APIs: From developer tool to business model driver

APIs should no longer just be the concern of software development teams, Deloitte argues

"The API revolution is upon us," argues Deloitte's Tech Trends 2015 report, citing ProgrammableWeb's directory of more than 13,000 public APIs.

"The revolution is ... pervasive: Outside of high tech, we have seen a spectrum of industries embrace APIs — from telecommunications and media to finance, travel and tourism, and real estate," the report states.

"And it’s not just in the commercial sector. States and nations are making budget, public works, crime, legal, and other agency data and services available through initiatives such as the US Food and Drug Administration’s openFDA API program.

"What we’re seeing is disruption and, in many cases, the democratisation of industry."

APIs have become more than a tool for software development and become "a business model driver and boardroom consideration."

"Application programming interface is a technical term that the industry came up with when we realised that we were building really complex systems and that the reach of those systems could be extended by opening them up and allowing other programmers to access the same systems and to do things on top of those," Deloitte's Robert Hillard, who leads the company's Australian Technology Consulting practice, said launching the report earlier this month.

Although APIs are not exactly new, the conversation around them "has expanded from a technical need to a business priority," Tech Trends argues.

"As more of our businesses have more and more of our intellectual property tied up in their technology assets, what they're finding is if they expose those assets they can find third parties who they can team with who will actually develop innovative business models of their own," Hillard said.

Companies around the world are "trying to open their businesses up", Hillard said.

"Rather than keeping their data and their intellectual property closed, they can actually make it an ecosystem."

However the report sounds a note of caution: Along the way businesses need to deal with potential legal liabilities, including issues around IP protection.

There can also be cultural barriers: "Pushing to share IP and assets could meet resistance unless a company has clearly articulated the business value of APIs," the report states.

Although "entering the API economy" may seem like an "abstract, daunting endeavour," Tech Trends said there are lessons businesses can consider based on the experiences of early adopters — start with a "clear intention, a clean definition of the value, and ... clearly defined audience", developing a governance model based on the target audience, planning big but starting small, and being prepared to invest in driving awareness for external-facing APIs

"There is an element here of chicken and egg — you have to build it so they will come but you also have to experiment to encourage them," Hillard said.

"Enterprises can make some concrete investments to be at the ready" for the API economy, the report argues.

"But as important as an API management layer may be, the bigger opportunity is to help educate, provoke, and harvest how business services and their underlying APIs may reshape how work gets done and how organisations compete."

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