Five questions to ask before designing and deploying an open API

Open APIs require as many resources as building an application or a product. In other words, it has to be worthwhile for the business.

There's been a rising chorus of debate lately about the roles and value of open APIs, which are intended to project an organization's data or services to broader audiences. Some prominent companies, such as ESPN, have announced they were retiring their public open APIs, while others are intent on building out new business opportunities with their APIs.

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Photo: Joe McKendrick

As with any breed of software and services, enterprises need to carefully deliberate the business purposes of the open APIs they intend to design and provide to the outer world. Business value needs to be the guiding force behind any open API implementation.

In a recent post at ProgrammableWeb, Mark O'Neill, vice president of innovation for API and identity management at Axway, offers up some key questions that need to be addressed to determine if it's worthwhile to to offer these services to the wider public:

Who is the audience? API designers need to understand the ultimate consumers of their service, O'Neill says. Typically, there are two groups likely to adopt an API: "LSUDs (large sets of unknown developers) and SSKDs (small sets of known developers)," he says. A public API with a one-size-fits-all request/response model is best suited for LSUDs, while a private API is best suited for SSKDS.

Is the business model and industry a fit? It seems just about every industry is or will be using open APIs in some capacity. O'Neill cites Gartner, which recently predicted that "50 percent of B2B collaboration will take place through APIs by2016." The challenge is that every industry has different approaches and requirements. Some have intense regulatory requirements, while others are fast-moving.

Are the rewards and challenges considered? API initiatives should be undergo a cost/benefit analysis. O'Neill cautions, however, that this is an inexact science. "In some cases it is difficult to determine the benefits of a public API without launching one and seeing how the market reacts and its needs evolve." Still, he adds, "the development and support costs (not to mention legal) for an API are not a minor thing." APIs should be "treated like standalone products," he advises.

How ROI be measured on APIs? As with the cost/benefit analysis, determining return on investment for an API is still something people are still trying to figure out. "Measuring ROI on an API is not a simple calculation and requires you to consider everything from the pricing of the API, which in many cases will be free, to how it could impact your business strategy -- will it help you enter new markets, reduce the time of onboarding new sellers,collaborate more effectively with partners, or establish a new business model?"

What is the partner strategy? An open API may help strengthen services to a partner ecosystem or supply chain. Private APIs may be suitable for companies with a strong, close network of partners, while public one-size-fits-all APIs are better for companies that interact directly with large numbers of consumers.