What Is an API Integration?

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Whether you’re working in the marketing department or the operations department, you’ve probably heard a lot about APIs and API integrations. API integration is the process of connecting different software systems or applications through their respective APIs to enable them to communicate and share data seamlessly. These have become the “buzz” terms of IT departments in recent years as more enterprises embrace the trend toward digital transformation. That being said, if you’re not a developer or don’t work in the IT department, you might not have a clear picture of what APIs or API integrations are. Here are 5 key takeaways about API integration:

  • API integrations facilitate communication between applications and underpin digital transformations.
  • APIs enable data exchange, with REST APIs being the most popular due to their flexibility.
  • Best API integration practices include prioritizing security, using standard protocols, and regular testing.
  • API integrations can be established through hand-coding, connector tools, or integration management platforms.
  • 2023 API integration trends include automation, open standards, improved customer experience, scalability, and driving business innovation.

API Integrations in a Nutshell

API integrations are the data connections that allow multiple applications or services to communicate with each other through their respective APIs (application programming interfaces). Without these integrations, the different applications, microservices, micro apps, and SaaS platforms that make up a larger application (or larger IT ecosystem) would be unable to communicate and interact. That's a general overview of API integrations. For a more in-depth understanding, we need to start with the basics and learn about APIs and REST APIs. 

What Are APIs?

APIs are sets of definitions, protocols, and commands that applications use to exchange data with each other. Each API exposes a number of services (or endpoints) for the application or service that sits behind it. Other applications can use those API endpoints to submit commands, communicate, and interact with the application. APIs generally come with human-readable documentation as well. This documentation tells developers how to code the commands and requests that their system can submit to the API to use the services it exposes. To better understand the concept of APIs, imagine that a restaurant is an application component. The waiter who takes your requests would be the API. The menu that tells you what you can request and how to request it would be the API documentation. After reading the menu (API documentation), you know what you can ask the waiter (API) to do — bring you a drink, a hamburger, etc. — and you know how to phrase the request. You don’t need to know how the restaurant (application component) operates. You can walk into any type of restaurant, quickly scan the menu, and request what you want. In the same way, developers don’t need to know how the application component operates. They don’t even have to know what kind of language the application was programmed in. They just need to know the services the API exposes and how to request those services. With this knowledge, developers can quickly write the code required for their system to interact with the API of another system. Ultimately, the code that allows one API to interact with another API is API integration. It’s important to point out that APIs are not UIs (user interfaces). UIs are what humans use to interact with applications. APIs are what applications use to interact with other applications. 

What Are REST APIs?

When it comes to the most popular web-based services and cloud-based SaaS platforms (Salesforce, SAP Concur, Office 365, etc.), these systems commonly expose REST APIs that allow other apps and systems to integrate with them. APIs that adhere to a specific set of principles and constraints are called “REST” (Representational State Transfer). In recent years, REST has become the most popular way of integrating applications. Approximately 80% of all APIs are REST APIs. REST APIs have taken the place of SOAP (an older standard that uses the XML messaging format) as the most popular type of API, and they are more flexible and easier to learn than SOAP. They also work with the widely understood HTTP protocol and use HTTP URLs instead of XML. As for their operation, REST APIs rely on the following four components: 

  • A web-based, API-enabled app or service
  • A remote server
  • A request made to the API
  • A returned function or data in response to the request

One of the most significant advantages of using REST APIs is their interoperability. It doesn’t matter what language a piece of software was written in, and it doesn’t matter what platform it’s running on. A REST API can serve as a standard interface between two systems that understand the familiar HTTP commands. In this way, REST APIs allow end-to-end communication among diverse applications through a simple, widely understood protocol. 

Best Practices for API Integration

Successful API integration is more than just connecting two systems; it requires strategic planning, careful execution, and ongoing management. To help ensure your API integration projects are successful, here are some best practices to consider.

Prioritize Security

Security should be a top priority when integrating APIs. Ensure that all data transfers are encrypted and that access to the API is protected, often through token-based authentication. Regularly review and update your security measures to keep up with evolving threats.

Use Standard Protocols

Adopt standard protocols like REST or SOAP to ensure compatibility and ease of integration. REST, in particular, is widely supported and easy to use, making it a popular choice for many businesses.

