In an app-driven world, applications are becoming smaller and agile. They have more moving parts and are becoming event-based. Applications are depending on several hundred APIs for added functionalities, features and personalization. Organizations can still write large monolithic applications with minimal legacy. The focus is on large monolithic applications in the banking and financial services sector.
But it’s time to start thinking in terms of modules. The applications are going to have a summary of functions, features or packaged business capabilities, possibly enabled by a suite of a few hundred APIs. The connected hybrid application is the future, which is about managing APIs.
APIs aren’t new. They have been around for decades. But in the past decade they have come into their own. The API economy has only accelerated with the increasing cloud adoption since the COVID-19 pandemic. The signs were there even before the pandemic. In 2019, we saw Salesforce’s $6.5 billion acquisition of MuleSoft, a management system for APIs in 2019 which signalled the operational shift to API-led connectivity. Then came Visa’s acquisition of Plaid for $5.3 billion which gave it access to Plaid’s API management software. These were but pointers to what was to come.
Impact of COVID-19 on large software vendors
Since the COVID-19 pandemic struck, large vendors are facing challenges. For one, they can’t travel like earlier. Before COVID-19, large vendors could send someone to address a challenge in another part of the globe. But they cannot do that anymore. But the market still has a continuous demand for last mile customization. The large technology service providers sell extended suites of software. If the large vendors start focusing on customization, their profitability will be affected. They need to focus on APIs to enable customization and personalization for customers.
APIs offer the opportunity for customization and personalization
This is where players like us, can build the modules to help with customization in terms of API programs. Customers do not want to be stuck with a single choice anymore. They want the software products in their ecosystem to talk to each other. There are the gaps in the market waiting to be addressed. There are no enemies in the API world.
Customers don’t want to be restricted to just a single vendor. They want integration and suites to talk to each other. They are increasingly choosing to go with a provider who offers them API integration to work with their choices. Product engineering service providers like us can help develop APIs that make their products more appealing to today’s customer who demands choices.
The growing API management economy
There have been several reports calling out the growth of the API management economy in the coming years. When it comes to modernization in some industries, there is a need to move from a heavily customized version to something more modern. In the banking sector, banks are faced with the challenge of a monolithic application that is too complex with a lot of additions and customizations and are unable to add new features that benefit customers.
COVID-19 only saw an accelerated growth in the demand for apps and smart devices with remote work models becoming the new normal. Organizations had to access and share data through APIs, to provide the personalized experiences that are being demanded by employees, customers and stakeholders.
To do this businesses across sectors need API management solutions and vendors to help them improve the efficiencies of their API-driven applications and businesses. API management covers platform, analytics and security. What’s been driving the demand for API management is the business need for seamless integration of systems, platforms, and components with apps and devices.
In the pandemic-era, the remote and hybrid work models have become the new normal. Cloud adoption has accelerated as well. This in turn has meant that there are greater efficiencies to deploying API management solutions on the cloud through increased mobility and a faster API development cycle.
The Banking and Financial Services industry is expected to take the lead in the next few years in the API management economy. This is apart from the traditional domains where APIs have had a strong play such as Information Technology, Telecom, Retail and Consumer Goods, Travel and Hospitality, Government, Healthcare, Media, Entertainment, Life Sciences and manufacturing among other domains.
Customers’ need the incremental API push
Customers need an incremental path instead of a big bang conversion. They need a solution to modernize monolithic applications incrementally. The API economy is like digital bridges connecting several things. One is transaction, two is data, and three is connecting different needs to different industries, for example SSO.
APIs will be treated like a product if they continue to grow with the same momentum. They have their own unique lifecycle and they will be pivotal to IT. Enterprise IT users have a few hundred APIs; they don’t have products. But many APIs are one-trick ponies developed for one purpose, and no one is bothered after the initial use.
APIs have grown exponentially in the pandemic era and are likely to grow post pandemic as well. Customers need someone who can help them look in the right direction to solve their problems with the right APIs. This is the problem of the future, where APIs are going to have to be managed. Welcome to the future of the API management economy.