What is Happening?
The API Economy is the growing ecosystem connected by APIs which supports a growing number of IT trends – SaaS, Mobile, IoT, Microservices, DevOps, Containers, and Cloud. The combination of these trends is forming the backbone for the impending Digital Business transformation, and is critical for achieving the context-aware, real-time IT that companies need to compete.
A new Strategic Research Report from Saugatuck entitled The API Economy: Foundation for Digital Business (1588SSR) published this week examines each of the constituent trends in the API Economy and helps explain how they are all interconnected. While many of these interconnected technologies are still nascent, 20 percent of IT leaders already believe that several trends within the API Economy will cause critical changes in their IT infrastructure within the next 2 years.
Figure 1: Impact of the API Economy
Source: Saugatuck Technology, Cloud Infrastructure Survey, April 2015, n=327 (global)
While the API Economy might still fall behind current virtualization and Cloud efforts, it is clear that IT leaders are already considering how these trends will cause their IT environments to change.
Why is it Happening?
The API Economy has grown out of the need to both integrate applications and services in the Cloud, and to provide lightweight backend services for Mobile applications. However, over the last year, it has become increasingly clear that the API Economy was also inheriting and improving on legacy service oriented architectures, as development organizations began to explore how small services available through APIs could help improve their applications, and allow them to develop and deploy new capabilities with greater agility.
Amid this, the trend toward Digital Business has also begun to flourish, and this has driven immense need to integrate data from front-end consumer systems of engagement with backend systems of record. On the business side this has been driven by the need to have a complete view of the customer, while from the customer experience side this has enabled greater context awareness in applications and interactions.
Digital Business has also ushered in a greater demand for applications and services to connect to each other. End users and consumers of applications alike have increased expectations that applications will be able to communicate and share data. As a result, many software vendors have started to provide improved APIs to allow broader synchronizing and integration capabilities.
Market Impact
The API Economy has been growing rapidly over the last two years, but is still in its infancy. Capabilities and requirements are still changing very quickly, and IT leaders need to be on their toes to keep up with the pace of change. New technologies, architectures, deployment methods are all likely to emerge continually over the next few years as more and more businesses adapt these technologies to their specific needs and use cases.
Right now, API use is becoming more pervasive as a strategy to enable both Mobile and IoT environments, and as a mechanism to enable software integration. These use cases will expand however to encompass more and more use cases as organizations get more comfortable developing and consuming services. Already providers like Amazon and Microsoft are leading the way with domain-specific APIs for specialized services like Machine Learning.
Additionally, organizations will need to become more comfortable leveraging and managing services from multiple external providers. This include data exchanges with partners and vendors. To stay competitive, organizations will need to focus their service development on differentiated capabilities internally, and will be able to leverage a growing number of public APIs to handle more common cases.
Providers that want to stay relevant through this transition will need to focus on enabling their applications to both provide and consume data through APIs. End users are increasingly interested in applications and that can share their data across silos, and also be enabled to access data and services from external sources. Ensuring that applications can both consume and provide data from APIs will make users more comfortable that their applications can be flexible enough to handle IT environments which will be in transition through the balance of the decade.
Subscribers to Saugatuck research can click here to view the full 20 page Research Report. Non subscribers can purchase the report here.
Readers of this Strategic Research Report will learn the following:
- What is an API?
- What is the API Economy?
- What are some key drivers of the API Economy?
- How do we manage APIs?
- How are APIs different than Integrations?
- What is the difference between REST and SOAP?
- What are Microservices?
- How do Microservices help migrate to the Cloud?
- What does Conway’s Law tell us about Microservices?
- How does DevOps pave the way for the API Economy?
- How do containers change the way software is deployed?
Providers mentioned in the report include:
3Scale, Akana, Amazon, Apigee, CA, CoreOS, Dell Boomi, DigitalML, Docker, Google, IBM, Informatica, Intel, Marketo, Microsoft, Mulesoft, Runscope, Salesforce.com, SAP Sendgrid, SnapLogic, SoftwareAG.
This article was originally published to Saugatuck's Research Library, then reposted as The API Economy: New Research Report Findings on Saugatuck's Lens360 blog.
