Kathy Gibson is at Gartner Symposium in Cape Town – Thanks to application programming interfaces (APIs), anyone can build the next “killer app” – but there’s so much more to come.
Paolo Malinverno, vice-president analyst at Gartner, says APIs are set to cause many disruptions between now and 2024.
“APIs have been around forever, and to some extent have changed our lives,” Malinverno points out. “But they are not done – actually, far from done. They are going to have some consequences for society as well.”
Anyone can create and API an an endpoint, he says. What is more interesting is what those endpoints are used for.
What APIs allow very well is scale, Malinverno adds, and they have the potential to transform whole industries.
One of the big examples will be Open Banking. Already banks have had to publish APIs into their payment systems, and they will have to open up even more in the coming years.
Malinverno explains that every single connected app on every mobile device uses APIs – as does every site on the Web tracking users or providing a rich UX, and every application deployed to or exposed through cloud services.
Whole ecosystems can develop new value chains starting from APIs on a platform.
In fact, Malinverno says, it is almost impossible to build, compose or deploy a digital solution that does not use or depend on APIs.
New APIs open new business channels, he adds. As such, they can create new value chains and drive up revenue.
To take advantage of the API opportunity, organisations should invest in innovative, digitally transformative and agile capability, headed by an API product manager. The APIs would ideally be created within your company.
There is some risk, Malinverno adds. The open business model means companies will have to work with fast-moving third-parties, so they will have to govern their usage of the company’s assets.
But companies are still missing out on a significant business multi-platform because they don’t know how to leverage an API platform.
In very few cases, companies are able to directly charge for API usage, but this is very rare and generally only when it returns data that has value itself.
Some of the barriers to API deployment are coming down, but others are going up. On the positive side, scalability can be increased, but on the negative side security for API calls could stymie growth.
Within industries, companies don’t necessarily need to own all the applications that serve their customers. This is enabled via APIs, which enable digital transformation across all industries.
Open Banking, in particular, mandates the publication of APIs to private communities of developers. There is also widespread use of APIs in government, high tech, communications and media.
Some up and coming technologies like AI, blockchain, Internet of Things (IoT) and others simply would not work without APIs.
There are hundreds of public APIs, and anyone can use them. Malinverno points out that just about anyone, anywhere in the world, can leverage them to create new interactions, by mixing public data with the functionality of several IT system.
In fact, this is the basis of most digital transformations, he adds.
There are some fundamental shifts happening in the API landscape, and software economics are changing as users are not locked into specific ways of interacting with an application, according to a predefined user interface.
APIs can be employed to open up new and highly sociable business channels. They can advance a digital transformation and entice an ecosystem of partners to sell more of a company’s products. It could even build new value chains with business partners they never knew they could have.
The consequences are quite big, though. Malinverno believes banking will be transformed, with the fact that banks will no longer own their customers just an example.
Malinverno encourages organisations to become willful disrupters, deliberately and aggressively using disruption as a differentiator for digital success.
He offers some recommendations to CIOs thinking about an API programme:
* Take advantage of the benefits of scale and new business models offered by API programs. Avoid the notion that APIs are just technology – and even if you do, you need to put an API management tool in place.
* Exploit Open Banking opportunities by embedding financial APIs into the new customer or partner interactions as per your digital transformation. This should be done no matter what your industry vertical is.
* Run a series of business-targeted, carefully planned hackathons with new and existing business partners. This could help to identify value changes that have a high business impact.
“The bottom line is: if you don’t have APIs you don’t have scale; and you cannot change,” Malinverno concludes.