The API economy delivers limitless possibilities

This is the conclusion of our series What Are APIs and How Do They Work?

Making certain functionality--be it the results of a database query or interactive functionality like a map--available via API dramatically changes the way that software technology and information can be delivered to the market. In the 1990s, for example, an organization that wanted to run a customer relationship management (CRM) system had to lay out huge expenditures on software, hardware, CRM specialists and training. But, using the power of the cloud, CRM providers like Salesforce.com completely disrupted that model. Instead of the traditional, expensive approach--whereby a CRM vendor sprinkles hundreds or thousands of stand-alone installations across all of its customers--Salesforce.com essentially has one installation connected to the Internet that all of its customers share. This idea of sharing a common infrastructure across your customers is called multi-tenancy. 

At first, the customers of Salesforce.com used their Web browsers to access and share the CRM provider’s common infrastructure. But it wasn’t long before those customers were granted API-level access to Salesforce.com’s functionality. This enabled customers to incorporate key pieces of the CRM system’s functionality--for example, the ability to look up a customer’s history--directly into other applications. Salesforce has reported that more than 60% of all the transactions with its application tier are API-driven transactions. In other words, more than 60% of the transactions that traditionally would have happened through Salesforce.com’s browser-based user interface are instead happening in the context of non-Salesforce applications that take advantage of the data or functionality in Salesforce.com by way of API. 

For Salesforce, the implications of this trend are quite staggering. But the implications in terms of the role that APIs are beginning to play when it comes to the delivery of technology to the market are even more staggering--and the impact that cloud-based multi-tenant systems are playing in the arc of this trend is equally significant. As a result, thousands of companies and organizations are pivoting their strategies to deliver their value propositions as technologies via API. Further, hundreds of companies that offer only technology via API are spinning up. 

IBM, for example--a company that once depended almost completely on the on-premise installation of its technology—has amassed a portfolio of cloud-based technologies that it’s commercializing and delivering to the market via API under the Watson brand. In the first quarter of 2015 IBM enhanced that portfolio by acquiring AlchemyAPI, one of the new breed of smaller, API-only companies.

The API economy now spans thousands of API-providing companies across hundreds of categories. Within each category there are multiple offerings, all competing for the affections and money of third-party developers--any one of which could unleash the next API-consuming Zillow, Instagram or Uber. 

We at ProgrammableWeb track as many APIs as we possibly can in our API directory, categorizing them according to any number of the hundreds of the categories that we’ve observed over the years (such as Payments, Social, Weather, Mapping, Government and Cryptocurrency). Not a day goes by that we don’t discover another bunch of APIs to add to our directory, and we’re identifying new categories of APIs all the time.

And that’s just the APIs that are in plain sight. There are some APIs that we haven’t yet discovered but that are available from across the Internet, but there are other, private APIs that live on corporate networks belonging to companies that are very forward thinking in their application development methodologies. While they are not making their APIs available to third-party developers, they have recognized the power of loose coupling and componentization that APIs make possible. These companies are reaping—or will surely one day reap--the benefits of moving to an API-driven business.