The API economy is a huge trend right now. You may not even know what API is but you definitely use it on a daily basis. Let’s take an average smart device – it is likely to have a lot of widgets. So for example, you like checking the weather or euro exchange rate every day and you use widgets for this purpose. But how exactly widgets manage to store and provide all that information? It is not stored on your device and, actually, the widgets do not keep it either. The secret behind the information retrieval is the usage of APIs.
API is short for Application Programming Interface and its main goal is to establish the connection between the applications, different parts of the app, or even databases. For example if you are using a widget for checking euro exchange rate, you can be sure that it is connected with a certain banking service that provides relevant information. The same is with a weather widget – it is connected to the weather service and that’s how the info about temperature outdoors, the possibility of rain or blizzard, etc. gets right on your device.
We have already covered the topic of APIs integration in one of our previous articles. So if you are interested, take a look at it here, because in this article we’d like to discuss the API economy and how every business can benefit from it. We will speak about the impact of API economy, describe how it works, and share a couple ideas of how you can take advantage of it. So, without further ado, let’s get started.
What is API economy?
As you’ve already understood APIs are really great because they ensure incredible interconnectivity of applications. So basically if you are building your own app, you do not need to spend a lot of time and money on creating the features that can be enabled thanks to APIs. You just need to find a necessary one and integrate it into your solution. Even if that API is a paid one, it will cost you less than developing a part of the solution from scratch.
With all their convenience and affordability, no wonder that APIs became so popular and widely used. They even kick-started such phenomena as API economy. It implies that APIs can be real money makers and you can consider them a business model. According to Gartner API economy can even turn a business or organization into a platform and add value to it. Let’s take a well known Uber as an example. The business that aimed to connect drivers with clients became a worldwide platform thanks to API integration (Google Maps). This created a totally new business model and pushed Uber-like apps development.
The main advantage of any API is that it is able to turn data exchange and connection between applications to a whole new level. It is easy to incorporate API and enrich your app functionality without paying too much attention to the platform on which your app is built, the data structure that it has, or its technology stack.
The API economy changed not only numerous businesses but the applications. The solutions now are not so “monolithic” as they used to be a decade ago. They are more lightweight, their functionality is richer, they can connect with numerous services without any conflicts.
As any economic model API economy includes several so-called parties. They are API providers, API infrastructure providers and developers.
- API provider usually means not a separate person, but rather a company or business that has its own API and provides access to it under certain conditions. Let’s say a medical company developed its API for drug data control and now any clinic can integrate it into their working system for a special payment.
- API infrastructure provider is usually a company that invests into API infrastructure, its development, creation of reliable channels, and it also is responsible for API management.
- Developers team is hired by any company to successfully incorporate API into an existing solution or to create a solution from scratch and with API integrations.
API economy cannot exist without all these parties since its overall success and number of newly created APIs depends on them. If previously APIs were just an addition to an existing project, now they can be called a separate product able to monetize any business. So let’s take a closer look at the advantages of API economy for businesses.
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What businesses and how can benefit from APIs
First of all it is necessary to mention that every business needs a working solution. Digitalization is not just a trend, it is a must-have these days. A business solution can help you optimize numerous processes, reduce paperwork (if you still have a lot of it in your company), increase your income thanks to optimization, and many more. If you combine a solution with the right API that the alike businesses can use further for their apps, then you will also get an additional more or less stable income from selling that API.
So if you already have a business solution (web or mobile one) or just consider developing it, you can benefit from API development and usage as well. Not only can API allow you to extend the functionality of any system or application, but also it can reduce the development cost, speed up the overall process and make your solution more advanced.
Speaking about business niches that can make use of software development and API incorporation, it is hard to highlight separate industries, because literally every company needs a solution for this or that purpose. However, the complex businesses that are related to medicine, logistics, real estate, tourism, entertainment, finance, education and sport. Also companies that have their own IoT environment or involved in business management will also need a reliable solution and API.
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We have reflected on the most crucial benefits of API development and discovered several main ones that every business owner needs to know. So let’s take a closer look at the points we’d like to emphasize:
#1 You will add value to your business
It is great to have a solution that makes your company more productive and profitable, but it is even greater to be able to offer some services like paid API to other businesses. If your API is a perfect fit for your business segment, then you can offer access to it to other companies under certain conditions and this will be your additional source of income.
If you want to know more details about how software development adds value to businesses, then we’d recommend you to read this post from our blog.
