From private to public — API types from business perspective

APIs are here to stay. What is not understood widely is that APIs come in different shapes, their level of openness and purpose have flavours. This post introduces the differences between open, partner and private APIs. Open and public API seem to be difficult to understand — they are not the same. Mixing the terms in marketing most likely will backfire and damage your brand and product sales. As an example I see too often marketing department driven texts like “We have Open API” even though they have partner level API — not even public API. Ignorant clients believe the claim and buy the product. This is more common in cases when API is an add-on to the service, not a product an sich.

It is estimated that public APIs which are listed in catalogues and websites are just tip of the iceberg. Majority of the APIs are private (company internal) or partner APIs.

Lets integrate and boost automation!

Let’s start from the bottom — private APIs. This is the most closed format of providing and consuming APIs. Often private APIs are built to enhance process automation inside company between systems. In other words, this is about integration economy inside one company. Before API economy, this was the only way to consume and use APIs — point to point integrations. This world used to be based on SOAP, but now REST APIs are used as well.

Lets expand business — but with known partners!

Next level is partner APIs. These APIs are often hidden from public just like private APIs. There might be marketing sentence in website that “we have API” or worse “we have open API”, but still it’s hidden partner API.

Partner APIs are revealed to other companies with whom we are ready to build more tight connection. The other company might use some of our product data to expose our offering to their clients. Partner APIs are used with known and predicted partners — kind of safe bet. By connecting two or more systems from companies together with APIs we also connect the companies together more tightly. An example might be company — accounting company integration. At this level aims might also be process automation, minimise human errors, efficiency boost and cut back costs.

Partner APIs are used with known and predicted partners — kind of safe bet.

What these API provider should do, is to provide machine readable API spec. Why? With that partner (candidate) could generate mockup API mimicking your production API and develop integration against it. That would speed up integration and also reduce your work amount. That would move them towards openness and flexible API economy.

Finnish public sector has been going deeper to API economy for a couple of years. Our national digital backbone is based on APIs (X-Road platform) and all the APIs at that level and on X-Road are partner APIs.

Lets go public — innovate and reach out!

The third level is public APIs. These APIs are listed in catalogs and not hidden from anyone. This level includes open APIs and commercial APIs. Open API by definition is

an API whose all features are public and which can be used without restricting terms and conditions (for example, it is possible to create an application that utilises the API without explicit approval from the API supplier or mandatory licensing fees).

Open APIs are commonly selected approach in public sector. Public sector services are paid with taxes and thus it’s justified to require APIs to be open for all.

Then there are public but commercial APIs. Those are not free to use, but normally are subscription fee or pay-as-you-go business model driven. Commercial APIs (when done right) contain free tier. Free tier offers limited free use of the API. With free tier possible customers can try out your API, see how it behaves in practices, learn the features and get convinced that this solves our problem before jumping to paid plan. APIs with free tier are 3 times more likely to get paying customers.

Free tier offers limited free use of the commercial API and are 3x more likely to get paying customers that commercial APIs without free tier.

Needles to say that commercial APIs (free tier) and open APIs must be able to taken in to use by self-service. Consumers are not going to email to you to get for example documentation or API keys. They want it now! That’s where API management jumps in and provides means to satisfy customer needs without delaying and time consuming human intervention.

Public APIs enable ecosystem driven hockey-stick business growth with unpredicted partners

API management provides elasticity

Companies might start with partner APIs and then decide to make it public or revert to private. Without API management that might become cumbersome and expensive.

Move APIs from partner level to public level with a few clicks in API management.

Take into account that moves towards openness are normally favored by consumers, but moving from open to public commercial API might cause negative publicity, twitter storm and email tsunami targeted at your customer service.

Needless to say that when API is treated as a product, versioning and version management is one aspect in which API management can save your time and money. With API management you can be sure that API consumers read the right documentation for each version, run API portal, provide self-service onboarding to your APIs, 24/7 support with APIbot (chatbot consumed in Slack or any other chat based environment), instantly generated API keys, proper user management, rate limiting, and much more.

Easy to use flexible API management — free tier

Take advantage of APInf Platform free tier and bring your APIs to us! If you need help with productising your APIs or with API strategy (done right), contact me (jarkko (at) apinf.io)

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