(published a year ago on QConnects)
Over a month ago, the world of APIs witnessed an inflection point in its evolution. Both Intel and CA Technologies acquired the API management companies, Mashery and Layer 7, respectively. The acquisitions happened amongst other positive activities in the world of APIs. These are all clear indications of the critical role APIs are playing in our increasingly interconnected, multi-platform world of commerce.
So how does this news impact your company? If yours is one of the few out there with a healthy Open API program, congratulations! You’re well positioned to take your business to the next level.
If you’re still contemplating opening up your API or creating one from scratch, you might be wondering if it’s really worth all the trouble and overhead. I can’t say I blame you. The API Economy is a fairly new concept that varies depending on the business goals and strategy of the company.
At Edmunds, we opened up our internal APIs to the world a couple of years back and we didn’t know what to expect. We had lots of questions like: Will developers use the APIs? Are we compromising our core business by giving up free access to our data? How are we going to make it ROI-positive? Today, our open APIs are used as a critical capability to expand our brand name and business reach, enabling us to forge new partnerships and support automotive innovations happening outside our ecosystem. We answered our own questions along the way and learned a ton, with the help of many in the API community, including Mashery.
An API is a gateway that enables developers to communicate with your systems in one of two ways: Reading out of and writing to your system. It’s also a contract; a clean, simple and standard contract between your company and the developers of the world, including yours. This contract frees developers to focus on the business goals they’re trying to achieve rather than the tech details that can take days and weeks to resolve. So if you’re still on the fence about APIs and their role in taking your business to the next level, maybe these five reasons could help make your decision easier:
1. Mobile Enablement: Let’s say you want to build a mobile app for your business. You will need a way for the app to communicate with your servers to get and set the right data points. Imagine doing that without an API. Yes, it’s doable without one, but think of the effort it’ll take to maintain, scale and update that app. Besides, most developers won’t build an iOS app without a data API. No business can compete today without mobile presence and having an API is an integral part of enabling that presence.
2. Innovation Acceleration: APIs lower the barrier to innovation at a company. When your developers have access to data in a clean, simple and standard way, they are better equipped to innovate by focusing their time and effort on the customer needs instead of how to get the data they need.
3. Partnership Enablement: In the not-so-distant past, the data exchange between your company and your partners was done through CSV files that are FTPed periodically to a remote server. Unfortunately, that approach is long dead because it doesn’t scale. Enabling external access to your systems through an API has its benefits:
- Scalability: Partners can access the data they need when they need it. No need to compile yet another data file to satisfy a slightly different use case needed by your partner. You provide the data and put the power to access it in your partners’ hands.
- Data Integrity: No more stale data! No more, “oh, we need to FTP a new file to reflect the recent changes in data.” The data available through the API is the most up-to-date data you can get. Period.
- Control: If for some reason you and your partner part ways, you can terminate their access quickly and easily.
- Analytics: You will get full visibility into what data your partners are using and how often they’re getting it. This could help you optimize your API and offer your partners more insight into data usage that you wouldn’t get with uploading a static CSV file to an FTP server.
4. Branding: APIs help get your brand name out there through 3rd-party implementations of your data. For example, the Edmunds API requires entities that use it to give us attribution by showing our logo on their site and linking back to us. This helps cement the fact that we’re the authoritative automotive data provider out there. That’s powerful, passive marketing we all should tap into.
5. New Business Model: This is largely dependent on your strategy. At Edmunds, we don’t charge for our API. We use it as a critical capability to help us advance and grow our core business. For you, it might make sense to use an API as another revenue stream for your company by charging a licensing fee for its usage. Or maybe you want to have a tiered system where you offer a free, basic and gold access plans for different audiences. We are seeing that charge-free APIs are much more attractive to developers and potential partners than their counterparts. Companies are actually switching to our API from our competitors’ because our data is good and it’s free.
So, Are you ready to open up your API?