#2 You will decrease time to market
Based on our experience we can say that sometimes business owners are afraid to start the development process because they think it takes too long. They are eager to build and launch their solutions as soon as possible since their idea is fresh. And that is exactly why all APIs are for. Thanks to their integration any solution can be created much faster and have all necessary options and even more great additional ones.
So it is possible either to use ready-made APIs or develop your own one together with the solution and then provide it to other people who need it to complete or expand their projects. The second option, without doubt, is more profitable and your own API is able to address challenges related to your specific business.
#3 You will address security issues
If you develop an API that will be thoroughly tested and checked, then you can be sure that even the open nature of API services will not influence your or other company security. Safety is a crucial factor that every company always takes into account while developing a solution or buying services.
If your API is safe and well functioning, then many businesses from your segment will likely choose it over any other publicly available and free one. Your company can be a living proof that your API functions fine and without any issues, and this will let you set a certain price for your reliable API.
#4 You will improve user experience
The end users will appreciate your solution more if it will offer a wide range of functionality and will be very easy to use. So not to overload your solution, make it more light-weight and user friendly. It is always better to use an API for this purpose.
If there are so many services offering APIs for social networks, machine learning, meta-searching etc, why not develop your own API for a specific industry and purpose? This will make your business more competitive, improve the experience of your solution users and will bring you clients interested in incorporating your API into their business solutions.
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All you need to know about API development
The number of APIs on the digital market grows every year, and today you can find an API for every possible use case, purpose and industry. So if you made a decision to develop your own solution and API you should know that you’ll be able to publish your API together with all crucial documentation on numerous marketplaces. This will let your potential API users easily find your API and understand what it is good for and how it can be incorporated into their solutions.
So we have looked through several most popular directories where people end up searching for a necessary API. Here are some of them:
- Github – it is a hosting service widely used among developers, and it is possible to find a certain API among other software solutions effortlessly.
- Apis guru – this service is very popular among those who are looking for public APIs. It is an open-source one.
- RapidAPI – it is a well known marketplace of APIs where you can find different kinds of them, use advanced search, look through collections and even get relatable suggestions that are based on your preferences and choices.
Of course there are many more such services, platforms and marketplace that offer different types of APIs by category. Here are, for example, the most popular ones collected by RapidAPI on their website.
So before developing a solution and your own API, we would recommend checking the main four types of web APIs and their peculiarities and make sure you’ve selected the one right for your business. Here is a brief information about web API types:
- Open API – they do not have any restrictions when it comes to users, since they are publicly available and can be accessed by anyone.
- Partner API – they are provided by businesses to other businesses and are never publicly available. This type of APIs is perfect if you want to develop your own one and then make it a source of additional revenue.
- Internal API – these ones are used within big companies that have a lot of internal software and need it to be connected. This API is usually for one company only and it is created to improve its performance and quality of services.
- Composite API – it combines service and data APIs and used mainly to speed up execution and performance of the listeners in the web interfaces. It batches API requests into a single call. So it is like a sequence of tasks that are running synchronously.
Web APIs are not the only ones, there are also web service APIs among which you will find REST, SOAP, XML- and JSON-RPC. They all are protocols that are Function or Data driven and can transfer the information easily. It is also preferable to check out more information about these APIs or consult the software development company regarding them, since maybe they are exactly what is needed for your project.
The API can be developed using PHP, Python, Java, JS, Golang and the development itself may take up to 10 months depending on the business requirements and functions that the API will need to perform. So the more complex your project, the longer it will take to build it, then test and check its connectivity and functionality. For example, when it comes to testing, we tend to use one of the following scenarios:
- Our QA can create various scenarios using codeception and then perform quality checks.
- Our manual QA does all the job and compares what requests are accepted by API using Postman.
The API development is a complex procedure that can be done by real professionals. Not only will you need the services of developers and testers, but also Business Analysts can help you with specifications, assessment of your business and technical needs, identification of correct technology stack, etc.
So if you have information at your disposal that can be valuable and useful for the businesses from your segment, and you are ready to share it under certain conditions via API, then you definitely need to develop it.
APIs have become not only irreplaceable parts of numerous systems and programs, but also these days they can be called successful standalone projects able to bring additional revenue. They even gave birth to a new phenomenon called API economy.
Since digitalization is a must rather than an option, nowadays every company and every business needs a reliable solution. And if you add your own API to it, you can boost your business drastically, since APIs can be real money makers. By providing access to your API for an additional price, you can add value to your business, gain client base and make your own software even better.
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