APIs offer plenty of opportunities for direct revenue generation. With that said, the APIs-as-products philosophy can have us looking to monetize at every step, ignoring the many indirect benefits of an API-first architecture. Today, we’re hoping to curb that mentality by diving deep into five indirect benefits of building APIs, aside from straight revenue! From improved user experience to powerful developer communities, these benefits are an excellent bonus of the API movement.
A major benefit of building API-first is the significant agility it affords, both digitally and strategically. Unlike traditional applications, APIs are never constrained to just one usage pattern. Instead, they provide the basis on which to build a huge variety of applications with use cases the provider may have never even imagined. Not to mention, API-driven applications can vary not only in terms of implementational functionality, but also in terms of business purpose, depending on whether they are exposed internally, to partners, or the public. Aside from flexibility, another aspect of API-induced agility is reusability, since a single API can simultaneously power hundreds of applications.
For an example of this, consider the journey of logistics giant Maersk. According to Dave Holliday, the company’s API Platform Product Manager, Maersk’s APIs were originally built to power customer-facing web applications on their redesigned website. However, they soon realized they could expose these APIs directly to customers, enabling codeful integration with their internal systems — such as those for placing or tracking orders — and thereby vastly improving the customer experience.
Only with time did Maersk realize that these APIs could be repurposed to better serve their
“When you build an API-first product, you’re building a product for tomorrow. You’re creating a functionality — just one layer of software — that can be used for today’s purposes, but isn’t limited to them.” –IPinfo
2. User Experience
An API-first approach is bound to improve the end-user experience, since APIs encourage interactivity among both internal and external applications. This ultimately creates a stickier, more unified experience for the consumer (which is almost always a better experience) even if it doesn’t manifest itself directly within your application.
Excellent examples of this phenomenon can be found all over the banking sector. Financial services have long been separated across multiple platforms, forcing users to log in to separate interfaces to see their mortgages, credit cards, and bank accounts. With the help of APIs, though, banks now have secure and reliable data pipelines through which to expose this information in single applications. A budget tracking app, for example, could leverage this to automatically import users’ transactions from supporting banks, greatly improving the user experience both within the context of those banks and the external app.
Building API-first encourages you to adopt industry standards since effective machine-to-machine communication is predicated on standardized protocols and formats. In turn, standardization has its own benefits: it prepares you for industry regulation and enables interoperability. In cases where standards are not yet established, APIs drive their creation, thereby benefiting the industry as a whole.
A prime example of this is the Fast Healthcare Interoperability Resources (FHIR) standard in the healthcare industry. Conceived as early as 2011, the United States’ Office of the National Coordinator for Health IT is now pushing to mandate this standard for healthcare APIs. As a result, API-first healthcare organizations that followed the development of this standard — and chose to implement it — will be ideally positioned for this change.
Another significant benefit of building your organization around APIs is the potential for partnerships both big and small. A popular model for API-based partnerships is the marketplace, where a platform allows partners to build and distribute custom add-ons that directly augment the platform itself. Another model involves sharing select data through partner APIs with a common, collaborative goal.
There are hundreds of examples of thriving marketplaces built on APIs. One particular example that’s commonly referenced is the Shopify App Store, where Shopify has enabled partners to greatly extend their eCommerce platform through their APIs.
In addition to enabling direct partnerships, outwards-facing APIs naturally lead to the inception and growth of self-sustaining developer communities. These communities, which are built around the value of the data and functionality exposed in your APIs, can arise with both public and partner APIs. They provide direct value to organizations in the form of awareness, API support, product suggestions, and more.
Recognizing these many benefits, some go as far as to build champion programs for their developer communities. In our post on models for developer programs, we cite Microsoft, Salesforce, and Docker as examples of organizations with world-renowned communities built around their API products (and champion programs to celebrate them).
There’s no denying that the potential for direct revenue generation is an excellent motivator for building API-first. With that said, there are numerous other benefits of structuring your organization around APIs, from digital and strategic agility to partnerships and communities. With any luck, the examples in this article will inspire you to reevaluate how APIs can benefit (and are benefiting!) your organization.