Design for Scalability

Consider how your integration may need to scale in the future. As your business grows, your API integration needs will likely change. Design your APIs with this in mind, allowing for flexibility and scalability as your needs evolve.

Error Handling and Logging

Effective error handling and logging are essential for diagnosing and resolving issues quickly. Make sure your APIs return useful error messages and that all API calls are logged for future reference.


Good documentation is crucial for effective API integration. It ensures developers understand how to use the API, including the available endpoints, the data format, and how to handle errors.

Regular Testing

Regular testing is crucial to ensure your API integrations are functioning correctly. This includes performance testing, functional testing, and security testing. Automated testing can help ensure that this is done consistently and thoroughly.

By following these best practices, you can maximize the effectiveness of your API integrations, enhancing the performance, security, and scalability of your systems.

Diagram of an API integration

API Integration Diagram

API Integrations In-Depth

As we have already established, API integration allows multiple applications to connect and interact with each other through their APIs. With this form of data integration in place, two or more applications can work together on the same tasks, integrate to form a larger application architecture, or simply sync data between each other. One of the most common ways that enterprises are making API integrations a part of their business processes is by connecting their CRM systems with their marketing automation systems. For example, an enterprise might want to integrate its Zoho CRM data with its Marketo marketing automation data. In this case, developers can establish an integration that automatically updates the data in one system when the corresponding data in the other system changes — so the data in both systems is always in sync. Developers can also use API integrations to speed up their application development projects. Rather than coding all services and features of an application from scratch, developers can focus on coding a unique part of the application, then use API integrations that integrate pre-built features into the application, thereby completing the application faster. This allows developers to build modular, microservices-based applications at lightning speeds. Ultimately, API integrations offer the following benefits when developing IT infrastructures and applications:

  • Flexibility: API integrations minimize interdependencies between system components. This makes it faster and more cost-effective to add, upgrade, and remove different services and features in response to changing business needs, translating into speedier development cycles.
  • Highly Available Systems: API-based systems make it simple to replicate different system components for redundancy. You can also use safety measures — like circuit-breaker strategies — to prevent a network service failure from cascading into other parts of a system. These benefits enable developers to build more resilient, highly available systems.
  • Scalability and Increased Efficiency: It’s easier and more affordable to scale a microservices-based API-connected system. As demands on one or two parts of the system increase, you only need to replicate and divert resources to the individual components that need them.

How Do You Build API Integrations?

There are several techniques that developers use to establish API integrations. The main three methods are hand-coding API integrations, using API connector tools, and using an API integration management platform. Here's a brief overview of all three.

Hand-Coded API Integrations

In the past, developers needed to code all API integrations from scratch. Whether connecting two APIs across an IT infrastructure or connecting multiple data sources to form a larger system, developers needed to hand-code the integrations between these components. To make matters more complicated, if the APIs for both components didn’t already exist, developers also needed to hand-code the APIs.   The problem with hand-coding APIs is that it takes a lot of time and it’s expensive. Hand-coding a single API can cost significantly more per API when compared to using an API development tool. Hand-coding an API integration can cost up to $10,000 or more, depending on the complexity of the integration. 

API Connector Tools

The simplest method for establishing an API connection is to use an API connector tool. These easy-to-use platforms (like Zapier) offer a host of pre-built API connectors for popular enterprise applications. These tools feature no-code, point-and-click interfaces focusing on workflow automation between two apps. The advantage of API connector tools is that they eliminate the need to hand-code APIs and API integrations. The disadvantage of these tools is that they don’t offer the ability to create complex workflows. Furthermore, they are not useful to developers building API integrations to form a larger microservices-based application. Here is when API connector tools are helpful: 

  • You need to set up basic workflow automation integrations across an IT infrastructure.
  • The connector tool includes pre-built API integrations for the services you want to connect.
  • Your workflow automation needs are not complex.
  • The API connector tool offers the workflow automation features you need. 

API Integration Management Platforms

API integration management platforms help developers build complex API integrations while bypassing all (or most of) the hand-coding required to make those applications. Like API connector tools, integration management platforms offer pre-built API integrations. In addition, API integration platforms exceed the capabilities of API connector tools by providing deeper functionality for more complex API integrations. They also service the microservices-based app development use case. Here is when API integration management platforms are helpful: 

  • You need to develop complex workflows between apps in an IT infrastructure. 
  • You need to integrate the APIs of microservices and other components while building a microservices-based application. 

