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How the API economy is changing business

API cloud economy
Photography by John Lund / Getty Images

APIs are essential components for building business services. Whether deployed in the cloud or on premise, APIs are built and advertised in standard ways that allow businesses to quickly ramp up services on an as-needed basis. The result is nimble, flexible and responsive services that can be achieved without breaking the budget.

While APIs aren’t new, the current standardization and ability to leverage them without always knowing where the service will be deployed bring new flexibility and speed. Deployment is now based on business need, cost, time and usability. In the past, in-house developers would integrate a piece of licensed software into the application stack based on a set of APIs that were contained in the stack. All of the APIs were in the system and the developer simply coded to them.

“All you have to know now is how to leverage and manage the APIs and where the service takes place.”
—Brad Brech, distinguished engineer, IBM Power Systems Solutions

Now, developers are going online to select needed services from both internal and external providers, thereby reducing coding time. This approach requires a bit more management, as IT needs to keep track of what APIs are being deployed and where. “All you have to know now is how to leverage and manage the APIs and where the service takes place,” says Brad Brech, distinguished engineer, IBM Power Systems* Solutions. “It could be on the same machine or another machine in your environment or on an ISP somewhere in the cloud.”

The approach hasn’t done away with traditional middleware, which remains part of the total software stack.

Rather than integrating everything on one machine, application elements can be assembled as services based on the needs of the solution—such as data placement, latency or governance—and deployment costs, Brech says.

This commodity approach is giving rise to the API economy. Providers of APIs advertise their offerings on Bluemix* or other developer services. The developer finds the appropriate API for the application that’s being built and selects it from the vendor, who instantiates the service for use. The developer then accesses the service via the API, which already is coded to format data and send it to the deployed service for execution.

APIs in Action

Businesses across the spectrum are seeing the advantages of using prebuilt services. For instance, a big retailer might employ analytics services via APIs to help its marketing department improve its strategy for a product such as a certain type of perfume, Brech says.

In this scenario, the retailer already has a wealth of private data concerning inventory and price elasticity. Because of its loyalty programs, the merchant knows which customers purchase perfume. What’s missing from the data on hand is current information on perfume from social media.

Shirley S. Savage is a Maine-based freelance writer. Shirley can be reached at



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