Years ago, application programming interfaces (APIs) were viewed as a new cohesive way to integrate applications together. Today, APIs are as necessary to digital businesses as websites. From B2B to consumer, from private to public, APIs span a vast variety of use cases and applications, yet their value remains clear: the ability to exchange information with audiences in new ways. That value translates to a clear economic benefit too. Salesforce reportedly makes more than 50% of its revenue via APIs. And Expedia? Almost 90%!
They aren’t alone. The explosion of APIs shows no signs of slowing down. In fact, a recent report by Deloitte University Press found that, as of January 2015, public APIs had doubled over the previous 18 months and that companies had published more than 10,000 total public APIs to date. APIs continue to grow more sophisticated and widespread, driving previously unexplored capabilities.
This so-called API economy includes companies in all industries, from financial services to retail to telecoms and more. But why?
Because, as Harvard Business Review recently discussed, APIs can help companies gain a distinct competitive advantage. According to Babson College Professor Bala Iyer and Boston College Associate Professor Mohan Subramunian, APIs can help organizations:
- Tap into customer insights: Implementing APIs allow experts to venture into the previously unchartered territory by acquiring larger quantities of information on consumer behaviors and patterns.
- Leverage insights for proactive customer approach: With information assets collected via APIs, companies are able to gain predictive capabilities related to consumer behavior to better understand their needs, improving the customer experience.
- Sustain a competitive advantage: Organizations can not only get a head start on customer information acquisition through APIs but also build a sustainable competitive edge. For instance, an “invite a friend” API helps a current user with a useful feature, and also helps provide the company with a larger user base.
- Expand use cases: By utilizing APIs, customers are exposed to more platforms through which they can interact with companies, to gain greater market share. Even more powerful, APIs allow companies to enter entirely new markets that may not directly relate to their core offering.
At Axway, we are big proponents of an API-first approach. Embracing an API first strategy can mean the difference between success and failure in the era of digital business. What’s possible for your company by embracing APIs?
Learn more about Axway’s API-first approach here.