The Rise of Open APIs and Software as a Service


Open APIs have been increasing in popularity as the nature of the web changes. Web-based applications have become more integrated with one another, as users expect an increasingly connected experience.

As the software market becomes more crowded, applications have become increasingly specialised in order to compete with one another.

What are APIs?

APIs are the keys that allow your apps to talk to each other. To understand what an API is, you have to bear in mind that all web apps can be made by any number of different companies, all with their own way of doing things.

On top of that, most companies keep their source code a secret, ostensibly as a way of protecting their intellectual property. APIs are a way of allowing other developers to work with your software without opening up your source code.

Fewer and fewer vendors are providing all the technologies needed for the operations in a single business, as in the heyday of Microsoft. Companies are increasingly using cloud-based microservices for their core IT.

APIs allow apps to integrate with one another for increased power. Compounded with the rise in SaaS (Software as a Service), there is a growing market for developers who can create third-party applications that integrate with existing platforms.

Sometimes also called ‘public’ APIs, open APIs contrast private APIs in that they are somewhat freely available to anyone who wants to use them.

When are APIs open?

APIs are considered open when they have these characteristics:

  • They are freely available for any developer to use (although they may be vetted to prevent fraud or keep out direct competitors)
  • They might be supported by open data (access to customer data)
  • They are based on an open standard (documentation containing guidelines on how a particular piece of software is to be used or distributed)

In contrast to private APIs, which are only for the use of internal developers inside a company, open APIs encourage rapid development and data sharing.

Open APIs are created in the spirit of collaboration and sharing, under the belief that open software business models are the future.

Companies using open APIs

Many companies have found success using the power of open APIs to integrate with other platforms.

Facebook has its own API, just like many other social media sites. When you see users commenting on a blog using their Facebook accounts, this is Facebook’s API in use on that site.

Google’s APIs enable widespread use of its products across other sites and applications. For example, when you see a Google map embedded on a company website, they are making use of the Google Maps API.

The rise of Software as a Service (SaaS) has led to entire companies emerging that depend on developers using their SaaS.

For example, Stripe is a payment processing platform that performs it’s one function extraordinarily well and is monetized using a freemium model. This means that lightweight users can use the platform for free, but larger organisations must pay for their subscription. It successfully uses an API to integrate with other apps and platforms.

Benefits of open APIs

Before, when building an application, developers usually had to build everything from scratch.

Now, it’s much quicker to integrate your product with a third-party application to vastly reduce the time to it takes to get it to market.

Open APIs enable companies to increase their revenue without investing in additional resources. Small companies can vastly boost their software’s functionality by using the power of larger companies’ software.

APIs are especially useful for a company’s core IT infrastructure since no one wants to use their technology in silos. If you’re using a customer database provided by one vendor, you want it to integrate seamlessly and effortless with your email marketing platform sold by another. No one should have to manually move the data over in a spreadsheet.

As companies make more use of open APIs, developers are able to search lists like the ones provided by ProgrammableWeb to find APIs they want to integrate. There is a booming API industry with many supporting products and services available.

Downsides of using open APIs

There are potential security risks involved in opening your code and data to external parties. You also have no control over the user experience of third party clients using your application.

If you’re a developer, it’s important to remember that APIs will be released under certain licences which you will need to comply with, and it can get complicated.

Even more importantly, if you’re using open APIs that come packaged with open data, you’ll also need to comply with these licences.

Do your homework before committing to using an API. If a company decides to change the terms under which their API can be used, developers who have already built software and want to continue using these APIs will have no choice but to comply.

Closing remarks

Open APIs enable developers to build complex software solutions without reinventing the wheel every time. They allow some startup software companies to achieve explosive growth without having to invest all of their own resources in developing their products.

They are in keeping with the free and open web, making companies more collaborative rather than competitive.

The usage of open APIs is here to stay, but developers and founders should think twice before basing their whole business model on using other companies’ APIs. The privilege to do so could be revoked at any time.

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