Updated May, 25 2012 at 10:59 am
Online services such as Google, Facebook, Netflix and eBay are handling billions of application programming interface (API) calls per day and some companies are accounting for billions of dollars in revenue per year via API links to their services, according to John Musser, founder of ProgrammableWeb.
Musser, speaking Wednesday at the annual Glue Conference in Broomfield, Colo., highlighted ballooning statistics his company has collected and laid out the 10 hottest trends in the open API market, including growth rates, funding, protocols, and business models. The Programmable Web maintains a database of open APIs. (See his presentation here).
"APIs are how we are going to build software in the future," he said. "We are just going to glue it together."
Musser presented his list of the Top 10 API trends, in no particular order:
- VC funds for your API
- Growth rates
- API-call billionaires and trillionaires
- API as a product
- API Business models
- Monetizing APIs
- Invisible mashups
APIs are quickly becoming a necessity for online services and for enterprises as users demand application access from anywhere with any device. That demand has fueled API growth.
An API is a set of functions that allow computer programs to talk and share data.
The Programmable Web now has 6,000 open APIs listed in its directory. That is up from 5,000 just three months ago. In contrast, it took eight years for the directory to count its first 1,000 APIs. Those numbers do not include countless private APIs that are mostly used to support mobile apps.
Nearly 15% of the 359 enterprise APIs listed in the ProgrammableWeb directory were added in the past three months.
The major difference between enterprise and consumer focused APIs is that enterprise APIs typically handle more sensitive data and transactions. In addition, enterprises need to manage and secure access to those APIs, using protocols such as OAuth.
Musser noted the "billionaires club" of API calls with Twitter handling 13 billion per day, up from three billion in 2010. During this month, Netflix is handling 1.4 billion per day and Klout an even one billion. eBay was handling one billion per day for the first three months of 2012.
And bigger numbers are on the horizon. He noted that Amazon Web Services next month will hit one trillion objects in its Simple Storage Service (S3).
Musser noted that Expedia's affiliate network counts $2 billion worth of business a year via APIs. Musser quoted Expedia executives saying that 90% of what they do is business through APIs.
Developers are demanding programmable access to the most functional parts of applications. And end-users are doing the same, although they don't really know it, as they devour Twitter-based or Facebook-based applications or, closer to the enterprise, SalesForce.com-based apps. More than half of Salesforce.com's traffic comes through APIs.
And APIs make those applications device-agnostic - smartphone, tablet, PC, DVR, kiosk, in-car computer, gaming console and other platforms.
Musser said companies are using money to incent users to build on top of their APIs.
"Once you have an API, how do you get people to build on it," he said. He pointed to Twilio and Box as companies giving developers money for building on top of their APIs. that incent developers with free trials or compensation to build on top of their APIs.
"JSON is a trend, but most people did not see that one coming," he said. "Nearly one in three APIs this year is JSON only."
He also noted that Hackathons are a popular method for rallying developers behind an API. There were 160 Hackathons in the first quarter of 2012 and last year the top prize taken home from a Hackathon was $100,000. Musser said companies such as Twilio and Stripe (online payments) think of their API as a product for developers and that companies such as SupermarketAPI (grocery industry) use the API as a brand.
In addition, Musser said multiple business models are emerging to go with pay-as-you-go (Amazon Web Services), and unit-based (Google AdWords).
"The biggest trend may be the indirect model," he said, including one-time sign-up (Jigsaw), content syndication (New York Times), and internal uses such as mobile devices (Netflix).
Finally, Musser said invisible mashups are trending, such as the inclusion of the Twitter API in Apple's iOS operating system.
The Glue Conference runs through Thursday. Follow it on Twitter at #gluecon