API governance means different things to different folks. But for all intents and purposes, API governance is the intentional oversight of API design, style, development, lifecycle, and security to ensure all interfaces and their behaviors are compliant with company-wide standards and industry best practices.

Governance isn’t sector-specific. Rather, the need for API governance is more closely correlated with the organization’s size, technology portfolio, and development culture. Still, there are some clear indications of when you should start thinking about API governance.

With rapidly exploding API demands, new security risks, and new circumstances brought on by AI, API governance is a logical response in many situations. Let’s check out what scenarios can really benefit from API governance. If you find yourself in one of these situations, you probably could use a dash of it.

1. You’re API-Native From Day One

For one, API governance makes a lot of sense if you are API-first by nature, meaning you are specification-driven and probably use OpenAPI. In these environments, the clients that consume APIs expect certain requests and outputs to align with their contracts, and any difference could spell broken applications.

A strong interface culture — think the Bezos API Mandate — can benefit from API governance. As a plus, governance is easier for specification-driven environments since you can perform automatic linting to validate that new APIs — and their corresponding OpenAPI definitions — meet conventions.

2. Customers Depend On Your APIs

If your external consumers — whether they are partners, other departments, or paid subscribers — have made integrations against your APIs for mission-critical applications, then they are expecting certain standards in terms of performance, consistency, and security. Without a standard process to validate API development, you risk breaking service-level agreements.

The takeaway here is that API governance is not just for internal services. Publicly exposed APIs require the same level of rigor — if not more so — in terms of governance and should be equipped with the proper monitoring and logging to inform error diagnosis and recovery.

3. You Have A Massive API Catalog

Next, if you have multiple teams operating at a large scale with an expansive internal API portfolio, governance can introduce better consistency and discoverability across your APIs. Having an internal developer platform, for instance, can help catalog the many microservices and APIs for common functions — like authentication, payments, or shipping — as well as their documentation and ownership details.

In this way, governance helps developers discover and integrate with internal services, enhancing agility and reducing duplication. Setting standards for cataloging APIs can also benefit security postures since it reduces the likelihood of rogue APIs, forgotten shadow services, and zombie endpoints.

4. You’re Heavily Regulated

This is almost a cliché in cybersecurity to say, but needs to be said: If you are working in a heavily regulated industry, such as government, finance, or healthcare, your APIs are under far more scrutiny to be compliant. This also applies to other organizations trying to meet the litany of data regulations out there. (There’s a whole lot more than GDPR these days.)

API governance can ensure that APIs meet regulations. For instance, this could look like automatic conformance to open banking specifications to meet regional standards. Or, it could resemble requiring zero-trust design standards and auditing to ensure APIs don’t break personal data privacy laws. Regardless of the exact situation, regulations carry hefty fines for non-compliance, underscoring the business imperative to oversee APIs carefully.

5. You’re Vibing on AI A Lot

Let’s face it — AI is here to stay. 97% of developers have actively used AI coding tools at work, found a 2024 GitHub survey, and the trend is picking up steam with new AI agents like Cursor. AI is entrenched in modern software engineering, but AI-generated code has its faults. For one, it does not refactor code well, leading to technical debt.

Although large language models are improving rapidly, they still hallucinate and create error-prone code and potentially expose sensitive information. These realities should be on the minds of senior engineers and architects who want to enhance reusability and avoid risky code.

Governing API design and development is an important step to counteract the possible negative side effects of a heavy AI reliance within a development culture. This could involve scanning for unintentionally exposed secrets, tokens, or sensitive data, and setting clear determinations for when exactly reusable tools are componentized and distributed as APIs, for instance.

6. You’re Wrapping APIs With MCP

On the subject of AI, Anthropic’s Model Context Protocol (MCP) is making waves in the AI and API spaces. It’s the first industry-standard proposed open-source protocol for connecting AI agents with APIs. Although the sudden uptick in MCP servers is great for integrating AI with external data sources, it comes with certain security concerns.

MCP-based systems can suffer from injection-like attacks and are not secure by default. In the case of publicly consumed APIs, remote MCP servers especially need guardrails to prevent underlying APIs from abuse.

The great thing is that, if you have robust API governance embedded into the development culture that requires best practices like rate limiting, least privilege access, and OAuth-based access control, you are far better positioned to expose APIs to this new era of agentic consumption.

