How to Win with APIs – Part 3

The Rise of API Management

In a previous post, I discussed application performance interface (API) strategy, focusing on an API-first approach and the importance of managing your APIs with an API hub. I also described the main building blocks for an API hub: a manager, a gateway, and a portal. But, you might ask, what exactly led to the rise of API management? And how does API management today differ from that of five or 10 years ago?

  In this post, I’ll review the API market evolution over the past two decades and how that has led to a plethora of API management (APIM) solutions. Along these lines, you’ll see that the APIM paradigm has undergone a shift of its own.

The API market shift

The start of 2020 presents a good opportunity to retrospectively assess the main market changes around API usage in the previous two decades. Have a look at the graph below.

The growth of the web for both private and business consumption—followed by the enormous big bang of mobile—exponentially propelled API consumption upward. These APIs can be characterized as lightweight: swift and small in size. Around 2010, companies found themselves inundated by a dramatically growing number of APIs. These companies realized that APIs are assets: they must be protected, discoverable, audited, and monitored. This realization led to a rapidly growing demand for APIM solutions that serve precisely this purpose: creating, managing, and controlling the APIs’ consumption.

With APIM in place, companies recognized that they could monetize the consumption of their APIs. This in turn led to the emergence of more APIM tools focused on monetization and mobile-optimization features.

By 2013, large players started showing an interest in API management, creating or acquiring new solutions. For example, here are some tools that were acquired in the past decade:

Why did Google invest in API management? Evidently, the API economy was expanding into a multibillion-dollar opportunity. Companies are willing to spend money on API management to stay competitive in dynamic markets and industries. Moreover, in certain industries (e.g. banking) and countries, legislations and regulations dictate companies to provide APIs.

I originally wanted to write about the emergence of cloud followed by the internet of things (IoT) boom and how they have affected APIs, but then I thought, maybe it’s the other way around? Maybe the very existence of APIs is an enabler or even a precondition for the astonishing technological transformations? I leave that for you to decide…

The shift in API management

To stay competitive, companies have had to go under a major transformation to handle the growing amount of data and data sources. Data integration is essential for this transformation, even more so with cloud coming into the picture, and APIs have become foundational connections. Gartner’s Business Goals of APIs in the “API Strategy Maturity Model” (see graph below) research shows integration between various platforms/apps/systems as the number one business goal of APIs. Data accessibility and interchange data/services with another company were also ranked as “Top 3” business goals.

Business Goals of APIs

Percentage of Respondents

Gartner, “Gartner’s API Strategy Maturity Model,” by Saniye Alaybeyi, Mark O’Neill, 21 October 2019

These data APIs are business-critical for organizations because they usually trigger business processes and backend transactions. As such, APIM solutions need to focus on security and protection, while introducing a rich and robust policy set, including access, authentication, quality-of-service, privacy, and threat-protection policies. And, of course—better monitoring and auditing.

Integration platform as a service (iPaaS)

The growing need for data integration and the emergence of cloud has led to the rise of commercial cloud-based solutions such as Informatica’s industry-leading iPaaS. If you look back at the API consumption graph above, you can see that the latest factor, on the right side of the curve, is APIM in cloud integration platforms. What is that exactly? Why is it needed? I’ll discuss this latest shift in API management in my next blog post. Stay tuned!

For more on API management, check out my other posts in the series: : A Successful API Strategy; and Defining APIs: Lightweight APIs and Data APIs. And stay tuned for my fourth post coming soon on API implementation and management in Informatica iPaaS.

Learn more about Informatica API management.