Monetisation of APIs surges as firms search for competitive advantage
There would be very little digital transformation going on in enterprise without the use of Application Programme Interfaces (APIs).
API is code that enables two software programs to communicate. That may not sound like much, but for developers APIs are like WD-40, the glue that holds most software together, connecting applications to applications or entire operating systems.
An API defines how a developer should request services from an operating system or other application, and exposes data within different contexts and across multiple channels.
To this end, they’ve helped thousands of companies make the shift to cloud. APIs have also enabled interoperability between legacy and new systems, saving thousands on upgrades.
Not only can APIs save money they can also generate revenue by allowing companies to grow quicker. Acquiring third party APIs, for instance, enables enterprises to build products and services that other firms have already developed, that would otherwise take too long to build themselves.
This new API economy also works favourably for companies that have poured thousands into research and development; now there’s an opportunity to mass market their code.
API hub Rapid, which has just published a new report highlighting trends in software development and API usage, found that there has been a surge in API use and monetisation.
Rapid’s 4th annual State of the APIs Report comprised of insights from more than 850 global developers, engineers and tech leaders spanning over 100 countries including the US, the UK, Germany and India.
The report claimed that two thirds of developers are relying more on APIs in 2022 than in the previous year.
It also pointed out that the telecommunications, technology and financial services sectors expect to utilise more APIs in 2023.
Rapid founder and CEO Iddo Gino said that his firm’s report this year suggested that businesses focussed on digital transformation now need to be API businesses in order to thrive.
“Many organisations rely on their developers for technologies that will help them stay competitive in today’s economy and in turn the developers are increasingly leveraging APIs for speed and operational efficiency,” he added.
The report found that because APIs make it easy to adjust, transform, enrich and consume data more than 75% of developers are prioritising participating in the API economy or plan to prioritise it soon.
Approximately 70% of respondents expected to use even more APIs in 2023 than last year.
The survey found that the number of APIs grows with an organisation’s size: nearly 40% of the largest companies – those with more than 10,000 employees – have more than 250 internal APIs. By comparison, 64% of the smallest companies (1- 50 employees) use up to 10 internal APIs.
While internal APIs remain the most common API type for developers (75%), half of all developers are working on partner-facing APIs (up 5% from 2021) or third-party APIs (54%, up from 49% in 2021).
Partner-facing APIs grew nearly 10% year on year, in the technology industry.
The survey found that the number of organisations putting their APIs out to market last year was up around 5% from previous years and had risen 16% among developers working in the financial sector.
API testing continues to be a top priority: more than 90% of developers are testing or plan to test their APIs, especially those in the financial services and telecommunications industries.
Enterprises such as Ocado and Mars are now using APIs as part of their data integration strategies, although one of the challenges Mars VP of digital VP Santosh Jamadagni has warned of is the effort it can take to convince internal business stakeholders and decision makers about the value of investing in APIs.
He advises digital leaders to focus on the concepts of re-use and productivity “which are values that other business stakeholders will understand”.
Subscribe to our Editor's weekly newsletter