API Economy

We have entered the era of the API Economy. Or in other words, an era where organizations can create efficiencies and uncomplicate legacy systems, alongside catalyzing innovation with brand new services, capabilities, revenue streams and consequently sources of value and growth, through the use of Application Programming Interfaces. There is now an API for almost any service, from communications, to finance, to billing, to travel and logistics — one of the sectors placed under most pressure during the pandemic, and in the vast majority of cases, successfully rising up to the challenge. And this was only possible due to people and technology in partnership, supported by the connection taking place across API interfaces (price API, availability API, tracking API, delivery API etc) all accessible on mobile.

With the rapid advance and convergence of IoT and IIoT, we are seeing software embedded almost everywhere. From cars, to factory machining, to air conditioning and even light bulbs, it is the API that provides the glue, the Lego building block if you will, that enables the connectivity of all these different devices. Although actually in existence for more than two decades, in recent years and further accelerated by the pandemic, the rate of growth has been nothing short of exponential. Today over 40% of large organizations have 250+ APIs, with more details about this global API economy evolution available here.

These are also trends that are set to continue as new research reveals that 58% of global enterprise IT decision makers report that APIs advance the speed of new app development, with 53% stating APIs are vital to building better digital products and experiences. For public APIs, this means the capacity to empower consuming facing applications enabling new means of connection and engagement across mobile, web and social apps, vital to foster omnichannel seamless and personalized experiences. And for private APIs, this means the capacity to bring new efficiencies, service levels and experience satisfaction to employees and ecosystem partners too.

Catalysts for increasing API network traffic include the growth in machine to machine communications, software defined paradigms, system automation, new security and networking solutions, and the acceleration toward cloud apps and architectures from edge to users and endpoints. Additionally, the impact of the pandemic on the digitalization of business, education and public services has accelerated pace, and the rise of low-code tooling to support both programmability AND connectivity has had a significant impact too.

APIs not only help build new business opportunities, they impact more broadly to accelerate an organization’s overall digitalization. With data living everywhere, a solid API strategy is fundamental to help facilitate the holistic end-to-end process of insight driven transformation. Today, it is increasingly the case that sustainable competitive advantage for companies can depend on building platforms and optimizing data driven insights using Artificial Intelligence and Machine Learning, which are all enabled by APIs. And the growth of the API economy also requires growth flexibility from IT.

Further, APIs are not solely the preserve of the latest start-up in digital business, they can equally transform older and more traditional industries. Taking the insurance sector as an example, API based distribution can help insurance carriers target new customer segments on their existing business lines, whilst offering brand new products to existing customers. And from a change management perspective, API driven data delivery can support optimization of the Continuous Integration, Continuous Deployment (CI/CD) pipeline, altering the ‘physics’ of data to align with the flexibility of cloud based infrastructures and automated development toolchains, creating faster and higher quality feedback loops. Clearly APIs can benefit organizations almost anywhere! So what and where are the challenges?

Most recently, API security concerns have gained headlines, with issues including unauthenticated API snoops gaining access to private customer data such as gender, age, birthday and city, app traffic impersonation with the purpose of scraping product data or other mal acts, and inappropriately connected APIs enabling access to the personal data of another user. New research has found that 66% of organizations report slowing the deployment of an app because of API security concerns. Knowing exactly what is calling your APR is a necessary element to protect your mobile channel from scripts and bots, ensuring only genuine mobile app instances can use it. An excellent resource on API vulnerabilities and how to address them is available here.

It is clear that for the API Economy to thrive, with the accelerated shift to digital and the desire for tailored experiences increasingly driving the need for new business models and faster time to market, and equally accelerating API usage and demands, better API management and better API integration is essential, directly addressing the challenges above. Organizations must be able to know what APIs they have implemented, ensure these are not used more than once, and can seamlessly monitor and control API data exchanges real-time. SAP meets these needs across API security, availability, transparency and integration, allowing organizations to optimize the exchange of value with consumers, employees and ecosystem partners alike.

SAP API management software provides the foundation of a successful API strategy with the intuitive programming model of SAP Graph frequently been described as the ‘API of the Intelligent Enterprise’. A fantastic case study of SAP integration partnership benefits can be found here with Bacardi with further successes from the 2021 Innovation Awards available at this link. Additionally, using the SAP API Business Hub you can instantly experience any API that you are interested in. You can test APIs using a sandbox system, having pre-populated data already configured for all APIs (REST and OData) and enabling you to observe the response provided by that API. In this web application you can also explore workflow service, entitlement management, marketing cloud and integration content, events, CDS Views, document compliance and much more. This is a fantastic resource to discover all the possible integrations available between SAP and third-party products.

About the Author

Dr. Sally Eaves is a highly experienced Chief Technology Officer, Professor in Advanced Technologies and a Global Strategic Advisor on Digital Transformation specializing in the application of emergent technologies, notably AI, FinTech, Blockchain & 5G disciplines, for business transformation and social impact at scale. An international Keynote Speaker and Author, Sally was an inaugural recipient of the Frontier Technology and Social Impact award, presented at the United Nations in 2018 and has been described as the ‘torchbearer for ethical tech’ founding Aspirational Futures to enhance inclusion, diversity and belonging in the technology space and beyond.