API Business Models Take Center Stage

The number of public APIs that are available has been growing at a phenomenal pace with our directory now clocking 6000+ APIs. While this number is definitely going to keep increasing, it is also important to understand the reasons why organizations want or should have an API in the first place. API's are increasingly getting associated with business models and not just using technology to expose some information.

In a talk at The Next Web Conference, Adam DuVander spoke about an API being three key things: Apps, Partners and Income (video). As a business model, you want your product to enable developers to write apps on top of it, push it across to as many partners or channels, which in turn will mean more business for you. In other words, APIs are now being seen in the larger context of how they could enable new business models on the Web, rather than just looking at them as a technology.

A recent survey by Vordel, a Cloud Application Gateway provider, has also confirmed the above premise. The survey asked participants of a webinar as to why their enterprises were adopting APIs. The results shown below indicate that half the respondents adopting APIs to build out new business channels.

The survey also threw up another interesting data point: More than 75% of the organizations have appointed dedicated Managers/Architects to oversee the API strategy.

APIs are now a key part of an organization strategy and the API business models are much diverse in range than they were before. For a great overview of API Business Models in 2012, check out John Musser’s Open APIs: What’s Hot, What’s Not? Presentation at Gluecon 2012 and find out the right one for your organization.

Be sure to read the next Best Practices article: Twitter API Best Practices: Single vs. Multiple User OAuth