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Are You and Your Clients Ready for the API Economy?

Alan Radding, guest blogger

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Notice what has happened to the lowly application programming interface (API)? Once considered just one of many components of a SOA effort, the API has been elevated to a strategic tool, the foundation for the API economy. Are your clients prepared to compete in the API economy and are you prepared to help them get there?


APIs widely used for Cloud development (click to enlarge)

The big consulting firms already are jumping in. At Deloitte APIs have been elevated from a development technique to a business model driver and boardroom consideration. An organization’s core assets can be reused, shared, and monetized through APIs that can extend the reach of existing services or provide new revenue streams.

In an extended interview with a client, PwC discussed the API economy, asking: Why is creating and offering APIs to others important now? The answer was revealing: APIs are the building blocks of the digital economy. They make existing capabilities fungible, so that it is possible to use them in new ways, quickly and easily, thereby spurring innovation and new value creation…. These assets can be used to make existing services better or build completely new offerings, to drive incremental revenues, and to enhance a third party or an enterprise brand.

There are a number of differences between first generation SOA and today’s API economy. One big difference lies in the new workloads—especially lightweight mobile and cloud apps—that are fueling this surging interest. The mobile device certainly is the fastest growing platform and will likely become the largest platform soon if it is not already, surpassing desktop and laptop systems.

(BTW, each of your clients that have a website–which ought to be every client–should already have a mobile app. Google, essentially, has started ignoring websites that are not mobile-capable. Visitors increasingly area accessing websites to access information, use services, and conduct transactions via their mobile devices—guess this alone should be the topic of an upcoming column. If you aren’t tapping the mobile app market you are missing what will become an increasingly big part of any IT consulting practice.)

The other new workload driving the API economy is the Internet of Things (IoT). APIs will make it possible for myriad devices and applications to interoperate as the IoT app developers expect. And analysts are projecting astounding IoT growth–tens of billions of devices by 2020–encompassing everything from wearables to M2M to the Cloud and mobile.

SOA initiatives initially focused on the capabilities of the providers of services, particularly for the development, runtime invocation, and management of services. Here the APIs primarily resided in-house and focused on internal systems using a small set of internal APIs. They were never intended to be widely distributed to partners or customers.

Today’s API economy, on the other hand, focuses on the consumption of these services by customers and partners as well as by internal users. Mobile devices, for example, have become a favorite way bank customers access their financial information, check balances, and initiate transactions through the bank’s mobile app. Each action is calling one or, more likely, multiple APIs. Here the APIs really aim to facilitate the efforts of application developers (internal developers and external business partners) who must code their apps for access to existing and new API-enabled services.

One goal of an enterprise API effort is to expedite access to already deployed services, such data center-based CICS services or those of a partner. But a more important goal is to drive the use of those same software assets by customers, particularly mobile customers.  In that case the API effort not only improves customer service and satisfaction but could also generate added revenue. In the API economy you client’s existing software assets may have revenue potential of their own in the public API marketplace that will be an integral part of the API economy.

This calls, however, for a new set of interfaces. The APIs for accessing these assets, defined using well known standards such as web services and Representational State Transfer (REST) with JSON (JavaScript Object Notation), and published via an easily accessible catalog, making it efficient to subscribe to APIs for obtaining permissions and building new applications. Access to the APIs now can be controlled and tracked during runtime invocations and even metered, making revenue generation practical.

The API economy also can morph into a commercial exchange of business functions, capabilities, and competencies as services using various APIs. In-house business functions running in your client’s data center can evolve into API as-a-service delivery vehicles, which can produce a revenue opportunity.

As an IT consultant, you can open up an entirely new revenue stream for your clients simply by repackaging their existing software assets for the emerging API economy. With the combination of SOA, web services, REST, JSON, OpenStack, and Docker (for containers) you can set up yourself and your clients as players in the API economy.


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