Asia at the start of the API Economy curve: MuleSoft VP
By Benjamin Cher September 3, 2015
- APIs becoming the front door of businesses
- It’s a business concern, not an IT one
BUSINESSES looking to capture and engage customers need to rethink their approaches to digital and mobile, and will have to look into what is being described as the ‘API Economy.’
An API or application programming interface is a set of routines, protocols and tools for building software applications. An API specifies how software components should interact. The ‘API Economy’ itself is the commercial exchange of business functions or services using APIs.
In terms of its adoption of APIs, Asia is at the start of the journey, according to Will Bosma (pic above), Asia Pacific vice president of San Francisco-based integration software company MuleSoft.
“We’re really right at the start of the curve,” he told Digital News Asia (DNA) in Singapore.
The forces driving API adoption are similar to those driving IT (information technology) as a whole, according to Bosma.
“Mobile – every mobile app requires an API to function,” he said, adding that the other trends driving API adoption were the Internet of Things (IoT) and cloud computing.
These forces will drive and develop new business models – and these new business models will come together via APIs, he added.
READ ALSO: Retailers to spend US$2.5bil on IoT by 2020: Juniper Research
Driving business benefits
Generally however, companies do not yet understand what APIs can bring to their business, and are not wielding APIs effectively to drive business objectives.
“If a company doesn’t recognise that APIs is a business concern, as opposed to an IT concern, it won’t pay attention to it,” said Bosma.
“Fundamentally, APIs are about how you go to market, how you access new markets, how you distribute new products and services, and how you create new channels of revenue.
“These are truly boardroom issues,” he added.
APIs offers new ways for businesses to connect not just with their customers but even with other businesses, and internally with employees. “APIs are, in essence, the windows to your business,” Bosma said.
“If you want other people, consumers, other companies or even employees, to come and interact with your business, APIs are generally the front door today,” he added.
Eventually people will consume what businesses have to offer via APIs, according to Bosma.
“If you do APIs really successfully, people will innovate and create new businesses on top of [your APIs],” he said.
“Then, instead of how can you connect to your own data, apps or devices, it’s how you can connect to somebody else’s – which is the true value of APIs,” he added.
But there are challenges facing companies wanting to explore the API Economy – and one main barrier is the tendency to just leave technology to the IT department.
“What will happen is, you’ll build APIs – but not for the correct audiences,” Bosma said.
“You won’t be inviting people into your business and your APIs won’t be easily discoverable when you don’t design them with the end-user in mind,” he added.
Companies looking to take a shortcut in starting their API journey would be making a tactical mistake, he argued.
“If they think it’s just about putting a sheen on front of something that is already in existence, it doesn’t fix underlying problems of security, data governance or connectivity,” he said.
Instead, businesses need to treat the API as a product, nurturing it through the entire product lifecycle – “because that’s what it is, a product you put into the marketplace,” he said.
There are some guiding principles to the API journey: They have to be designed to be intuitive to users. An API also has to be ‘managed’ – the company must understand how it is being used, who is using it, and where it is being used from.
As for security, APIs are like any other technology initiative and should follow the same IT policies, said Bosma.
“You have to set up an architecture that lends itself to scalability and security – it’s just another level of security to consider,” said Bosma.
Companies are starting to come around to what APIs can bring to the table.
“A term that has become pretty popular among businesses is the term ‘composable enterprise’ – they want to be able to loosely couple the applications in the business,” Bosma said.
Composable enterprise refers to the ability to swap out and reconfigure the applications for business functions quickly, from the IT perspective.
The point at which businesses think of their own employees as consumers will also affect how importantly they treat the digitisation of the customer experience.
“Now we talk about building a business as a platform – instead of the old linear business model, with the raw materials at one end, and consumers on the other end,” said Bosma.
“The API conversation will just continue to increase and people will see more and more opportunities that APIs, and the use of APIs as connections, will bring to their business, both internally and externally,” he added.
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