APIs & Their Ecosystem

APIs or Application Programming Interfaces is a generic term for pieces of software code that allow software applications to communicate to each other. For the purpose of this article we will use it to represent specifically the web based APIs that return data in response to a request made by a client application such as a mobile app. They are the means through which various mobile apps, websites and desktop applications connect to each other and become players in what has come to be known as the “Platform Economy”.

In contrast to software or websites that are finished products that gets consumed by end users, APIs provide an avenue to sell independent pieces of functionalities that get consumed by systems which in turn aggregate such functionalities to form an end-product. For example, we use apps like Uber to book a cab and in the process use maps in built in the app. Does Uber need to build the entire map functionality that Google Maps provide? The answer is No. Thanks to the map API that Google provides Uber does not need to build the functionality itself. It can simply rely upon the data from Google and show it in its own app. Thus Uber can now focus on its own core competency of driver aggregation and let Google take care of maps. Google on the other hand ends up getting paid each time someone books a cab from Uber for the use of its map API. APIs are hence unlocking the enterprise value of erstwhile embedded functionalities and in the process also encouraging reuse of technology across companies.

Web based APIs that use the Representational State Transfer or REST technology are called Restful APIs. This has become the technology of choice for most companies nowadays as it is more bandwidth efficient than previous technologies such as SOAP and also align better with the cloud based scalability due to its stateless nature. A stateless component can scale infinitely to handle any load and can also be easily redeployed on failure. Many now consider REST APIs as the backbone of today’s internet.

OpenAPI a.k.a Swagger is a specification for defining RESTful APIs and is fast becoming the de-facto standard for API definition and is supported by all major tech companies as well as cloud providers such as AWS and Azure. The OpenAPI standard is a significant aspect of the Platform Economy as it provides a uniform mode for communicating the functionalities of an API. It is akin to product packaging in FMCG or a user guide in the Consumer Durables sector. Not only can the developers understand the functionalities on offer through the OpenAPI documentation, they can also readily test the APIs using the Swagger UI that gets auto generated based on the definitions. They can thus decide to buy the best among the similar APIs on offer. Without this specification an API can probably go unnoticed or un-understood. Other new technologies fast growing as an alternative to OpenAPI are GraphQL by Facebook and Falcor by Netflix.

API Gateways act as a single point of entry for a defined group of Microservices that are exposed for use through APIs. Microservices architecture is an application development approach where large applications are built as a suite of modular service components. An API gateway generally includes features such as authentication, authorization, load balancing, billing and caching and serves the role of ensuring reliable processing of every request in a uniform manner. API Gateways such as that of AWS and Azure also provide customizable developer portal for companies who want to publish their APIs on their platform. This portal hosts the OpenAPI documentation and also a catalogue of all published APIs. It is similar to a website explaining a product and its usage and the difference is that it targets developers who would embed the APIs in their apps and not end users of the apps. These gateways also have an API Marketplace where developers can sell their APIs to other developers and the price is generally on per use basis.

A well-built and documented API is now becoming a powerful marketing tool for companies in most sectors and is no longer restraint to IT companies. In financial services sector APIs are driving the new age of innovation. UPI has in a very short duration of its existence become the mode of choice for payments as it provides a simple and uniform API that all banks can use. APIs have also opened up various new business lines for financial services companies and it is a very interesting journey that my current company too has embarked upon and I have the privilege to lead the same.

If you are a NodeJS/Java/C# developer and are interested in joining me for this journey, please direct message me on LinkedIn with your resume.