cease to be of any value to its parent company. The first of them would be ‘availability’, which refers to minimal downtimes and consistency across environments and platforms. Next up is ‘reliability’, which would make sure that any number of API calls can be handled, without performance being affected in any way. The third cog in the wheel is ‘scalability’, which deals with whether the API can be expanded in response to larger volumes of network requests. Finally, there is the need for ‘discoverability’, which means that all developers and users can access the API without any difficulty (herein lies the need for a stable central service repository).
Software engineers and mobile application developers agree on the importance of continuous API refactoring – in a bid to improve their user-experience levels over time. High-end security assurance is an absolute must-have in enterprise APIs, and while designing them, providers should implement systematic versioning. Companies need to build strong help and support communities for their APIs on social media channels too.
The success stories of big players like Google and Netflix after they started working with APIs are well-documented. What’s more noteworthy is that, more than 50% of all small businesses/startups will have their own mobile applications by 2017. In such a scenario, the adoption of enterprise APIs is only expected to rise further, and managing them will be crucial for realizing their potential value.
*, ** Resource: http://venturebeat.com/