Unfortunately, the most widely used API management platforms — such as MuleSoft and IBM App Connect — come with some serious downsides. First, they have complex, difficult-to-use front-ends. Most enterprises need a team of experienced developers with extensive coding skills and special certifications to operate these platforms. Learning these skills can be time-consuming.   Second, they are expensive to license and host. The high costs of platforms like MuleSoft and IBM App Connect are typical because they offer a wide range of services beyond API integration, such as ESB and ETL services. Because of these downsides, these traditional platforms are best for enterprises with large budgets. They are usually too expensive for small and medium-sized firms and enterprise departments on strict budgets. However, we do have some good news for firms on tighter budgets. New API integration management platforms like DreamFactory are opening the doorway to robust, affordable API creation and integration. 

It's safe to say that APIs have taken the world of information systems by storm. Entire marketplaces have opened up around APIs, and IT organizations are planning strategies around API usage and deployment. Here's a look at five of the biggest trends in API integrations for 2023: 

API Integration Automation

Automation enables employees to avoid repetition and focus on more important tasks. It's not surprising, then, that API integration automation is causing a buzz in the industry. Some functions that tech leaders hope to automate include API integration tests, API publishing, and security checks. To that end, GitHub recently announced GitHub CoPilot, an artificial intelligence API integration tool developed in cooperation with OpenAI. While the app is still early in the development cycle, its existence points toward a day when API creation, integration, and security checks could all be automated. 

Open API Integration Standards

REST APIs, SOAP, JSON, and GraphQL are all web services and API tech that have been around for a while. The years of use, and the experience of the developer community, have created a greater push toward open standards for API integration. More and more companies are getting involved with standards groups, contributing their feedback and shaping what will come to be known as the best practices in API integration. Some active groups and projects include the OpenAPI Specification, the GraphQL Specification, and the JSON Scheme Specification.  

The API Economy

When successful tech companies like SalesForce found ways to monetize their APIs, it started the talk of an API economy. In the beginning, that meant simply selling access to APIs and data. While that market segment still exists, the API economy has taken on a broader meaning. As APIs enable your business to connect with customers and other companies worldwide, they are now front and center in the world of e-commerce. Over the next year and beyond, expect to see any discussion of online commerce prominently include talk about APIs and how they will integrate with the rest of the digital economy. 

Developers Need API Integration Experience

Hiring trends in the IT space show that API experience is more important than ever. An overwhelming majority of new postings for developer jobs require applicants to have specific expertise. Code samples have long been a mainstay for developer job applications, and now it's not uncommon for hiring managers to ask for Postman scripts. API integration experience will be one of the hottest skill sets in the market over the next year, and we don't see that trend abating any time soon. 

Industry-Specific API Integrations

At the same time as the push for open API standards, industry-specific API integrations are also quickly emerging. Some of the most prominent examples are open banking and healthcare standards like FHIR (Fast Healthcare Interoperability Resources). Expect to see continued growth in these markets, along with other markets primed for their API integration standards — like supply chain and logistics, insurance, and manufacturing. Recent Advancements in API Integration Management API management solutions are becoming popular because they solely focus on API life-cycle management and API integration management. Cloud-based iPaaS solutions that offer API management enhance productivity with features like automatic API generation. This allows you to integrate new services and features into your projects in a matter of minutes. 

Benefits of API Integration

In the ever-evolving digital landscape, businesses continually seek strategies to optimize their operations, gain competitive advantage, and provide superior customer experiences. One such strategy that has gained significant traction is API integration. This technology bridges the gap between disparate systems, promoting efficient workflows, enhanced business intelligence, improved customer experiences, and innovation. This article delves into the myriad benefits of API integration, showcasing how it can be a powerful tool for businesses striving for digital excellence.

Simplifying Complex Processes

API integration plays a pivotal role in simplifying complex business processes. By integrating different software applications, businesses can automate workflows and reduce the need for manual data entry, which can be both time-consuming and prone to errors.

For example, a business could use API integration to streamline their sales and customer service processes. When a customer places an order, the sales software could automatically send data to the inventory system to update stock levels, and to the customer service software to update the customer's order history.

Enhancing Business Intelligence

API integration facilitates the consolidation of data from various sources, significantly enhancing business intelligence. Businesses can gain a more holistic view of their operations, customer behavior, and market trends, which can support better decision-making.

