The API Economy
You hear a lot about the digital, online, cloud, and app economies these days. Business analysts, journalists, and bloggers have successfully used these terms to describe the transformation that has been occurring over the last 25 years via the web. This builds on traditional notions of what the word “economy” means, working to shape how business is both perceived and conducted in an increasingly digital landscape.
According to Wikipedia:
An economy is an area of the production, distribution, or trade, and consumption of goods and services by different agents. Understood in its broadest sense, the economy is defined as a social domain that emphasizes the practices, discourses, and material expressions associated with the production, use, and management of resources.
Every major economic shift of the last 25 years has had APIs at the heart of it—from e-commerce, to the cloud, and across social networks. APIs are used to define “the production, distribution, or trade, and consumption of goods and services by different agents.” This reveals that as you peel back each layer of the new digital economy, looking behind the device, social, and cloud layers, it is all really just about the API economy.
What is the API economy?
The API economy is how “the production, distribution, or trade, and consumption of goods and services by different agents” occurs on the global internet. APIs are defining the economy by facilitating “the social domain that emphasizes the practices, discourses, and material expressions associated with the production, use, and management of (digital) resources.” The API economy is SalesForce redefining how we build relationships with our customers. The API economy is Amazon redefining what commerce is all about, while also changing how the rest of us do business by introducing us to the cloud using APIs. The API economy is Twitter and Facebook forever changing the geopolitical landscape. The API economy is how Google re-imagined, then came to dominate online advertising.
APIs are the product. APIs are also how you develop, market, and deliver these digital and increasingly physical products to your customers. The API economy isn’t just the latest iteration of how we talk about the same old economy in digital terms, it is increasingly what shapes how we see the economy, and powers how we experience it in our personal and professional lives.
How to participate in the API economy
You participate in the API economy by leveraging simple web APIs to deliver the digital resources you need across desktop, web, mobile, device, and network channels. By actively defining each of your enterprise capabilities as individual web APIs, and orchestrating with them across your internal, partner, and public lines of business, you are playing an active role in the API economy. If your business depends on SalesForce, Amazon, Google, Twitter, Facebook, LinkedIn, GitHub, Microsoft, Dropbox, and other leading technology providers, you are participating in the API economy. The API economy is pushing you to rethink how you define and deliver the products and services you offer, and how you purchase and use the products and services of others.
You are already a participant in the API economy, and may be just beginning to wake up to the important role APIs are playing across your operations. Now you can begin to think differently about how you will conduct your business—getting more organized and strategic about the role you play in the slice of the global economy you currently operate, as well as the additional slices you ultimately desire. You are finally realizing that participating in the API economy isn’t a choice, it is an imperative, and something you either do well, or not so well.
How to lead in the API economy
The companies who are dominating the conversation across almost any industry have been actively investing in their API infrastructure for some time now. This has allowed these organizations to redefine the products and services they offer, continually and perpetually innovating, pivoting, and staying ahead of the curve using internet technologies.
Leading in the API economy begins with knowing what all of your digital capabilities are, while also being agile and efficient at making them available internally, and externally with selected partners. It is ensuring that every bit of data, content, and algorithmic resource you posses is right at your fingertips, accessible across teams, and able to quickly be put to use in any application or system within minutes. This allows companies to quickly and efficiently leverage all available resources—in a secure way. Organizations can not only conduct business faster, they are also able to rapidly redefine, pivot, and evolve resources to meet the ever shifting demands of the global economy. This can mean responding in small meaningful ways with individual APIs, or at scale by being able to efficiently collaborate, coordinate, and orchestrate across internal and external teams using hundreds, if not thousands of unique API resources.
The API economy is all around you
Your view of the landscape depends on how long you have been tuned into what is going on. What the API economy means to you will be perpetually shaped by your own API lifecycle, which determines how efficiently and effectively you define, develop, deliver, and operate your APIs. Your understanding of the API economy will continually be expanded upon based on the number of third party APIs you are exposed to, and how efficiently you are able to put them to work across your own operations.
The API economy is all around you, within your corporate firewall, and beyond its edges, shaping how you conduct business each day. APIs are the key to being able to successfully leverage the next frontiers in business, like voice-enablement, machine learning, and the Internet of Things (IoT). The health of your API ecosystem will continue to define how your organization operates on the web, as well as in the real world. However, APIs are also perfectly content at being the silent driver behind everything happening in business today, so it is likely that the global economy will continue to be shaped by two forces, those who know about APIs and effectively use them, and those who do not—leaving the API economy indistinguishable from just the plain old economy most of us have always known.