Explosion in mobile data brings API hyper-growth

Based on research by ProgrammableWeb, the public API (application programming interfaces) has seen a 400% growth in the past 18 months.  APIs can be big business, especially in mobile apps where the creativity of data mashups is being matched by unprecedented consumer demand for mobile data.   According to Google, the search giant now sees more mobile search queries than desktop queries, the change coming just in the last year.  Ask yourself, how often do you interact with data and web services on a website compared to your smart phone?  The world is going mobile, which means the world is an emerging marketplace for APIs to power mobile innovation. 

APIs are quickly becoming the world’s franchise kit for throwing millions of “hackathons,” like those held by the New York Times, American Express and Foursquare.  Hackathons are multi-brand digital gatherings where disparate data feeds can be bundled, related and presented:  all for creating different applications to solve business problems or build consumer demand to buy something.

In fact, APIs are no longer cutting-edge data interfaces for the Facebooks, Amazons, Twitters and Googles of the world.  They are vital for every brand, especially in mobile commerce and any company that has a mobile consumer.  The data and content of larger enterprises, previously only available behind tall castle walls, is slowly becoming more accessible through APIs.   Managed API technology companies provide a management layer to govern and protect big-brand APIs so data-rich companies can attract new partners, thereby extending their brands and discovering new channels to distribute their goods. 

APIs can change entire business models, and they are.  Take for example the platform approach of Expedia.  It currently has 3,600 active API partners and delivered $137 million in revenues into its affiliate network over the past eighteen months on the back of its API platform. That platform serves its affiliates, hotel and flight partners, as well as thousands of new developers who want to try the Expedia kit and build a small business for themselves.

Expedia becomes somewhat neutral as it offers an approach for partners to self-serve against Expedia’s backend data and web services, all via the self-service APIs that Expedia powers.  While processing million of data API calls per month, Expedia transitions from its website only to a data and booking platform that powers hundreds of partner websites and mobile apps, just as the supplier of new business kits does in the physical world of distribution. 

To put it in perspective, it took eight years – from 2000 to 2008 – to get the first 1,000 public APIs, but only six months (the latter half of 2010) to go from 3,000 to 4,000.

While 4,000 API types might not seem like much, the average API call volume is more than one billion data exchanges per month for each company in the top 20 in terms of total volume. And there’s a high ceiling – research from API infrastructure provider Mashery (San Francisco, Calif., U.S.A.) estimates that not even 5% of the global open API market has been realized, given the newness of this type of technology overlay on traditional IT infrastructures.

It is no longer a market of “usage and minutes” but a market of data as a business and understanding how to monetize telecom assets within that market.  It will require much more creativity than we currently see.

There are two major trends driving the demand for more open IT assets: the consumer's rapid move to mobile and social platforms, and the emerging financial market opportunity of data as a service. In other words, every business of size must now strive to be a platform for data and web services – even traditional businesses that consume and aggregate unique data sets in support of traditional models and products.   Every company needs to be easy to do business with. 

As the new data aggregators (Foursquare, LinkedIn, Rdio, etc.) have shown us since 2008, APIs also translate into millions of eyeballs on social, mobile and any other app that comes along.  In the words of Marie Hamblin of fashion brand ASOS (London, England) at the Business of API Conference “We are future-proofing our business with a data access model that allows us to diversify and grow in a digital future that is often hard to predict.”

Like few previous fads of the Internet’s evolution, APIs are here to stay, with Gartner predicting that over 75% of the Fortune 1000 will have open APIs by 2014.  What does this mean for companies that are thinking about social, mobile and cloud computing? It means that the digital business of the next ten years is the business of APIs, and this trend will cut across every economic sector that relies upon data in and data out at massive scale.   

The opportunities for mobile data innovation cut across retail, banking and healthcare, and will soon move to the B2B space, a gold mine for bringing the ease of interfaces to the dusty world of legacy supply chain and production data.  Imagine the next 50 developers competing to improve the visual display of your product forecast, production pipeline or bill of materials for manufacturing.  Everything will be mobile, which means virtually everything will be an API. 

What does this emerging API trend mean for the consumer? It means that the next innovations of mobile apps and web mashups are just getting started. Most importantly perhaps, more APIs available from the data of established brands translates into millions of new apps and web mashups that can offer everyone digital experiences as engaging as they are practical.  Data equals life; more data equals more life.

Drew Bartkiewicz is Vice President, Strategy Services for Mashery, www.mashery.com. He can be reached at drew@mashery.com.

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