Open APIs reach new high water mark as the Web evolves

Late last week an important milestone for the Internet was quietly reached as the number of available open Web APIs crossed the 1,000 mark, according to the popular API tracking service, Programmable Web.

We are nearing the time when opening our supply chains across the Web isn't just a good idea, it will be essential for competitive survival. While still seemingly small in number compared to the number of traditional Web sites that exist, open APIs have become an increasingly vital story for Web startups and traditional firms alike to cost effectively partnership, expand the reach of their products (and especially their data), and drive their network effect deeply across the Web.

It's now almost uncommon to see a new Web product that doesn't sport a shiny new API so that other online products can integrate the pieces they like into new experiences and offerings. In short, APIs allow a Web application or online business to have thousands of points of presence in other products, instead of just one.

Though APIs were pioneered by many of the original, successful firms on the Web including eBay and Amazon, which can both cite considerable returns for their efforts, it's only been in the last couple of years that APIs have been taken seriously in a widespread way by the Web community and have become a new competency area.

In my discussions with many companies, one of the biggest obstacles to adopting APIs is a lack of understanding of what a non-visual Web presence looks like and how to build a business model around it. Business leaders are much more likely to understand investment in a traditional Web site, which they are familiar with and understand somewhat, than in an online software development kit, which is more developer-centric and which they are much less likely to fully appreciate, even though APIs can often have more strategic value than a Web site.

The good news is that emerging case studies and the impressive numbers from Amazon earlier this year are showing the the way and there has been a noticeable change in attitude and uptick in interest since cloud computing became such a big topic over the summer.

Yesterday, Programmable Web's John Musser summarized some of the more interesting findings recently as he's tracked the growth of APIs over the last few years:

• eBay’s API, the first open API of this class starting back in 2001 and now over 60% of eBay listings come from their APIs to the tune of over 6 billion API calls per month.
• The original Amazon API from 2002, the eCommerce API (now called the Associates Web Service), and today with innovative API-driven cloud services like Amazon S3 and Amazon EC2
• Salesfoce.com, the industry’s leading enterprise API and one that should make most SaaS vendors understand why they need to offer an API
• The Google Maps API which for many people is synonymous with the word mashup
• Flickr API, the inspiration for hundreds of photo mashups
• YouTube API, also used in hundreds of mashups and now nearly every online video provider has followed suit by offering APIs
• Facebook platform, whose launch 18 months ago shook-up the world of social networks and now comparable “platforms” are available on most social networks.
• Twitter, whose API does 10x the traffic of their web site

John also observes that APIs are often a me-to effect and that there is tremendous sudden activity in industry verticals as a market leader becomes particularly successful or if critical mass is reached. And it's the former opportunity to become an established leader when there's still little competition that most companies sitting on API fence will miss out on.

One of the trends we’ve seen in open APIs is that within a given market segment, once one API becomes a huge success (like Google Maps or Facebook), or a sufficient number of leaders offer APIs (like in eCommerce), that a competitive or defensive reaction occurs and soon everyone else in that sector feels like they need to offer an API. It can be a domino effect. Within a year after the Facebook F8 launch of their platform nearly everyone from Google’s Orkut to MySpace offered open APIs.

One of the many outcomes of Web 2.0 has been the recent proliferation of new distribution models to drive online products across the Web to the largest audience possible. Open Web APIs have been one of the most consistently interesting new models along with Web widgets, social networking applications, and increasingly, the re-emergence of the Semantic Web. APIs offer a cost-effectively scalable way to partner with thousands of companies that, if properly designed, drive the adoption and use of a product across the Web while continuing to drive the capture of new data and market share. I've often referred to this as Global SOA and it's just one more way that we're just now learning, after 15 years, how to use the Web effectively to compete and drive growth and innovation.

Growth and innovation are both direct outcomes of APIs since it allows others to connect their audience to your products elsewhere on the Web (growth) and it allows products and services to be re-imagined and transformed into entire new products, services, and especially mashups, using ideas from across the network. Organizations such as Mashery continue to make it easier and easier for an online business to offer APIs, though there is always concern about outsourcing something so strategic.

One other new trend in APIS is increasingly clear as well; I am seeing traditional businesses looking seriously at offering open APIs from their online offering. During my last several Web 2.0 Expo workshops I've heard from a significant number of Fortune 1000 companies that are launching APIs. Large, non-Web organizations are finally beginning to see the potential of moving behind expensive and time-consuming custom integration and moving towards an SDK that allows them to scale their partnerships quickly and cheaply while increasing the number of business opportunities they can access.

Data points on API service models

There are innumerable ways to expose an online business through non-visual services to trading partners. The best way of exposing APIs to the Web at large was less clear a couple of year ago than it is now. The perennial REST vs. SOAP debates have largely fallen by the wayside as the Web community has chosen the options that are best for them. Despite the many ways to expose APIs, the Web community has largely boiled it down to a handful of popular choices, with REST being far and away the the most popular. SOAP and the emerging JSON approach are also well represented.

APIs form the underpinning of many of the new distribution models for the Web. In order to do things like Web widgets, Social networking applications, or even the Semantic Web, APIs are required as a first step in order to connect them to wherever they are running on the Web. Even rich Internet applications require APIs in one form or another, making the next generation of Web applications driven by their creation and support. While we're still in the early days of the Web yet, some of the broad outlines for how to best leverage the network for success are beginning to become clear. We are nearing the time when opening our supply chains across the Web isn't just a good idea, it will be essential for competitive survival.

APIs can be the new lock-in as well, for better or worse. Read about Zoho's experience with Salesforce.

Are you looking at opening up your business across the Web with APIs? Why or why not?