An Application Programming Interface (API) is a set of computer functions to access data and features for apps and operating systems. Understanding how APIs work allows you to take advantage of them for your business and drive your growth forward.

The Internet of Things (IoT) is growing at a rapid pace, and the API economy is also in overdrive. By 2030, experts predict 25.44 billion devices will connect to the IoT. No matter where you are in the automation of your business, understanding the API economy helps you thrive.

APIs allow one piece of software to talk to another and share information and processes. Examples include a pizza place partnering with Uber Eats to expand delivery or Amazon using streaming to provide its service. It seems every type of business today taps into the IoT somehow and uses software to communicate.

The best way to get a feel for the API economy is by looking at some common industry terms. Below, we’ll outline some of them and describe what they mean for your business.

1. API Call

An API call is a request to an API. A call could be reflected by an action the user takes. For example, if someone downloads a new app, inputs their information, and hits the submit button, the application may utilize an API call to send and retrieve data.

It’s impossible to calculate how many API calls there are across the IoT in a given day. In Google’s State of the API Economy 2021 report, experts found 75% of organizations are working on digital transformation and investing heavily in adding new apps and refining their online presence.

Calls to web APIs are typically HTTP requests, but other protocols may be used too. As more devices tap into the IoT, the number of calls grows exponentially from billions to trillions to quadrillions.

2. API Gateway

Managing an API requires software to consume requests and process them via a specified architecture. The gateway is the entry point into the system and communicates what the user wants to the database.

An excellent API gateway design does the work of identifying the best path to the data and figuring out how to translate it for the end-user. The gateway receives the request, determines the best route for the function, combines any needed services, and offers a seamless experience. An API gateway may also be responsible for throttling, rate limiting, and authentication.

One example of an API gateway is Zuul, Netflix’s API gateway. Since a user might access their account via a cellphone, computer, or smart TV, the gateway determines what devices are connecting to the service and if they’re authorized before pulling up the best experience possible for the user based on the platform.

3. Idempotency

If you read online blogs and tech articles, you may have seen the term “idempotency” crop up. Idempotency essentially means returning the same or similar results across devices and requests. APIs should present consistency for the user.

Idempotency is related to commands tied to HTTP and servers. If someone punches in the same thing more than once, they should get identical results every time. That includes visiting a website from Chrome and later through Safari.

The requests typically tie with changes made on a server. Some HTTP methods are idempotent, and others are not. For example, unless there is a server change, a request using GET should return the same information with every request. However, functions that utilize the POST command may produce different results.

4. Transport Layer Security

Transport Layer Security (TLS), which evolved out of Secure Socket Layer (SSL), ensures data moves across the internet safely to avoid cyberattacks. Unfortunately, many API developers don’t track their usage data or connections.

Failing to protect your information leaves it vulnerable to attack and puts users at risk. API developers must ensure they update their coding with TLS and teach their staff how to keep logins and data secure.

5. Cache

The term “cache” applies to more than API development. A cache is stored information that speeds up processes. For APIs, caching could help users tap into third-party applications directly from your website. One example might be a local orthodontist that pulls up Google Maps to show where their office is.

Instead of the computer trying to find the same results repeatedly, caching speeds things up by locating them from previous applications. API responses can be cached to pull up results at lightning speed.

6. CORS

Cross-Origin Resource Sharing (CORS) allows allocating scripts of different origins. Some websites use a security protocol of only same-origin resources. The problem is it cuts down on the scope of what applications can do.

With CORS, a web app can run on one domain and access information and processes from another origin while still keeping the system secure. Current browsers support CORS. Only outdated versions won’t allow and might throw up a security notice or error.

7. CRUD

When you hear the word, you might think of something messy or dirty, but in tech lingua, CRUD is an acronym for Create, Read, Update and Delete. CRUD covers the different functions an application needs to be capable of. For example, a gift list app must create new entries, read existing entries, update old options, and delete items. At the most basic level, most apps handle CRUD abilities. If not, then the application likely does not offer full read/write access.

8. Facial Recognition

Advanced software comes into play in facial recognition technology by using sophisticated cameras and Artificial Intelligence (AI). The process begins with a database of faces. When someone tries to use their face for entry into a building or their device, the computer communicates with the database and scans through known faces to find a match.

Governments around the world keep extensive collections of face images. Private companies such as Facebook and Apple also store images to use with facial recognition programs. The device’s cameras must measure various proportional angles and run them through the database to find a match.

9. Business Intelligence

Business intelligence (BI) uses databases and combs through the information to produce reports. Companies can use these findings to make decisions based on hard facts rather than gut feelings. Computers comb through the data in a fraction of the time it would take a human to collect and process it all.

Industry leaders know 80% of the work in creating an impactful dashboard depends upon organizing the data. With BI, the user simply looks through multiple sources, collects key performance indicators (KPIs), and transforms them into images and charts.

10. HATEAOS

HATEOAS stands for Hypermedia as the Engine of Application State and is a requirement for proper REST architectures. HATEOAS lets the API consumer user navigate to a new location via hypermedia links.

When designing a REST API, HATEOAS is a constraint guiding the user through the potential allowed actions. It speeds up the configuration for the developer and returns dynamic information. For example, you might use HATEOAS for an eCommerce site. You will need to know the API to code possible user interactions and figure out what the user can access.

Other Terms

These are just a few terms needed to understand the API economy. Each business has different needs, and the ways the IoT and tools are used to help customers may vary.

There are many other important terms in the realm of API design, such as REST, OAuth, headless, microservices, and others. There is also a slew of industry standards and business model terminologies to understand.

As technology advances and the API economy grows, expect new software, updated methods, and faster access to BI. Take the time to learn features as they come out, and pay attention to your competitors’ APIs. With a bit of help from developers and a creative solution approach, your business can benefit from APIs.