The API economy is a term that was coined to describe the growth of revenue and brand engagement as a result of offering public APIs for developers. Lets examine the reasons that gave rise to the API economy.
Reason #1 Higher Demand
Historically, APIs were used to integrate different software systems or even different organizations. Web APIs are now in high demand due to three key factors: the modern browser, mobile devices, and the Internet of Things.
Years ago, modern browsers were limited to displaying content and limited scripting capabilities using JavaScript. Modern browsers have moved beyond this, allowing rich web applications to be built using a combination of HTML, CSS, and modern JavaScript frameworks. As a result, we no longer require servers to generate complete web pages. Instead, JavaScript frameworks request data from one or more web APIs, dynamically changing what the user sees and the actions they can perform.
In addition to modern browsers, there has been explosive growth in mobile devices such as phones and tablets. These devices have access to the Internet from most locations and offer GPS location and app-store distribution. Applications no longer have to be web pages in a browser. Instead, they can use APIs to access data and business logic to get things done.
Finally, the Internet of Things (IoT) is moving the world of devices, previously requiring human intervention, into autonomous replacements that combine the physical world with the world of software. As a result, APIs enable IoT devices to broadcast their telemetry data and receive commands from other systems. IoT is an emerging domain that will greatly benefit from integrating and providing APIs.
Reason #2 Simplicity
Historically, enterprises adopted technologies such as SOAP or XML-RPC to integrate applications internally and between partner organizations. These technologies often required additional standards and specifications on top of transport protocols such as HTTP. However, these technologies are meant for systems integration where rigid specifications are most important.
Modern web APIs abandon the need for these complex standards, instead choosing a simpler solution. They encourage the use of HTTP, the protocol that powers the Web, as the foundation for APIs. The HTTP specification was designed to support a robust set of request verbs (i.e., what you want to do) and response codes (i.e., the result of the request). The philosophy for web APIs is to avoid additional standards and specifications, instead choosing to use the HTTP standard to define how web APIs operate.
By choosing HTTP as the only standard, any application or device can consume a web API using built-in programming libraries. No longer are expensive software solutions and complicated standards required. This means easy integration for any device: mobile phones, browsers, or even cars with mobile network access can consume web APIs.
Reason #3 Lower Cost
By choosing HTTP for our APIs, companies can avoid allocating large budgets of time and money to learn, build, and maintain complex software-technology stacks. Instead, built-in and open source programming libraries can be used to create and consume a variety of web APIs.
With the introduction of cloud computing, any business or individual developer can provision a complete data center on a credit card. No longer do you have to purchase tens of thousands of dollars of equipment, wait for it to be shipped to a data center, physically install it, and configure it for use. Now anyone can provision a server from one of multiple cloud vendorsoften in less than 60 secondsand at a fraction of the cost of purchasing and maintaining a physical server.