API Economy: Essentials and the Impact on The Software Business

What is API Economy?

  1. The actual code of a software interface
  2. A set of documentation and specifications defining the rules on how the interface should work, API call terms, data transmission rules, etc.
  • Database API. This type helps connect the databases and the database management system.
  • OS API. They are intended to provide access to the operating system’s resources and functionality. E.g. Cocoa for MacOS.
  • Remote API. These provide connectivity between applications on two (or more) different devices. E.g. Java Remote Method Invocation.
  • Web service API. Data transfer for web-based apps and services, like PayPal or Google Maps, these are the core of the API economy as these APIs are usually shared as public.

The impact of API economy on businesses

Web API growth since 2005 up to 2019 Source: ProgrammableWeb.com
Percentage of revenue generated via APIs split by respondents Source: mulesoft.com

How to benefit from API economy

API gateway providers’ market share by RapidAPI developer survey 2019–2020 Source: rapidapi.com

API directories and marketplaces

  • ProgrammableWeb. This largest repository includes approximately a thousand categories you can filter by. To publish one, check this link.
  • RapidAPI. An API marketplace that offers API collections by categories and recommendations based on preferences.
  • Github. Well known software development hosting, this is where you can find APIs among other software projects.
  • io. This is an experimental open-source API directory with a simple search feature and publishing capability.
  • Apis.guru. An open-source directory accessible through a single REST API, it features only public APIs.

API economy for consumers

  • Faster development and decreased time to market, as API’s basically give the access to unlimited functionality that is easy to integrate with. More importantly, some of the functionality comes as a ready-made part of a software. So, sometimes a provided API may eliminate the need to develop a feature on your own.
  • Implement features of third-party services. Think of cloud-based machine learning services, databases, social networks, or meta-searches that offer their APIs for developers. All of this functionality enhances the user experience, making it more valuable for the end user.
  • Provide more data as APIs were initially meant to be used. This allows an end user to access the required data without switching between the platforms or applications.

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