Spencer Nguyen - May 4, 2021
APIs are everywhere you look. As the building blocks of most digital transformation strategies, they’ve helped to lay the groundwork for integrating apps and services and can be key in modernizing legacy systems prevalent throughout most organizations. But APIs are more than just middleware. By leveraging them effectively as software components, you can open your business to new functionalities, opportunities, and revenue streams. This is the basis of the concept of the API economy – a notion that APIs can positively impact the bottom line of a business rather than merely performing a narrow technical function.
What The API Economy Means
Like the meaning of digital transformation, the API economy is loosely defined and will vary across businesses depending on their needs. Gartner Vice President Kristin R. Moyer calls the API economy “an enabler for turning a business or organization into a platform.” In practice, it’s the use of APIs to expose a business’ data and functionality in a controlled way that improves wider organizational efficiency, growth and innovation. APIs are now central in ensuring that inherent technological incompatibility is overcome and that a unified, seamless technology stack is delivered to the business.
In the past, data access within a typical business often resulted in a swathe of risks that ensured data remained siloed, remaining difficult to access. But there are ways to create and use public APIs while authenticating users and implementing other security features. Remember, it’s not just software companies in the technology sector anymore. Businesses in all sectors from e-commerce to financial services to healthcare and beyond have their hands in technology now. Competition is giving way to collaboration, and APIs become useful tools in that effort.
An enterprise that takes advantage of the digital economy opens its business models up to new products, functionalities, and microservices that weren’t available before. Things like automation, artificial intelligence, and the internet of things (IoT) become possible for even startups and small businesses. They can even monetize their APIs and share data as other organizations look to do the same. Read on for some examples of major enterprises doing just that.
API Economy Use Cases
Walgreens
Pharmacies like Walgreens were once popular places to get film developed. But now that consumers have long switched to digital, photo departments need to adapt. Walgreens accomplishes this by offering photo printing services from digital sources. But they’ve also learned to embrace APIs in their business strategy by providing integration services with social media services. The Walgreens Photo Center effectively turned itself into a platform that lets you print your favorite Instagram photos.
Uber
It’s no secret that rideshare services like Uber make use of the Google Maps API. Drivers can find fares and take them anywhere without having an extensive knowledge of the surrounding area. If they hadn’t used Google Maps for their service, Uber may have had to construct their own maps with their own satellites. This would’ve been a more costly endeavor that requires more time to get off the ground (or on the road). Because of their API usage, Uber benefits from a drastically reduced time to market, the customer experience benefits from a new service available to them, and Google benefits from turning their API into a new revenue stream.
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The Fresh Market
The North Carolina-based gourmet grocery chain is learning to embrace automation. They started by adopting production planning software that tracked food items at every stage of production. When a worker printed a label for an item, it was added to the store inventory in real time. The item would be removed at the checkout line. This software made use of an API to cooperate with the scales in each department and at checkout, all of which used different software. It then analyzes sales data and upcoming sales to determine how much of each item workers should make. Used properly, it eliminates guesswork on the part of the team, cuts down on discarded items, and helps the bottom line.
Now The Fresh Market is adopting an automated ordering system to integrate with the production planning software. This will automate yet another task and allow the teams and management to focus on other business processes and the user experience.
About DreamFactory
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If you’re ready to put together an API strategy, you’ll need to start with your own API. You can build one right now with your existing database, or learn the basics with our guided tour and sample data. Find out more when you sign up for our 14-day free trial.
As a seasoned content moderator with a keen eye for detail and a passion for upholding the highest standards of quality and integrity in all of their work, Spencer Nguyen brings a professional yet empathetic approach to every task.