APIs need to be a two-way street. Not only should businesses look at consuming some of the thousands of web APIs that provide a variety of services and functions, but they also need to craft their own web APIs to extend their own services and data.
It wasn't too long ago that application programming interfaces (APIs) were the stuff only programmers could love, as they tied applications together behind the scenes.
Suddenly, they have become sexy.
That's because they now have enormous strategic value to businesses. In a new post over at the Harvard Business Review blogsite, Bala Iyer and Mohan Subramaniam explain why web APIs are hotter than hot. They deliver business growth. "APIs -- specifications or protocols for how to exchange information or request online services from an organization -- are allowing companies to grow businesses at unprecedented rates by sharing services with external firms," they state.
The authors cite examples of corporate API endeavors, including Walgreen's opening up its photo processing services to third-party developers through an API. Joe Rago, senior product manager of digital for Walgreens, shared details of Walgreen's API program with me a few months back, as part of a research report I was working on for Forbes Insights. He says he foresees more Walgreens services being offered through business coming through online third parties.To date, all of Walgreens' API programs are based upon existing lines of business, says Rago. "The key has been to think about things from the ground level with third-party developers in mind in order to fast-track any future public API programs that the company may launch."
One of the two key business benefits of APIs, Iyer and Subramaniam state, is that they open up a wealth of partnerships and collaborations. Twitter learned the value of third-parties to its brand with TweetDeck, and Google realized a huge area of opportunity with third-party developers exploiting Google Maps.
Another benefit is that "APIs allow firms to expand into markets they may never have previously considered," the authors add. They cite the example of IBM opening up its Watson supercomputer to build a following in analytics, as well as employ APIs to build relationships in healthcare.
How does one determine the businessworthiness of an API? Matt McLarty, for one, says the value of any API comes from its data. Data that remains locked away within the walls of an enterprise may have little worth -- a pile of stuff that has to be stored somewhere, at a cost. However, he continues in a post at InfoQ, "in today's increasingly digitized world, data can also be a precious asset. Data provides insights on clients that can be turned into differentiating business opportunities and new revenue streams." That new value can be realized through APIs.
"The degree to which a company's data is an asset as opposed to a liability is driven by three things: its accessibility, accuracy and applicability," McLarty explains. "Any web API provides accessibility to some data to some degree. Valuable APIs provide access to accurate data that applies to their core business."
It's about the data. It's about the services.