The API Economy

By Khali Henderson Comments
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Khali HendersonIf you're a Gen-Xer like me, you might remember the first time you visited the World Wide Web in the early '90s. It was like a whole new magical world inside your computer. Right from your desk, you could go to the library and access tons of information, you could go to a newsstand and get the latest headlines, and you could go to a store and buy stuff and have it shipped to your house. It was a revolution in consumption of information, services and products. And, as I recall, it was a huge time suck. We all became so enamored with the experience that we never wanted to leave. Our obsession with the Web became the preoccupation of businesses, which all were clamoring to establish a Web presence and tap into this market. The Web economy was born.

Over the past 20 years, the Web economy has become a well-oiled machine. Web initiatives we once regarded with wonder, we would now scoff because of their lack of sophistication. Some of today's most successful brands — Amazon and Google — were born in Web's virtual world with no brick-and-mortar storefront to limit their reach. The Web became the laboratory for innovation; what could be imagined could be coded into Web-based applications. Both commerce and culture changed — we went from sharing music files (Napster) to sharing photos (Flickr) and videos (YouTube) and now our intimate secrets (Facebook) online. And we've all become expert at distilling our thoughts and marketing messages into 120 characters or less.

The Web economy has been world-changing to say the least. But there is another movement afoot that promises to dwarf that: The API Economy.

"If you think about the size of the shift to the Web, this is like a 10X or a 100X shift," said David Andrzejek, vice president of telco for Apigee Inc., an API management company that's one of many that see our economic engine shifting away from the Web to applications programming interfaces.

That's because unlike the Web, APIs are force multipliers.  Instead of trying to get users to a central website, you are extending your services to other websites and applications on whatever  endpoint they are using. It's the technology equivalent of bringing the mountain to Mohammed (and David and John, etc.)

An Apigee blog entry from November 2011 illustrates the shift as the difference between a company saying, "Here is a website where you can deal with us," to "Here are the APIs and now you can work with us."

A Digital Channel

An API is a programming code that allows two applications to communicate, or interface, with each other. They enable companies to expose functionality from one application into another.

A common example is integrating CRM with contact center communications in order, for example, to better manage customer interaction by automating call tracking rather that relying on people to keep manual logs.

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