API companies are the new black
Recently, we've seen a wave of new companies being started or funded with APIs as the key functionality that they provide. This is something called an API economy company. Here are a few examples:
The API economy is growing
In recent years, the API economy has experienced tremendous growth. According to a report by Globe Newswire, the Global API Management Market wasvalued at USD $4,198.6 Million in 2021 and is projected to reach a value of USD $15,863.24 Million by 2028 at a CAGR (Compound Annual Growth Rate) of 24.8% overthe forecast period 2022-2028.
How big is the API economy today?
While there is not (yet) a comprehensive guide or analyst report on the API economy itself, there are some interesting statistics that can be found across the web.
Some of these statistics date back to 2021, and when coupled with projected growth rates that have only accelerated with digital transformation, the numbers are likely higher as of 2023.
How big can the API economy get?
Changes in cloud architecture typically lead down a path towards becoming more cloud-native - meaning using more cloud-enabled constructs, as opposed to traditional server/operating systems-based models. As cloud adoption continues, the percentage of customers who reach that cloud-native stage will drive growth in APIs, and in the overall API economy. Additionally, specialist firms in various areas, such as providing data or core repeatable functions that developers often need, are likely to launch with APIs as the primary interface to their offerings.
Which industries use APIs the most?
Again, no specific statistics have been made public, but observations from both industry reports and data breaches show these industries:
- Mobile applications - every mobile app is a frontend to a backend cloud service, with communication happening over API. In fact, several mobile apps, like food delivery services, include multiple third-parties coordinating a single transaction over APIs.
- Travel - from hotel rooms to rental cars to airplane tickets, there are partnerships and affiliates at massive scale.
- Manufacturing - most supply chains involve multiple manufacturers
GraphQL is a fast-growing query language for APIs. One of the core values that it provides, is to allow for a broader range of functionality or data access via an API. But this also creates a set of potential exposures of data via more flexible queries. We'll be talking about this more as we continue to build out the FireTail platform.
APIs are one of the most flexible ways to package things. Those can be data packages, data sets, offerings, or really anything can be encapsulated in a self-describing object, like a JSON document. That's why a service that shows bundles of banking or insurance offerings makes a lot of sense. The consumer of that data, which might be a retail or B2B service provider, can take that data and present it any format that makes sense to sell, market or serve.
When you can't know the future
If you start with one data feed, with one data element, that's a very simple starting point. However, over time, more and more data may be useful. After all, data is the new oil. That's why an API is the perfect way to start providing this data. You can always update the feed later, and add more data to it.