An application program interface (API) is a set of rules that allows software programs to talk to each other. It facilitates communication between disparate systems and applications. Using an API, an application may access the features or data residing in another system easily.

The API is the culmination of the popular hardware virtualization technology. Virtual computing turned hardware into virtual hardware. Virtual hardware gave rise to modularized app development. Modularization led to APIs. 

This tech blog lists seven ways APIs reshape the ways of digital business.

1. Robust and Modular Development

APIs allow digital businesses to develop software in a modular or atomic way. Conventional monolithic blocks of code are inflexible and hard to change. APIs allow assembling blocks of code, facilitating rapid iteration, parallel development and DevOps.

APIs empower developers to manipulate digital assets without mastering the underlying system. Different teams may interact with the same data and logic in many ways. For instance, if a code offers ten features, an API could access anyone out of these features.

2. Streamlined Operations

Modern IT ecosystems are often a mix of legacy systems and modern cloud services. Connecting such disparate systems is complex. It often inhibits the business from leveraging the benefits of new technology, even if available. For instance, the lack of seamless access to data from all systems inhibits the analytic capability of the business. APIs streamline processes running across multiple and often disparate systems. It abstracts the complexity inherent in the ecosystem into a seamless interface. 

The prevalence of the cloud has made APIs popular. Tech-savvy companies digitize their assets, upload it to the cloud and APIs to access such cloud-based assets. Developers use APIs to connect apps and data across clouds or hybrid deployments.

APIs collate internal systems to improve functionality and optimize the workflow. This unlocks many business possibilities. A business, for instance, could handle internal mail and ticket generation through the same API used by the consumer to generate a complaint. JIRA’s API allows the business to tie their internal ticketing and management systems into remote JIRA installations, to optimize internal management systems. Likewise, an API could outsource intricate operations to cloud computation systems.

3. New Business Models

APIfication spurns a new platform-oriented business model different from the traditional organization-centric view. The new model connects disparate entities and enables seamless transactions at scale. It infuses much-needed flexibility and resilience to business processes.

APIs make the task of onboarding partner systems easy. In the past, integrating a partner’s disparate technology was a herculean and time-consuming task. Today, a digitally savvy business simply makes available their APIs through a self-service developer portal. Onboarding usually takes place instantly.

As more and more public APIs become available, many developers combine APIs and create workflows.

API management platforms allow the enforcement of granular control. It also collects analytics and generates insights on who uses the APIs and how. These insights allow enterprises to iterate their APIs and further enhance user experiences.

4. Standardised Communications

APIs improve the interaction with channel partners and other stakeholders. APIs transform the business relationship from a “point to point” one towards a network of resources.

APIs are flexible to transfer any data and iterate intelligently. In contrast, conventional B2B systems such as Electronic Document Interchange (EDI) are very slow to iterate or adapt. A RESTful API enables high-speed compatibility with various file types. It is malleable, scalable and provides holistic support.

The API delivers the data, and also transforms it into variable formats, and creates hyperlinks to related hypermedia. APIs spare users the mess they encounter when interacting with the media as listed in the server directory.

5. Improved End-User Experience

API allows a business to deliver controlled and customized actions to its customers. The business offering the API can embed instructions to direct the customer’s interaction with the data. They can brand the experience, or control the interaction in any other way.

With APIs, developers may lay down general specifications, and then tailor it for specific requirements. Business can leverage the functionality to optimize functions on per-user experience. APIs reduce code bloat, facilitate easy interchangeability, and enable highly optimized interactions.

Amazon Elastic Transcoder, an AWS-centric API allows on-the-fly media encoding, delivering a rich media experience for users.

Kaleyra, a telecom API provider enables a masked call to an Ola driver. The API connects the user’s phone to the cab aggregator’s resources in the cloud.

6. New Monetization Streams

APIs give businesses a powerful way to leverage useful data residing in their systems.

APIs leverage authorization and authentication protocols to control access. Businesses can use APIs to set up paywalls, or charge customers to access high-value business data. Many digital businesses offer free trials of their content or software. APIs integrate such “non-premium” endpoints with limited functionality, along with pay-per-module plans.

Building a photo-sharing application in the pre-cloud days required an on-premises data centre, custom development of the back-end software, and designing the front-end interface. With an API, the business can set up seamless integrations with cloud-based data centres and the software. The app activates in double-quick time, with a far lesser cost.

7. Regulatory Compliance

APIs facilitate easy compliance even with very stringent regulations.

In the USA, HIPAA and HITECH regulations lay down specific methods for database security and secure data transfer. Likewise, the EU Data Protection Directives mandate secure data transmission and storage. API makes it much easier for providers to adhere to the required protocols. TrueVault, an API for the healthcare industry, operates within the stringent HIPAA regulatory body. It allows entities to share data in the way required by the regulations.

APIs offer businesses an anchor to withstand stormy change. It allows businesses to express their strategic data, applications, and expertise in the right digital context, as this tech blog explains.