7. You Have Conflicting API Styles

Having various API formats in use is not necessarily a bad thing. OpenAI, for instance, supports everything from REST to WebSockets and WebRTC for different functions. There is a valid reason to use GraphQL at times to help streamline data retrieval, too. However, when style inconsistencies between APIs of a similar format arise, that’s when you butt heads.

Style inconsistencies across areas like naming conventions, error codes, schema structure, JSON payload formatting, and more can cause frustration for developers who just want to make a quick integration. Best practices also suggest a Similar Hallways approach, in which developer experience is consistent from service to service.

As such, having an API design style guide, which is referenceable and machine-enforceable, can do wonders to provide guardrails for developers to follow when designing new services with usability in mind.

8. You’ve Got Gateways Galore

In addition to operating with many API styles simultaneously, the average enterprise is also courting multiple API management vendors and gateways — think Kong, Gravitee, Apigee, Tyk, Axway, Zuplo, and the like.

Some of this is a result of acquisitions in large enterprises or simply choosing the right tech for the job at hand. But some of it stems from unbridled technology acquisition across departments. Allowing teams to make their own technology choices is empowering but can also lead to having to shell out to many third-party vendors — tough in today’s lean tech climate.

Better oversight and guidelines around API development could help point engineers to the best tools already available.

9. You Are Constantly Versioning

Many tech teams are moving fast, creating new API versions and deprecating others, testing new endpoints, adding new parameters, testing new filtering mechanisms, and more. But without properly governing API versioning, it’s easy to get lost in the sprawl of it all.

Change management is a reason in and of itself to consider API governance. If API versions go unseen by consumers, it could cause broken integrations. Even slight behaviors unspecified in the documentation, like processing delays, output formats, and such, could be hardcoded against, and once edited, break the client application’s behaviors.

Consider the case study of Atlassian, which has begun implementing an internal change management framework and automated governance process, which has reduced the number of partner integration incidents associated with their API integrations.

10. Things Are Drifting Away…

In the rush to deliver and update countless APIs, the industry is noticing a drift dilemma — in 2024, APIContext research found that 75% of production APIs don’t match their specifications. Other studies have found pretty nascent documentation practices.

If things feel out of hand, they probably are. When documentation is immature and incomplete, it’s a good sign that you could use a bit of API governance, at least to remind engineers to please document the great APIs they craft.

Plus: You Integrate With A Lotta Third-Party APIs

Ok, here’s the last addition to give our list’s title that cute little (+) sign. This one is a very common condition: your application uses a lot of third-party APIs.

Postman’s 2024 State of the API Report found that the average application has between 26 and 50 APIs. As a result, the practice of third-party API consumption management has sprung up in recent years.

It may be a stretch to say that managing integrations with external third-party providers counts as API governance. But, given how software-as-a-service APIs tend to often change or deprecate endpoints, edit server-level agreements, and hike prices, API consumption is becoming more of an increasingly important area to oversee to maintain stability and avoid sprawl.

Caveat Emptor: When Governance Is Overkill

Of course, there are cases when governance is unnecessary. For instance, if you are a relatively small organization operating a single API and don’t expect many ongoing changes, governance is probably overkill.

Enterprise API governance comes with a lot of bells and whistles, and typically involves setting guidelines to share across departments. If such a scale is not relevant, then you probably don’t need such a formal initiative.

The idea of “governance” conjures up red tape, and could also be used to justify a lot of unnecessary effort. Although developers often welcome guidelines to help them design their APIs, overly strict API guidelines without room for nuance or feedback could disempower and slow down the process. So, finding that balance is key and will depend on the company culture a lot.

API Governance: The Exact Process Varies

The thing is, there’s a high likelihood that your organization meets at least one of the criteria above. (Perhaps Spoiler alert: API governance applies to everyone should have been used upfront!).

Sure, API governance is a bit of a catch-all term, and how it’s actually implemented varies from organization to organization. Sometimes it realizes itself through a center of excellence, or through tooling, like internal developer platforms and linting tools.

Here are strategies that successful API governance programs at companies like PayPal, Atlassian, Netflix, and HSBC are actually using to implement API governance in practice, ranging from tighter control to greater autonomy:

• Centralized control: Delegating standards to a centralized design authority.
• Federated ownership: Federating oversight with API champions across departments who encourage API best practices.
• Individual contributor level: Setting up automated testing and design checks in DevOps pipelines.

The bottom line is that most tech-forward executives endorse API governance and see the value in it. It’s just a matter of knowing when you need it and the exact flavor that works best for your organization.