This is the first post of a three-part series covering key performance indicators (KPIs) for APIs, based on John Musser's presentation at the Business of APIs Conference. You can read the second part here.
Earlier this month, John Musser, founder of API Science and ProgrammableWeb, gave a presentation at the Business of APIs Conference (BAPI) in New York City called "KPIs for APIs, or why API calls are the new Web hits and you may be measuring all wrong." The presentation covered many types of KPIs for APIs, reasons for companies having an API (or multiple APIs), the importance of developer experience (DX) when it comes to API success, measuring API success and ROI with real-world examples, and much more. This is the first post of a three-part series covering Musser's presentation, which can be viewed in its entirety on SlideShare.
We are living in a time when APIs are allowing new and API-centric business models to be created, changing the way people live their lives through Internet-connected mobile apps and devices, and rapidly transforming entire industries. There are several parallels between the time back in the 1990s when the World Wide Web was disrupting traditional business models and the huge impact that APIs are having on traditional Web models today.
Back in the early to mid-1990s, many companies were asking, why do we need a website? By the year 2000, most companies had come to recognize the importance of having a Web presence. 2005 is the year that APIs began their meteoric rise, the year when many companies started asking, why do we need an API? By 2010, many companies had come to realize that APIs are not only important, but a must-have tool for business.
A few years ago, Roberto Medrano, executive VP of SOA Software, wrote an article in which he compared the rise of APIs to the rise of the World Wide Web:
Think back to the 1990s. It was a disruptive time for traditional business models, beginning with the rush for a Web presence, followed by the shift from bricks and mortar to so-called "clicks and mortar." Today, application programming interfaces — commonly known as APIs — are the new must-have for business, representing the future of customer and community engagement with far broader implications than traditional Web-based business models.
API Calls Are the New Web Hits
In the early days of APIs, counting the number of API calls (requests) was the primary method of comparing different APIs and measuring API success. Many popular APIs have been able to reach "API Billionaires Club" status, receiving billions of API calls per month, some even reaching billions of calls per day. API calls have become the new Web hits, a vanity metric that has little meaning. Nothing says 1990s Web design like a hit counter, and the API Billionaires Club has become the hit counter for APIs.
'Who' and 'Why' Should Drive a Company's KPIs
KPIs and metrics have greatly evolved since 2005, and measuring an API involves many types of KPIs. Today, what a company should measure when it comes to APIs largely depends on why the company has an API and who the API is for.
Most companies have more than one reason for having an API, and there are many reasons for having one:
- To drive innovation
- As a marketing channel
- For business development and lead generation
- For user acquisition
- For a new line of business
- As an upsell opportunity
- For API as a product
- To increase footprint
- For device and mobile support
- As a distribution channel
- For partner opportunities
- For content acquisition
- To drive traffic
- To increase stickiness
- To accelerate internal projects
- To extend product
Once the reasons for having an API are established, companies must decide who the API is for. An API can be designed for internal use only, can be private and used only by partners and customers, or can be designed to be open to developers for use in third-party applications and integrated with external systems.
Why does your company have an API? Who is the API for? The answers to who and why should drive a company's KPIs.
There Are Many KPIs
There are many types of KPIs for APIs, and trying to measure all possible KPIs for an API is very difficult. Types of KPIs include:
- Traffic — Total calls, top methods, call chains, quota faults, traffic trends
- Developers — Total developers, number of active developers, developer demographics, top developers, trending apps, retention
- Service — Performance, availability, error rates, code defects, defect backlog
- Marketing — Developer registrations, developer portal visitor count and traffic sources, event metrics, social media metrics, SEO/SEM metrics
- Support — Support tickets, response times, community metrics
- Business — Direct revenue, indirect revenue, market share, costs/expenses, ROI, customer lifetime value
- Other — Forum activity, social media (both for API and apps built with API), quality, API maturity, innovation and more
Prioritizing which KPIs to measure is very important. If the reason for having an API is primarily financial, focus on measuring KPIs for direct revenue, indirect revenue, market share, costs/expenses, etc. If the reason for having an API is for marketing purposes, focus on measuring KPIs for developer registrations, event metrics, social media metrics, SEO/SEM metrics, etc.
The Next Post
The second post in this three-part series covers the importance of developer experience when it comes to API success. Developer experience can make or break your API.