Technology is evolving at a breakneck pace these days, and established companies across the spectrum are struggling to keep up. Just trying to integrate old systems with new processes is costing businesses upward of $ 590 billion per year.
But where larger companies have failed to keep up with the times, startups are utilizing the internet to find cheaper methods of running their production and sales cycles. Processes that once took years now take mere months — or, in some cases, hours.
One of the most powerful catalysts for this new kind of change is through APIs (application program interfaces), an intuitive approach for businesses to collaborate by making the exchange of information accessible and easy to accomplish. By utilizing these programs pulled from the web, companies can create their products faster without having to reinvent the wheel.
2 Steps Forward, No Steps Back
Imagine you’re looking to create the next big driving app. Instead of starting from scratch and discovering an entirely new method of GPS navigation, a simple search could lead you to Google’s API for its Maps program. One quick purchase and your team is 1,000 steps closer to crafting the app of your dreams.
In essence, APIs work similarly to a wizard’s spell book, allowing others to utilize previously created workarounds for common issues. A company provides an online-accessible API to the world so other companies can tap into their expertise, all for a small fee. With APIs in hand, startups can skip over tough hurdles and focus on the elements that make their offerings unique.
APIs today are offered by Salesforce, Expedia, Google, eBay, and thousands of others, accounting for huge income streams. In Expedia’s case, APIs account for a whopping 90 percent of the company’s revenue. Through their APIs, these companies allow third-party entities to leverage the functionality of these platforms, whether for booking flights, running auctions, mapping, or many other uses.
Picking the Right API
Of course, as with any bounty of technology, selectivity is important. Wait too long to adopt APIs into your business — or choose from less reputable sources — and you can be saddled with an obsolete API before you even launch or end up relying on one that’s not 100 percent available.
That’s because technology changes quickly. In 2013, Facebook spent a reported $ 85 million on Parse, a vendor that provided APIs for mobile applications, only to shut it down in 2016.
So if you develop an application, use API shortcuts and get to market soon. But plan alternatives or abstractions that will enable you to quickly pivot from API vendors when inevitable disruptions come. Making these choices is not always easy because the world of APIs is new and still evolving.
One exciting example of this is IBM’s Watson project. Watson — most famous for winning at “Jeopardy!” — is an artificial intelligence system that IBM has decided to open up to worldwide use through APIs. As this powerhouse of a machine can help companies sort through masses of data, one can only guess what exciting applications will soon be based on Watson’s artificial brainpower.
Making Sense (and Cents) of the API Economy
As new applications carve niches in the business ecosystem through APIs, it can feel hard to keep up with the pace of change. But it’s also a time rife with exciting opportunities. Keep these points in mind to help ensure you’re properly navigating the uncharted API waters:
1. Look for “square one” solutions. Plenty of companies have built a store, a chatbot, or a map, and many are eager to reduce your basic tech overhead so you can get up and running quickly. If you are building a mobile app, check out BaaS platforms, such as Backendless, which let you set up shop easily with back-end scalability. Most platforms start free, reducing financial burdens at prerevenue stages. For error reporting, check out the Fabric APIs and SDKs, such as Crashlytics. For simpler user account login processes using SMS notifications, consider the Digits API and SDK (because simpler registration means higher adoption rates).
2. Keep your market in mind. With so many APIs available, it’s easy to get distracted by shiny objects that don’t directly apply to your needs. For example, market geography matters. If you are aiming outside the U.S. and you need telephony services or phone numbers, choose APIs from a company that supports more than U.S. numbers.
3. Go multimedia. APIs are not limited to text, and it’s good to think in terms of new ways of sharing information and content. For instance, might your company benefit from video conferencing? Then, be sure to check out WebRTC-based APIs for video conferencing, such as OpenTok, Vidyo, or Surf.
With APIs, the sky truly is the limit. It will be fascinating to see how partnerships between companies — melded through APIs — will bring new technological solutions to market in the next few years. Being agile in this space, and savvy with adopting the right vendors at the right times, will make all the difference in this new API economy.Business & Finance Articles on Business 2 Community