API mishaps can disrupt the supply chain.There is a growing awareness among corporate leaders that API management must be seen not as an IT concern, but rather as a top-level business need. In the near future, the importance of API management will only accelerate.
"Companies will spend almost $3 billion on API management in the next 5 years."
A recent Forrester Research report highlighted this trend. According to Forrester, U.S. companies spent $140 million on API management last year. By 2020, this number is poised to jump up to $660 million. Altogether, global companies will spend almost $3 billion on API management in the coming five years.
As these numbers make clear, the need for API management is growing at a rapid rate and among a wide range of companies. Forrester emphasized that enterprises are investing more in mobile, the Internet of Things and big data, and these efforts are evolving, expanding and maturing. As this continues, CIOs and other decision-makers recognize that they need to enhance and extend their API management efforts.
Increasing consequences
Forrester Research's Michael Yamnitsky emphasized that this is not merely a question of gaining a competitive advantage over industry rivals. API management is effectively essential for organizations that are aiming to leverage mobility, IoT and big data, and the writer explained that the consequences for firms that fail to adapt to this evolving standard will be severe.
"With dwindling revenues and profit margins for firms that fail to keep up with the demands of an increasingly digital business environment, many of the firms that fall behind will ultimately face consolidation and buyouts," Yamnitsky wrote.
Drilling down
Writing for BetaNews, Michael Morton of Dell Boomi recently offered a closer look at how API management can impact day-to-day activities for consumers and, in turn, businesses in a variety of industries.
For example, he noted that supply chains today depend on APIs to function, due largely to their inherent complexity. According to Morton, an out-of-date API or other mishap could lead to a domino effect, with the ultimate outcome that a business's products are not available to shoppers when they should be, leading to missed sales opportunities.API mishaps can disrupt the supply chain.
Somewhat similarly, Morton noted that API management plays a key role in navigation systems, and specifically how they deliver information on local businesses. Commonly, these navigation systems will incorporate and display insight about nearby restaurants, gas stations, stores and so on. Obviously, this can lead to a significant boost to a business. Yet if firms allow their API management to fall by the wayside, they won't see any of these benefits, as it is incumbent on the companies to develop and update their APIs.
Last, but hardly least, Morton pointed out that API management is crucial when it comes to data governance. As companies rely on an increasingly diverse array of third-party applications, all of which gather sensitive information on users, there is an intense need to ensure that they remain compliant with all relevant regulations and standards. API management, when handled properly, can deliver this level of control.
Innovation potential
Clearly, API management is becoming - or, arguably, has already become - essential for organizations looking to keep pace with the new technologies necessary to remain competitive. Shortcomings in this area will undermine companies' productivity and efficiency. Going further, high-quality API management can actually lead to significant innovation. Writing for IT Pro Portal, Ian Clark emphasized that API management is inherently concerned with the interaction between internal and external applications. The smoother these processes are, the better the firm will be able to explore new possibilities and deliver creative solutions to the market before their competitors.
Undoubtedly, any company that has yet to make API management a priority needs to take steps in that direction as soon as possible. In this capacity, the responsibility will fall to not just IT leaders, but the entire C-suite, as Phil Walston, API Management vice president for CA Technologies, told CXO Today.
"In the application economy, companies are facing increasing pressure to move toward an API-first architecture as they digitally transform their businesses," said Walston, the source reported. "Businesses are looking for new ways of engaging with customers, partners and employees to generate revenue opportunities using connected devices, big data and analytics. Underpinning these new models is a fundamental shift in the way software is developed and deployed, and APIs are to the building blocks enabling that shift."
To fully take advantage of applications' potential, API management is simply imperative.