11 Trends to Watch in the API Economy in 2023

11 Trends to Watch in the API Economy in 2023

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The API economy continues to expand. In the last years, the number of developers using APIs grew by 61%, continuing a trend we have seen for years. This, coupled with the emergence of new tools for designing APIs, has led to an evolution of this ecosystem.

To understand where we’re heading, let’s look at some key trends in the API economy and their implications on businesses today and their future. An API-driven business model is no longer just an option but a growing necessity if you want to remain competitive in today’s software landscape. Let’s dive into ten predictions we see shaping the future of the API economy in 2023.

1. More Platforms to Go API-First

More platforms will be built API-first. Many teams and organizations already embrace an API-first philosophy — two-thirds of respondents from the 2022 Postman State of the API Report survey ranked themselves as a five or higher in terms of embracing API-first. In the future, API-first will become even more popular as standardized APIs become the default choice for businesses.

Constructing the API first gives developers the chance to design a scalable and consistent platform from the start. It also provides an opportunity to create a standard API design, which can then be implemented across the entire organization. With the growth of frameworks like ReactJS, NodeJS, and Express, more and more platforms are shifting towards using APIs as their core foundation.

2. Standardized APIs Become the Default Choice for Businesses

As developers build the API first, they will naturally begin to adopt standardized API designs and implementations. We predict that standardized APIs will become the default choice for businesses, and will be seen as a standard business practice. This will mean standardizing their design, style, structure, and how they are cataloged.

In other words, standardized APIs will become standardized API designs. This will allow organizations to build and deploy common APIs that work across their entire platform, reducing the amount of time needed to integrate with their systems. And it will allow organizations to provide a consistent customer experience across all their channels, including websites and mobile apps.

3. API Security and Reliability Begin to Mature

Rapid adaption and growth of APIs have opened a new portal for attackers to exploit. A 2022 Salt Labs study found that 94% of companies experienced security incidents in production APIs in the past year. Weak API endpoints can lead to server crashes, data leaks, privilege escalation, and other threats. As such, API security is a major concern for all companies.

Since APIs are often used to transfer valuable data, disastrous effects can arise when they are hacked. To avoid these threats, developers are working daily to remove vulnerabilities and make APIs much more resilient. In 2023, we can expect new methods and standards to improve API security.

4. Microservices Adoption Will Further the Growth of APIs

The use of microservices has grown significantly in the last five years, and adoption is likely to increase further. Microservices architectures are prevalent due to their modular service design and reusability. Building microservices with an API-driven model is a natural progression.

As per a report by Allied Market Research, the market share of microservices will grow linearly. And as more businesses implement microservices, they will embrace an API-driven approach to support them. These APIs will enable the scalability and flexibility needed to support a decoupled microservices architecture.

5. Organizations Will Accelerate Their API Culture

Organizations will accelerate their API culture. As organizations begin to adopt standardized API design, they will also improve their API culture. Building API-first provides an opportunity to create a standardized API design, and fostering a culture around this development practice will help organizations improve the customer experience across all their channels.

Encouraging an API culture will help organizations follow internal best practices and increase awareness around security and developer experience. A mature API culture could also help limit API sprawl.

6. Niche APIs Become More Available

We’re seeing a trend toward more niche API-based products, which is giving developers more options to choose from when building their applications. For example, the API-First Index tracks over 70 companies offering specialized API-first products with $50 million in funding or more. This is an excellent development for the ecosystem as a whole, as it gives rise to more specialized and targeted tools that can be used to solve specific problems.

We also see a trend towards greater use of these APIs in the enterprise space. More and more businesses are recognizing the potential of third-party APIs to drive innovation and growth. This increased demand is leading to more investment in API development and management, which is good news for the ecosystem as a whole.

7. Hybrid API Architectures Emerge

Another significant trend we anticipate is the rise of more hybrid API architectures. This is due to the reality that most organizations are hybrid multi-cloud. With hybrid architectures, organizations can take advantage of the best of both worlds — the flexibility and agility of the cloud, while still leveraging their existing on-premise infrastructure. This will allow them to get the best of both worlds in terms of performance, security, and cost-effectiveness.

8. APIs Become Hyperconnected

This trend is being driven by the growing popularity of microservices and the need for greater agility and flexibility in how applications are built and deployed. As more and more organizations move to a microservices architecture, the number of APIs they need to interact with is growing exponentially. This leads to a situation where APIs are becoming hyperconnected, with each API interacting with dozens or even hundreds of other APIs.

This interconnectedness is having a number of impacts on the API economy. Firstly, it is making it more complex and challenging to manage APIs. Secondly, it is leading to the rise of new API management tools and services designed to help organizations deal with this complexity. Finally, it drives the need for greater interoperability between different API management solutions.

9. APIs and AI Will Work Together

In the future, we expect APIs and machine learning to work together more closely. This is already beginning to happen within AI-driven software development tools, but we expect it to become more prevalent in the coming years.

Building and managing an API is hard work. It takes time, skill, and knowledge that many businesses struggle to find. This is where machine learning can help. The more data you have, the more you can leverage machine learning. As such, organizations will continue to implement AI-driven models across all aspects of their business, including software development and management.

10. Streaming Is the New Event-Based

Streaming is the new event-based. While event-based architectures continue to grow in popularity, streaming will eventually replace event-based architectures as a standard for API design and implementation. Streaming has many benefits over event-based architectures that make it the better choice.

First, streaming provides a continuous, real-time flow of data, which means developers don’t have to wait for an event to occur before they can access data. Streaming also makes it easier to scale up and down to accommodate spikes in traffic volume. This is important because demand for APIs and the services they provide will continue to grow. All of these benefits make streaming a better choice than event-based architecture.

11. Rise of Conversational APIs

As we’ve seen with ChatGPT, APIs are being designed to work with natural language instead of just being a way to exchange data. This trend is also being driven by voice-based assistants like Amazon Alexa and Google Assistant. As more and more people come to expect conversational interfaces, there is a growing demand for APIs that can understand and respond to human speech.

Conversational APIs are still in their early stages, but they have the potential to revolutionize the way we interact with software. In the future, we will likely see more and more businesses adopting this technology to make their services more user-friendly and efficient. Conversational APIs are already being heavily used in the telecom industry.

Final Words

As the API economy continues to expand and evolve, businesses need to understand the implications of these trends and how they will affect them. Many of these predictions result from the growing popularity of API-driven models. And as more businesses go API-first, they will require innovative ways to manage and scale the ever-increasing volume of traffic and requests.