The rise of the API economy

Over the past decade, Application Programming Interface (API) has experienced tremendous growth and has become an integral part of the technology industry. APIs are sets of protocols, routines and tools for building software and applications. They allow developers to access and use pre-existing functionality from third-party software components, services and platforms, making the development of complex software much faster, more efficient and easier.

 

One of the primary reasons for the growth of API is the rise of cloud computing. As cloud computing has become more prevalent, businesses have sought to take advantage of its scalability, reliability, and not to mention its cost-effectiveness. APIs enable businesses to leverage cloud computing capabilities by providing easy access to cloud-based resources, such as storage, processing power and analytics. By using APIs, businesses can access these resources without having to invest in expensive hardware and software infrastructure, deployment of which is not immediate as well.

Mobile computing is another factor contributing to the growth of API. Mobile devices have become the primary way people access the internet, and mobile apps have become an integral part of people’s daily lives as consumers prefer to access mobile apps in consuming services. APIs enable developers to create mobile apps that can integrate with other applications, services and platforms, such as social media, location-based services and e-commerce platforms. This integration provides seamless user experience, allowing users to access information and services from different sources within the same app. Think of it this way — when you use a mobile banking app and send money to other banks, the application calls on the specific APIs to provide the service you require. Connecting to different banks in the app requires different APIs, hence one can imagine the behemoth of an API catalog that the bank’s IT team must contend with day in day out.

 

APIs also provide a way for businesses to monetize their data and services. By exposing their APIs to third-party developers, businesses can create new revenue streams by charging for access to their data or services. This approach has become popular in the financial industry where banks and other financial institutions are using APIs to provide access to their data and services to fintech (financial technology) startups and other third-party developers.

The benefits of API are numerous. First, APIs enable developers to build applications faster and more efficiently. By using pre-existing functionality from third-party software components and services, developers can focus on building new features and functionality rather than reinventing the wheel. This leads to faster time-to-market and reduces development costs. In addition, APIs enable businesses to create new revenue streams by monetizing their data and services. By providing access to their APIs, businesses can charge for access to their data and services, creating new sources of revenue. Lastly, APIs improve the user experience by providing seamless integration with other applications, services and platforms. This integration provides users with a unified experience, allowing them to access information and services from various sources within the same app.

 

One challenge seen though is in the management of these APIs, especially when different gateways or environments or runtimes are used. This multi-gateway environment inevitably creates a siloed way of managing APIs, and IT folks suffer by not having a single view of all APIs across all gateway providers. This can be addressed by looking at platforms that consolidate all of these and to provide better end-to-end control, thus enforcing governance, compliance and security without impacting release timelines.

APIwiz (apiwiz.io) is a low-code API Lifecycle Management platform that is meant to harness the full value of APIs across heterogeneous environments, disparate architectures and multiple gateways or service mesh. This comes critically important especially when organizations look at open API platforms, like what the Bangko Sentral ng Pilipinas is embarking to do ― to ensure that financial consumers can enjoy financial services to the fullest, whether one lives in the city or the most remote island. Finally, the operational cost that will be significantly reduced cannot be ignored as well.

To conclude, as the technology industry continues to evolve, API will undoubtedly continue to play a crucial role in enabling innovation and driving growth. It is then imperative for organizations to look into available technologies and capabilities that would remove operational inefficiencies and optimize the lifecycle management to deliver better customer experience both to internal and external stakeholders.

 

Kay Calpo Lugtu is the chief operating officer of Hungry Workhorse, a digital and culture transformation firm. Her advocacies include food innovation, nation-building and sustainability. The author may be reached at kay.lugtu@hungryworkhorse.com.

Source: https://www.manilatimes.net/2023/05/11/business/top-business/the-rise-of-the-api-economy/1890840/