When I first started writing about APIs ten years ago, the goal of many of the articles at the time was to spread awareness about APIs and the advantages of building them as a platform. There were tech evangelists, like Kin Lane, who held the API torch fervently, running into the dark tech wilderness trying to illuminate a few idealists with good stories and case studies. Back then, the C-suite was pretty oblivious to what an 'application programming interface' was. Developers got it, but pitching upper management from the bottom up was a hard sell.
Fast forward to today, and those problems are largely a thing of the past. All traditional organizations have gone digital in some form or another, and many have turned into software companies. Most lead engineers, architects, CTOs, CIOs, and even CEOs seem well aware of the transformational power APIs have. Ironically, today's executives even seem more bullish on APIs than developers. According to Postman's 2023 State of the API Report], 53% percent of CEOs said API investments would increase in the coming year, compared with 44% of developers who said the same.
So, the evangelism worked. APIs are mainstream. Hoorah. This isn't to say everything out there is built API-first or needs to be an API — that's far from the reality. And, you may still have to convince leadership to approve individual projects. But it's become less of a tough sell. So, let's review some of these trends to understand why business leaders care more about APIs — and governing them — than ever before.
APIs Increase Engineering Potential
Nowadays, executive interest in APIs has reached new heights, likely because leaders have seen firsthand how API strategies can aid agility and operations. Instead of creating bespoke monolithic code bases, API-first microservices have become an industry standard development mode due to their reusability. (Think the Bezos mandate for externalization).
"The benefits of APIs in software development are numerous," writes Danny Fields, CTO of tax software company Avalara, on Forbes. He especially sees benefits for e-commerce applications integrating third-party APIs to build complex functionalities without wasting engineering time and efforts reinventing the wheel.
API-led transformation is still occurring in other sectors, too — one IBM executive describes the current 'APIfying' of telco networks. And, if you dig deep into many recent digital transformation efforts, you'll find APIs are a fundamental thread in the fabric of these initiatives, from new connected customer experiences to innovative open ecosystems.
APIs Present Strategic Opportunities
One point is the impressive new revenue streams and partner initiatives that APIs unlock. 65% of respondents to the aforementioned Postman study say their organizations already generate revenue with APIs. Whether offering them as core products or add-ons to existing platforms, the API-based monetization model is well on its way to becoming a cornerstone of modern business.
Another indicator is the amount of investor interest in API products. For instance, the API-First Index currently tracks over 60 private companies that have raised over $50 million in funding, totaling over $20 billion. This demonstrates the general awareness and excitement surrounding API-based SaaS investments.
But this excitement doesn't stop at the startup level. Enterprises are also cashing in on API-based revenue opportunities. MuleSoft's 2023 Connectivity Benchmark Report, for example, found that nearly 40% of organizations' revenue-generating digital assets use APIs.
"APIs play a vital role in helping shape the way we interact with and build technology at scale," says Gleb Polyakov, Cofounder and CEO of Nylas, on Forbes. "In an increasingly connected world, we turn to APIs to foster collaboration, innovation and communication. To put it simply, APIs have become the building blocks of the modern digital economy."
The Move From Evangelism to Governance
Today, API Evangelist Kin Lane credits the increase in leadership awareness around APIs as part of why he made the shift from API evangelism to API governance. "There's no more need to convince," he says. "The trick now is how you educate, align, and keep them investing in the right areas and not getting distracted."
Leadership is more aware of the benefits of API strategies than before, signaling the overall maturity of the API economy. But, the mindset has shifted. Now, organizations are under pressure to govern a burgeoning portfolio of APIs — hopefully before a lack of standards gets out of hand.
Adam DuVander, Principal Consultant at EveryDeveloper, also agrees that we've reached greater awareness around APIs due to their sheer usage, which has brought sprawl concerns. As he explains:
"Most organizations already have dozens, hundreds, or more APIs. They’ve had a chance to see the benefits. They’ve also noticed the downsides of API sprawl. Both of these things bring more awareness at the executive level."
Interestingly, some organizations have been compelled to create new interface-related executive positions to help govern our new era of APIs everywhere. Some groups are establishing new standards-setting bodies, such as an API center of excellence or enablement.
Others explicitly call for a senior role to oversee API initiatives. As David Biesack, Chief API Officer at Apiture, shared with Nordic APIs: "We all know how vital APIs have become to digital organizations' strategies. Assigning the responsibility for executing that strategy and API vision to one person can help the organization focus and achieve success."
CXOs Have an Eye on APIs
The growth of APIs is hard to ignore. It's estimated that 83% of internet traffic is API-based, according to Akamai data. Others peg that a bit lower, but still with impressive estimates. And, this adoption continues to rise across industries, from finance to real estate, healthcare, and beyond. As such, most executives have at least one eye on the role APIs play within their companies — and that's putting it conservatively.
We've noticed increasing interest in API strategies from leaders hoping to make their businesses more agile. They might find APIs alluring when finally upgrading legacy software infrastructure. Or, the interest in AI, and its inherent reliance upon APIs, is undoubtedly turning heads. The need to source new revenue streams must also play a factor here—for instance, the API monetization platform market is anticipated to exceed $70 billion by 2033, growing at a CAGR of 28.1% from 2023 to 2033, reports Future Market Insights.
It's safe to say that executives are interested in API strategies for a number of exciting reasons. But regardless of the higher-up interest in APIs, one thing is for sure — whether you know it or not, APIs are business critical. Now, how we govern them will be the actual test.
