If you want to see some of today’s most important technologies, look no further than those that power the biggest trends for the largest technology adopters. Application Programming Interfaces, or APIs, are changing the game for an enormous swatch of the world’s population: our youth.
It’s about meeting more needs in one place. Most “screenagers” (they’re not teenagers anymore) spend their time on multiple screens in a single day—smartphones, tablets, laptops, gaming consoles, TV, and other devices. At any point in time, each screen competes with the others to receive the attention of a screenager. Competition leads to fast evolution and devices are becoming smarter, working to satisfy every need on a single screen. We now have smart TVs that enable watching a favorite channel while also searching the web on the same screen. APIs play a role in pulling data and services from many places.
It’s also about sharing with everyone the eighth generation of gaming consoles—Playstation 4, Xbox One and others—that are billed to be all-in-one entertainment systems that will enable users to not only play games, but also share their videos on social media and connect with other devices. In the 21st century, companies need to make information available across multiple devices/screens and have a partner ecosystem that creates new distribution channels at the same time.
Skeptical? This past September, “House of Cards” made history at the Emmy Awards by becoming the first web-only show to win an award (Outstanding Directing For a Drama Series). Screenagers know this wasn’t an aberration, but a pointer to future business models.
Maximizing Your Revenue Streams
Business models outside of entertainment are also being built on an API strategy, one which brings services and information together in one place but also enables companies to expand their brand to new sources of revenue.. When a company open its APIs to partners, revenue from core products and services are maximized by enabling partners to: (1) provide access to a new customer base; and (2) create new services for existing customers. The benefits from API strategy are more than just these two; companies are creating an ecosystem of partners that monetizes each others intellectual property.
Take for example the telecom industry: Before the app ecosystem became mainstream, the only source of revenue for a mobile operator was connectivity charges from subscribers. But, today, apps access the location of a subscriber, video service is delivered by partners, and advertising to selected profiles in the subscriber base. There is an API ecosystem working in the background. As per Telecom Network API Marketplace, today nearly 24% of all web and 15% of all mobile applications utilize APIs. This figure is expected to increase to more than 68% by the end of 2018. Growing at a Compound Annual Growth Rate (CAGR) of 38%, the Telco Network APIs market is expected to account for $157 billion in global revenues worldwide by 2018.
Experiencing the Travel Mashup
Another industry that is experiencing the transformation brought about by API strategy in business models is the travel and tourism sector. Travel websites are now a collection of mashups that access data from various sources, update in real time and provide an easy-to-use interface for booking and ticketing purposes. Hotels, airlines, cruise liners, and others enable travel sites to access reservation data through APIs. Partners can then access customer data to provide additional services, which contribute to tourism and the experience of the travelers. So, third parties can access booking data using API and create a customized itinerary for customers.
Managing Your API Strategy
API started as a specification to interact with a software component (like a library in OS); over time it has expanded to a strategic tool to access data and business applications. This transformation kick started with the advent of Web 2.0, when web APIs were widely used by Facebook, Twitter, Google Maps, and other social sites. Today, you cannot avoid having an API strategy that needs to support REST-based API styles and seamless transformation of data and message formats, such as XML and JSON. By opening company APIs for greater business benefits, organizations must address the challenge of providing security and access-control capabilities as well as event-based policy management. After all, certain APIs are going to provide access to your customer data. Additionally, you would want to monitor the SLAs and KPIs to measure and improve the success of open API initiatives. The answer is a self-service portal that makes it easy for developers and business partners accelerating the on-boarding process and providing business transparency related to the use of Open APIs in their applications.