For instance, an API can fetch data from social media platforms, customer relationship management (CRM) systems, and website analytics tools, bringing all the data into a single analytics platform. This unified data view can enable businesses to identify patterns and insights that would be hard to discern from isolated data sets.

Improving Customer Experience

In an era where customer expectations are continually rising, API integration can be a game changer. It enables businesses to provide a seamless and personalized customer experience across multiple touch points.

For example, a retail business can use APIs to integrate their e-commerce platform with their physical stores. When a customer browses products online, the business can use APIs to check real-time inventory data and inform the customer if the product is available in a store near them. The customer can then choose to buy the product online or pick it up from the store.

Enhancing Scalability and Flexibility

API integration gives businesses the ability to easily add new features and functionalities to their existing systems. This flexibility is crucial in a rapidly changing business environment, where the ability to quickly adapt to new market trends and customer demands can be a key competitive advantage.

For example, an e-commerce business could use an API to integrate a new payment gateway into their platform, providing their customers with more payment options and enhancing the overall shopping experience.

Driving Innovation

By facilitating the exchange of functionalities and data, API integration fosters innovation. Developers can leverage APIs to create new applications and services, without having to understand the complexities of the underlying systems.

For instance, a travel booking platform could use APIs to integrate data from various airlines, hotels, and car rental services. This would allow them to offer a comprehensive travel planning service, providing customers with the ability to book flights, accommodation, and transportation all in one place.

API integration has the potential to transform businesses, offering a host of benefits from streamlining operations to driving innovation. By integrating APIs into their operations, businesses can unlock a new level of efficiency and effectiveness, positioning themselves for success in the digital age.

Finding Your API Integration Platform

Now you have a solid understanding of API integration and how developers integrate APIs to connect applications. As we've discussed, the uses for API integrations are wide and varied across an IT infrastructure or microservices-based systems. You should also understand the most popular API integration techniques and their potential advantages and disadvantages.

More importantly, you’ve learned how platforms like DreamFactory are making custom API integrations faster and a lot more affordable for budget-conscious organizations to achieve. If you’re looking for an API integration management platform that offers enterprise-level capabilities without enterprise-level costs, consider DreamFactory. We make custom API integrations easier and more affordable than ever.

As a scalable API management solution that runs in the cloud or on-premises, DreamFactory will eliminate your app integration bottlenecks while reducing costs and dramatically speeding up your time to market. Our new Citrix Workspace integration also gives developers access to instant micro-app generator features that allow you to automate the process of building beautiful micro apps with stunning UIs. Want to learn more about DreamFactory or try the platform out for yourself? Sign up for a Free Trial of DreamFactory now!

Frequently Asked Questions about API Integration

1. What is an API?

An API, or Application Programming Interface, is a set of rules that allows different software applications to communicate and interact with each other. It facilitates the sharing and accessing of data and functionalities across various platforms.

2. How does API integration work?

API integration involves connecting different software applications via their APIs. This allows these applications to interact and share data and functionalities, thereby creating an integrated and cohesive digital environment.

3. Why is API integration important for businesses?

API integration can significantly streamline and automate business processes, reduce manual data entry errors, and enhance business intelligence. It can also improve customer experiences by enabling seamless and personalized interactions across multiple touchpoints.

4. How does API integration improve scalability and flexibility?

API integration allows businesses to add new features and functionalities to their existing systems without making significant changes to the underlying infrastructure. This can make it easier for businesses to adapt to new market trends and customer demands.

5. Can API integration foster innovation?

Absolutely! By facilitating the exchange of functionalities and data, API integration can drive innovation. Developers can use APIs to create new applications and services, leveraging the capabilities of existing systems without having to understand their complexities.

6. What are some examples of API integration?

API integration is used in many different contexts. For instance, a retail business might integrate their e-commerce platform with their physical store inventory system, enabling real-time inventory checks. Or, a travel booking platform might use APIs to integrate data from airlines, hotels, and car rental services, offering a comprehensive travel planning service.

7. How can I implement API integration in my business?

Implementing API integration typically involves working with IT professionals or software developers who understand how to use APIs to connect different software applications. Depending on the complexity of the integration, businesses may also choose to use API integration platforms or middleware to simplify the process.

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