The State of APIs 2016 Report
Companies like Netflix and Uber are API-driven enterprises—they run on APIs and use the power of their API platforms to deliver superior customer experiences—and they’ve disrupted entire industries in the process. API-driven enterprises can experiment quickly to continuously deliver and improve rich customer experiences, and possess the flexibility to innovate on business models and grow partner networks quickly. “Traditional” enterprises are aggressively embracing an API-centric approach to power their digital transformation and grow their digital businesses.
The State of APIs 2016 report examines the trends in digital transformation, the impact of APIs, common use cases driving digital transformation in different industries, and the best practices of API-driven enterprises. This report is based on the hundreds of billions of 2015 API calls we saw in the Apigee Cloud from hundreds of customers across Apigee’s global network of 24 data centers.
The business of APIs
The increased pace of digital transformation in enterprises is evidenced by a tremendous increase in API traffic, which has grown 2.8x year-over-year. Enterprises are pursuing a variety of digital transformation use cases that fall into three main areas:
Superior customer experience In 2015, customer experience initiatives aimed at engaging customers through online channels accounted for approximately 40% of all digital initiatives.
Ecosystem expansion Initiatives to expand capabilities through partner channels and ecosystems accounted for 55% of all 2015 digital transformation initiatives.
Operational efficiency Just under 10% of digital transformation initiatives focused on boosting productivity.
Different industries are in different stages of digital maturity. Information services and technology industries are the most digitally mature, given that their core assets are digital. Retail and media verticals are next in terms of digital maturity.
We found two-thirds of enterprises have a public API program, which they use to connect with partners and developers. Enterprises with public API programs saw their API traffic almost triple year over year.
Enterprises are using API management platforms to manage a variety of developer teams within and outside of the enterprise to drive rapid app development, and to secure, scale, analyze, and manage their APIs.
- Eighty-seven percent of enterprises are adding business logic and a majority of enterprises are doing transformations at the API tier.
- Seventy-four percent of enterprises use OAuth for security.
- Seventy-two percent of enterprises use threat protection policies at the API tier.
- Sixty-eight percent of enterprises employ quota management and 72% use spike arrest policies at the API tier to manage traffic.
Digital transformation is in early innings, with two-thirds of enterprises conducting discrete digital projects. As more enterprises roll out new business models and digital initiatives, we see a growing number of APIs and API traffic volume that needs to be secured, managed, scaled, and analyzed.
As microservices and containers become mainstream, we foresee a dramatic increase in the use of APIs. We predict a further ten-fold increase in API traffic as IoT use cases mature and APIs become the way in which physical objects connect and communicate with each other.
With this oncoming API tidal wave, it’s even more critical for enterprises to employ an API management platforms to accelerate their digital transformations.