Application programming interfaces (APIs) are, in the simplest term, specifications that govern interoperability between applications and services. Over the years, the API paradigm has evolved from beginnings as purpose-built initiatives to spanning entire application domains.8 Driven by the promise of new business opportunities, enterprises are increasingly investigating API ecosystems. In this Viewpoint, we discuss the challenges enterprises face in capitalizing on the potentials of API ecosystems. Is the investment in API ecosystems worth the promise of new profits? From a technical perspective, standardization of APIs and a systematic approach to consumability are critical for a successful foray into API ecosystems.
When the service-oriented architecture (SOA) concept emerged in the early 2000s, it attracted many companies that saw the benefits of bolstering business-to-business relationships via standard interfaces, often implemented via the simple object access protocol (SOAP). Later, SOA evolved into more Web-friendly technologies, such as REpresentational State Transfer (REST) that greatly simplified reusability, partly because the create, read, update, and delete (CRUD) interface was more approachable to even the most casual developers. While SOA was largely confined to the enterprise and focused on interoperability, REST APIs brought the power of reuse within reach of individual developers at Internet-scale through consumability.7 Developers now enjoyed cheap and easy access to deep computing capabilities and vast amounts of data that were hitherto hidden behind closed enterprises, driving today's surging API ecosystems. Today, organizations are heavily competing in the "API game," rapidly externalizing their business assets and hoping to vastly monetize locked up data and services.
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