API Economy: 2016 Horizonwatch Trend Brief
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The document provides an overview of the API economy, defining APIs and discussing their role in transforming business models and industries. It highlights four key trends for 2016: APIs driving digital transformation, being treated as strategic assets, becoming software products, and the growing need for security due to IoT. Additionally, it addresses adoption challenges such as API authentication, lack of data interoperability, cultural resistance, and poor customer awareness.
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API Economy: 2016 Horizonwatch Trend Brief
- 1. © 2016 IBM Corporation IBM Market Development & Insights Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution. The API Economy IBM HorizonWatch 2016 Trend Brief – External Version Bill Chamberlin, Principal Client Research Analyst / IBM HorizonWatch Community Leader May 9, 2016
- 2. © 2016 IBM Corporation IBM Market Development & Insights Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution. About This HorizonWatch Emerging Trend Brief 2 The API Economy: HorizonWatch 2016 Emerging Trends Brief (External version)09May2016 Purpose: The slides provide a quick overview of the API Economy trend. The slides provide summary information, a list of trends to watch and links to additional resources How To Use This Report: Use these slides as a learning document and a springboard to further research and reading on this trend. You may want to view the slides in slideshow mode so you can easily follow the links Available on Slideshare: The latest version of this file (and other HorizonWatch Trend Reports for 2016) will be available publically on Slideshare at http://www.slideshare.net/horizonwatching Please Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution.
- 3. © 2016 IBM Corporation IBM Market Development & Insights Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution. Defining the API Economy market Definition: An Application Programming Interface (API) is an intermediary that allows application programs to communicate, interact, and share data with various operating systems or other control programs. The API Economy describes how development and use of API’s can transform business models and transform industries. 3 Enabling Technologies: • Integration as a Service (IaaS) • Representational State Transfer (RESTful) services • API management • Cloud Orchestration • API Software Products “Application programming interfaces (APIs) are bits of code that can integrate clouds and mobile devices; extract knowledge from social networking; and make productive and profitable use of the Internet of Things. .” IDC: The API Economy: How Bits of Code Empower Business Relationships Source: MD&I, Technology Business Research “APIs are one of the fundamental building blocks on which the Internet of Things will succeed. We see our customers gaining efficiencies and cost savings with the Internet of Things by applying APIs.” - Raine Bergstrom, General Manager, Intel Services “Whether the need is process optimization, new revenue streams, Internet of Things (IoT), predictive analytics, or something else, APIs facilitate exchange of diverse information and business process flows within and between organizations.” Forrester: Sizing The Market For API Management Solutions 09May2016 The API Economy: HorizonWatch 2016 Emerging Trends Brief (External version)
- 4. © 2016 IBM Corporation IBM Market Development & Insights Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution. The API-economy: 4 trends to watch in 2016 1. APIs drive digital transformation. Enterprises use API’s to interface with service providers, partners, and customers to deliver (and receive) innovative new digital services and data 2. APIs treated as strategic assets. Since APIs expose data, services, and transactions, they are beginning to be looked at by enterprises as assets which can be reused and help drive innovative new processes, products and services. 3. APIs are becoming software products. Enterprises look to productize their APIs, rather than developing single-use APIs that solve only immediate problems. Enterprises use APIs to solve a variety of problems and generate new digitally-driven revenue streams 4. IoT exposes need for focus on security. APIs will be a critical component for addressing new challenges around efficiently and securely attaching IoT devices to connected environments. 4 09May2016 SmartBear: The State of API Survey Report 2016 “By 2018, at least half of IT spending will be cloud based, reaching 60% of all IT infrastructure and 60-70% of all software, services, and technology spending by 2020.” IDC: IDC FutureScape: Worldwide Big Data and Analytics 2016 Predictions Forbes: Don't Get Ubered: APIs Hold Key To Digital Transformation The API Economy: HorizonWatch 2016 Emerging Trends Brief (External version) Source: IBM MD&I, TBR, Inc.
- 5. © 2016 IBM Corporation IBM Market Development & Insights Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution. The API-economy: Adoption Challenges API authentication. API standards exist to some extent, but many APIs were built prior to the existence of said standards. As such, these older APIs may have their own form of authentication, meaning that they require more effort around integration and require high levels of ongoing maintenance. Lack of data interoperability across systems. The inability to synchronize data between different systems presents challenges due to the various standards around the types of data allowed. These challenges can exist around date and time stamps, allowed number or characters, requiring data to be normalized for multiple interfaces. Cultural and institutional resistance to APIs due as a result of poorly defined business cases. Leveraging APIs often requires the sharing of IP and related assets between organizations. This push to share IP or assets is often met with resistance, especially if the business value of the APIs are not clearly defined to all parties. Poor customer awareness. API developers that are launching externally-focused APIs often times have problems with branding, because APIs are treated as an IT backbone and not a marketable offering. As a result, these organizations face challenges stemming from limited awareness around the economic merits of APIs. 5 “The biggest mistake we see AD&D pros make is to think of APIs only as a technical strategy for application integration and mobile apps.” Forrester A Developer's Guide To Forrester's Strategies For API Success Layer7: API Security and Management Today (Infographic) 09May2016 ProgrammableWeb: 8 Real World API Strategies and The Keys To Their Success The API Economy: HorizonWatch 2016 Emerging Trends Brief (External version) Source: IBM MD&I, TBR, Inc.
- 6. © 2016 IBM Corporation IBM Market Development & Insights Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution. Selected links to additional resources • Forrester: The API Management Solutions Market Will Quadruple By 2020 As Business Goes Digital • PCmag.com: Definition of: API • Techtarget.com: API economy (application programming interface economy) definition • Deloitte: API Economy: From systems to business services • ComputerWorld: Enterprises and the API economy: How to create an API program • Mashery.com: Four Key API Trends For The Connected Decade • Builtinaustin.com: 3 API trends shaping the future of apps • David Cummings: 5 Challenges for Automation in the API Economy • IT Business Edge: IBM Looks to Accelerate Growth of API Economy • Accenture: API Maturity Model 6 “APIs started as enablers for things companies wanted to do, but their thinking is now evolving to the next level. APIs themselves are becoming the product or the service companies deliver.” - Jyoti Bansal, Founder and CEO, AppDynamics “The more I talk to people about APIs, the clearer it is that public APIs are waning in popularity and business opportunity and that the internal use case is the wave of the future.” - Daniel Jacobson, VP Edge Engineering, Netflix Michael Yamnitsky (Forrester): The API Management Solutions Market Will Quadruple By 2020 As Business Goes Digital 09May2016 The API Economy: HorizonWatch 2016 Emerging Trends Brief (External version)