The Three Drivers of the API Economy

Discover the three main drivers of API strategies today

Explaining that APIs are a big deal is rarely necessary anymore. Both major scenarios of APIs as a way to interface with partners or the public and APIs as a way to structure your IT internally for greater agility can be explained and illustrated with many convincing examples.

Explaining some of the nuances around API strategies and where it makes a difference how you define and execute one is more complex. Often, this requires a deep dive into strategic goals, API styles/technologies and the resulting properties of API landscapes.

What we have seen here at the API Academy is that between those two aspects (“APIs are a thing!” “But how do you do them right?”), it can help to briefly reflect on “Why now?”, the question of why APIs have picked up so much steam recently, with particular reference to the practice of using them in a microservices architecture.

One of the fascinating observations in the recent past has been that many successful organizations have fundamentally changed the way they look at IT. Instead of seeing it as a cost centre, they see it as an enabler and champion of business opportunities. This change of perspective usually has two drivers: Being pushed to become better at changing because the world changes faster; and being pulled to become better at changing because that will make the organization more successful.

These two drivers of push and pull have existed before and we have seen them in other areas of organizational structure (e.g. lean manufacturing). There may also be a third force in play that makes this push/pull combination a major trend in IT. And that third force is that technology and architecture patterns have gotten to the point where implementing an API-based strategy is perceived to be realistic by many organizations.

In summary, this means that there are three main drivers that have made APIs and API strategy as big as they are today...

Push The world and its markets change quicker than ever before. Technology changes trigger developments that quickly change markets. Not having the readiness to adapt to these changes is a major risk. Avoiding change is seldom an option, as more nimble competitors will be able to move more rapidly and capture more market share.

Pull Changing to a more agile organizational model not only reduces risk for an organization, it also improves opportunities. The quicker IT can implement changes that are driven by business needs or opportunities, the easier it is for an organization to have a quick and effective feedback loop of assessing its fitness and adjusting accordingly.

In addition to this, the “Network Effect” comes into play. The more companies are API-enabled, the more attractive it becomes to be a part of this ecosystem and have more options when it comes to changing the organization’s focus.

Follow the Leaders Technology has come the point where enterprise IT does not look at a homogeneous and centralized IT development process as the best way of delivering IT capabilities. Allowing teams more freedom and being able to scale this heterogeneity with containers and DevOps has become a model that fast organizations are increasingly adopting.

Following the examples of these organizations, understanding their processes, taking advantage of the emerging product landscape and embracing this as an essential part of the process of becoming better at changing quickly has become something that is not perceived as a risky strategy anymore.

Looking at the current API trend, with these three drivers in mind, it both makes a lot of sense that it is happening and also that it is happening now. It additionally becomes clear that APIs alone are not much to be excited about (which should not come as a great surprise to anybody). It is simply their role as enablers in the process of making organizations more adaptive that makes them interesting and attractive.

As with any enabler, it is important to focus on why you are using APIs and whether you are getting the most out of them. And you should always keep the eyes on the prize: Decomposing the organization to make it more adaptive and to drive organizational fitness.

(This post was originally published on my personal blog)

The Author

Erik Wilde

Lead API Technologist

An expert in protocol design and structured data, Erik Wilde consults with organizations to help them get the most out of APIs and microservices. Erik has been involved in the development of innovative technologies since the advent of the Web and is active in the IETF and W3C communities. He obtained his PhD from ETH Zurich and served as Associate Adjunct Professor at Berkeley before working at EMC, Siemens and now CA Technologies.

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