The API Economy Delivers Limitless Possibilities

This is the conclusion of our series What Are APIs and How Do They Work?

Making certain functionality--be it the results of a database query or interactive functionality like a map--available via API dramatically changes the way that software technology and information can be delivered to the market. In the 1990s, for example, an organization that wanted to run a customer relationship management (CRM) system had to lay out huge expenditures on software, hardware, CRM specialists and training. But, using the power of the cloud, CRM providers like Salesforce.com completely disrupted that model. Instead of the traditional, expensive approach--whereby a CRM vendor sprinkles hundreds or thousands of stand-alone installations across all of its customers--Salesforce.com essentially has one installation connected to the Internet that all of its customers share. This idea of sharing a common infrastructure across your customers is called multi-tenancy. 

At first, the customers of Salesforce.com used their Web browsers to access and share the CRM provider’s common infrastructure. But it wasn’t long before those customers were granted API-level access to Salesforce.com’s functionality. This enabled customers to incorporate key pieces of the CRM system’s functionality--for example, the ability to look up a customer’s history--directly into other applications. Salesforce has reported that more than 60% of all the transactions with its application tier are API-driven transactions. In other words, more than 60% of the transactions that traditionally would have happened through Salesforce.com’s browser-based user interface are instead happening in the context of non-Salesforce applications that take advantage of the data or functionality in Salesforce.com by way of API. 

For Salesforce, the implications of this trend are quite staggering. But the implications in terms of the role that APIs are beginning to play when it comes to the delivery of technology to the market are even more staggering--and the impact that cloud-based multi-tenant systems are playing in the arc of this trend is equally significant. As a result, thousands of companies and organizations are pivoting their strategies to deliver their value propositions as technologies via API. Further, hundreds of companies that offer only technology via API are spinning up. 

IBM, for example--a company that once depended almost completely on the on-premise installation of its technology—has amassed a portfolio of cloud-based technologies that it’s commercializing and delivering to the market via API under the Watson brand. In the first quarter of 2015 IBM enhanced that portfolio by acquiring AlchemyAPI, one of the new breed of smaller, API-only companies.

The API economy now spans thousands of API-providing companies across hundreds of categories. Within each category there are multiple offerings, all competing for the affections and money of third-party developers--any one of which could unleash the next API-consuming Zillow, Instagram or Uber. 

We at ProgrammableWeb track as many APIs as we possibly can in our API directory, categorizing them according to any number of the hundreds of the categories that we’ve observed over the years (such as Payments, Social, Weather, Mapping, Government and Crytpcurrency). Not a day goes by that we don’t discover another bunch of APIs to add to our directory, and we’re identifying new categories of APIs all the time.

And that’s just the APIs that are in plain sight. There are some APIs that we haven’t yet discovered but that are available from across the Internet, but there are other, private APIs that live on corporate networks belonging to companies that are very forward thinking in their application development methodologies. While they are not making their APIs available to third-party developers, they have recognized the power of loose coupling and componentization that APIs make possible. These companies are reaping—or will surely one day reap--the benefits of moving to an API-driven business.  

David Berlind is the editor-in-chief of ProgrammableWeb.com. You can reach him at david.berlind@programmableweb.com. Connect to David on Twitter at @dberlind or on LinkedIn, put him in a Google+ circle, or friend him on Facebook.

Comments

Comments(10)

aashgill

Really a good explanation for API What, How,When and Where to use API... 

Thanks!!!

cmci

Great API intro and very interested to note you mentioned UBER's potential risk, I projected for some time and confirmed after watching recent news of severl new global entrants to their market space.

Also, I watched SalesForce emerge and their first HQ's in San Mateo, CA was in office space a huge Japanese company had previously leased, then gave up, when I declined to continue with them.

Presently I'm researching the competing API Payment Processors and the related Cyptocurrency ones.

david_berlind

Thanks @cmci for the great compliment. I'm not sure I mentioned Uber's potential risk as much as I cited the company's apps as a consumer of APIs.  But no company is completely safe, is it?

Srish

Nice piece all the way ....but the start was a bit confusing !!...it would have been better if the intro would have more precise

david hyman

Hi Excellent descriptions and very helpfull. How can API be controlled so that if I wanted a private connection between say a HR SaaS tool and an inhouse service desk? Currently  a manual operation exisits between the two introducing typos in names.

I suppose my question is how secure are API connections?

David

david_berlind

You are correct in that your real question is "how secure are API connections?".. but the more precise question is how secure is the HR SaaS tool provider's connections. You need to ask your "candidates" what they do to best secure the communication.  For example, starting with protecting the connection with HTTPS.. but there are also other questions like: How do they store data at rest (is it encrypted). Do they offer a VPN option that essentially puts your "partition" of their multi-tenant architecture behind your firewall, .. and so on.

david_berlind

You are correct in that your real question is "how secure are API connections?".. but the more precise question is how secure is the HR SaaS tool provider's connections. You need to ask your "candidates" what they do to best secure the communication.  For example, starting with protecting the connection with HTTPS.. but there are also other questions like: How do they store data at rest (is it encrypted). Do they offer a VPN option that essentially puts your "partition" of their multi-tenant architecture behind your firewall, .. and so on.

jnse23

This is by far the best explanation I've received ever about API's.  David Berlind made a genial work with this tutorial. I was just looking at refresh the meaning of the word API an ended reading the whole article, but not only that. Now I have the idea of developing a proposal of "moving to an API-driven business". Wow, David, congratulations! you're genial!

david_berlind

thank you so much for the compliment. it is greatly appreciated and we have more content like this in the works. hopefully, you will find it to be equally useful.  Thanks.

David