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Why APIs? Bridging the Gulf between IT and the App Economy

Brian Mulloy
May 24, 2012

In my previous post, I talked about the challenges of ubiquity and an explosion in consumption driven by the threesome of cloud, social, and mobile apps.  Businesses need to effectively target and support their customers and partners in these new contexts.

This time, what do the forces of cloud, social, and mobile apps mean for the way businesses create, evolve and offer apps, data, and services? What does it mean for IT? How to bridge the gap between IT requirements and those of the new app economy?

The big bet of yesterday; the many bets of today

The traditional axiom is that IT resources are scarce and expensive. This resulted in the creation of big budget IT projects and many high-risk projects – some of them long-term, measured in years. There were obviously big successes but there were also many over-time and over-budget project failures.

There’s a new way of viewing all of this, which was pioneered by Amazon and Google and expanded upon by companies like Facebook. The core principle is opposite to the one we saw previously. In this world, IT is increasingly cheap and ubiquitous. Budgets are iteratively assigned and success criteria define whether projects moved forward. 

In this “fail fast” philosophy as defined by former Google CEO Eric Schmid, “it’s better to launch and iterate; to fail fast and learn from your mistakes, than to spend years in planning and end up miles off the pace.” Getting to failure more quickly means that you can move on and assign budgets to other projects more quickly.  The result is smaller, more focused projects.

From a direct to an indirect model

How do companies accomplish the “fail fast” strategy shift? In essence, it’s a shift from a direct model to an indirect model. It’s about a technology shift to APIs that allows you to create a platform.


Fundamentals of the app economy and the role of APIs

In the past, a business was in good shape if it provided a Web site. Today a company’s data or services need to be consumable by a wide array of application clients – from the 2 ton client – the car which is increasingly more connected - to internet TVs, gaming consoles, and handheld mobile devices. APIs power it all.

People are demanding apps because other people are using them and because companies are providing functionality through apps.  Given the hundreds of apps available on app stores for every platform, the app store is a competitive place. App developers are the key people behind the supply side of the app economy. Their creativity, technical know-how, understanding of the marketplace and customers is what makes apps successful.

Companies who want their brand and value proposition leveraged through apps to consumers understand that there’s value in their internal systems and that they can and must participate in the app economy in the same way as they participated in the Web economy in the last decade.

However, an app developer cannot simply access a typical internal system at a Fortune 500 company. Providing such access is a very deliberate and thoughtful proposition on the part of the business.

While social, mobile, and cloud services empower businesses by allowing developers to access corporate data and interact easily, IT departments still need to be concerned with security, compliance, rapid changes, and a myriad of other things. 

The key to bridging the gulf between IT requirements and those of the new app economy is an API.

Just as the app store is competitive, the world of APIs is competitive. There’s much value to be created if app developers can leverage a business’ internal systems, meaning that many APIs compete for the attention of the app developer.

Several flavors of API strategies support the app economy. We categorize them as Internal, Partner, Customer, or Open and according to the different roles that app developers can play.

Essentially we ask whether the app developer is internal to your business, in a partner’s business, at a customer’s company, or an independent developer in the wild.

Next time, we’ll delve into the anatomy of each of these API strategies, starting with an Internal Initiative.

API Management Decision-Making Kit

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