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Understanding and Organizing Successful API Ecosystems

One of the most complex topics, especially for organizations that are new to the API economy, is the concept of an API ecosystem. This whitepaper was written to help you demystify what an ecosystem is and its role in your overall API strategy.

This is the second of our ongoing series of whitepapers that are written to help you to understand the essentials of a great API strategy. In the first part of this series (see Why a Holistically Conceived Digital Strategy is Key to Monetizing APIs), we covered the four major pillars of a great API strategy and talked about how a great API strategy can be a very natural by-product of a great business strategy. In this paper, we tackle a concept that remains an enigma for many API practitioners; the API ecosystem.

Compared to the early days of the API economy — more like an API gold rush — when there were only a handful of APIs, and Web developers had a nearly insatiable thirst for consuming them, API providers can no longer simply build their APIs and wait for developers to come. 

Instead, in outside-in fashion, API providers must carefully consider the types of customer experiences and business outcomes they’d like to enable. Then, they have to decide who they’ll be relying on to co-create those experiences and outcomes. Candidates include internal developers, third-party developers, independent software vendors (ISVs), and strategic business partners just to name a few. Your engagement with each of these constituencies may result in distinctly separate channels through which your ultimate customers do business with you. Adding to that complexity, each of those channels may involve different business models in order to produce winning outcomes for everyone involved; your customers, your partners, and most importantly your organization. 

We wrote this paper to help you to demystify this tricky but important topic so you can start to think about how best to organize your own API ecosystem for business success. It includes and explains examples and visualizations of real-world ecosystems that involve multiple business channels, multiple constituencies, and multiple business models, and how the various constituencies engage with the API ecosystem host (an organization like yours) while touching on the role of other ecosystem components such as developer tooling and marketplaces. 

Finally, after studying this paper, you’ll have a much better idea of the role that an ecosystem plays in your overall API strategy.