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Four keys to API business success

Whether in mobile, social, streaming video or the Internet of Things (IoT), today’s Application Programming Interface (API) ecosystem is fundamentally changing business as we know it.

These evolving markets are linking people to services, content and goods with a speed and ease that have transformed previously impossible or impractical transactions into economically viable and convenient events. Companies are modifying their DNA to be more digital, and APIs are at the core of this digital transformation.

This move towards a digital and API culture is having a significant effect on how companies purchase new solutions, expand their capabilities and interact with their customers. Take Netflix for example. The company initially sold a service that made watching movies incredibly convenient where consumers could go online, select the content they wanted to watch, and then receive it in the mail a few days later.

This method, once considered “fast,” was essentially a transfer of data to your home. Now, this method appears archaic considering what Netflix API’s are capable of today. These days, consumers can simply turn on their streaming device of choice, click on the Netflix App and receive near instantaneous access to thousands of shows and movies via the cloud. Digital business and cultural innovation of this nature requires a robust and nimble technology stack. A stack that not only scales quickly when the market demands by adding or removing compute nodes for cost-efficiency, but that also integrates seamlessly as part of an overall digital ecosystem and provides measurable ROI.

Here are four essential ingredients for succeeding in the rapid proliferation of the API market:

Make your API easy to use

After you have built a solid API, you need to put it to good use. After all, it provides zero value if it exists in a vacuum. API technology is transforming how companies buy, deploy and utilise business applications - typically, buying and installing a business application would involve lengthy sales and implementation cycles frequently supported by consultants and sales engineers. 

But as companies embrace the cloud, they are taking advantage of smaller, more agile apps and micro-services. These are often dedicated to specific tasks and are becoming increasingly popular. Eventually, companies will need to embrace these newer models if they want to be competitive. Most API-based companies provide secure access to a sandbox and software development kits (SDKs) for starters.

In this case, it can be beneficial to have not only the base APIs and SDKs for general purpose integration but also for pre-built components on top of these so other major providers in your vertical can interact with your system natively. You also should have thorough and easy-to-utilise documentation and code samples.

Build a solid API infrastructure

APIs have been around for years but developers have historically – and heavily – relied on legacy and disparate approaches based on CSV, SOAP and XML protocols. These methods are slow, prone to human error, pose security risks, and typically require more overhead. Now, we’re seeing wider adoption of new approaches such as REST and JSON, which empower companies to bring higher value, API-driven services to market, either as smaller, dedicated micro-services or as larger, fuller-featured applications.

That said, the lifeblood of this digital transformation is data. Organisations that can consolidate information better, or share it faster in unique ways, and leverage the data’s value have a competitive advantage. On the other hand, if businesses can’t figure out how to share information rapidly and cost-effectively, they can’t create the types of rich seamless user experiences that today’s buyers demand. That is why having the right API infrastructure in place is mission critical to success in the digital market.

Consider security implications

In this era of the API, security must be top of mind. Companies are allowing their core assets and IT/business processes to be available to other companies to integrate and to be a profitable part of their ecosystem. This means security is paramount for every party involved.

To support this effectively, several aspects of security must be embedded/enabled by your API integration. These include:

  • Authentication: To reliably identify users
  • Authorisation: To give identified user/API access to appropriate resources/data
  • Encryption: To assure no information is available for unauthorised and validated access
  • Signatures: To ensure integration integrity
  • Vulnerability assessment: To prevent damaging attacks to users, providers, partners

If you follow established guidelines and protocols for security and have an effective audit model, security can assure your business, users and partners are safe when exposing data via your API.

Determine ROI

Once you’ve solidified your spot in an ecosystem, built a solid API infrastructure, and addressed any security concerns, you need to figure out how to generate monetary value. In order to do this, you must have a full understanding of how your API is going to serve its surrounding environment as well as your overall business model.

Is your API going to allow you to sell into new markets? If so, the ROI can be calculated based on a sales growth metric. Is it going to allow you to improve your own internal operations by allowing the move to a micro-services approach or the ability to control where core functionality resides versus customer specific functionality? If that’s the case, the ROI is derived by calculating the overall expense-savings.

Whether traditional service providers are looking to create new offerings or new companies are launching innovative products to market, being able to capture and measure data from your API is key to ensuring top-line revenue growth.

The API economy is a rich but complex environment, and it requires businesses to rethink how they balance all these different factors. By building a robust, easy-to-use API infrastructure that addresses a market need and provides the data necessary to measure ROI, business can break new ground in what’s still considered unchartered territory.

Ed Popow, Principal, IoT & OTT Services, goTransverse

Image source: Shutterstock/Wright Studio