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Why effective API management is critical to building a business platform?

By SWETHA SRIDHARAN posted Tue June 27, 2023 10:20 PM



APIs are the driving force behind digital transformation. Building platform business models is the one way of accomplishing this.

Rightly so, API (Business) Platforms have gained prominence for all the good reasons. Businesses are building new digital experiences for engaging with their customers. A business platform for APIs facilitates these interactions /exchanges between the consumers and producers. It does not just focus on technology. 

Business Platform

As a concept, “platform” may sound familiar but building a business platform requires a new way of thinking about your business to build a successful one. The most important step starts with the leaders (both business and IT) exploring the business use cases and aligning on the core business capabilities. This results in encapsulating core platform capabilities as microservices and providing access through APIs, enabling an innovative approach toward new business models.  What are the core capabilities that your business has that other companies might use? Billing, A/R, hosting, payments, messaging, etc. are just a few examples – some of which entrepreneurial companies are providing today. In recent times, Twilio has managed to create a successful cloud communications platform purely driven by APIs. It enables enterprises to engage with their customers through messages, voice, video, and emails.

Building a business platform doesn’t stop here. Enterprises not only craft APIs that are related to core business capabilities but also think about how they would package these APIs so that they can be securely consumed and uncover new value chain opportunities. These capabilities are packaged in several ways for different consumers, and a platform emerges by bringing them together.

Portal, Marketplace, and Ecosystem

With this deep understanding, enterprises can craft an API platform that can manifest into different constructs that enable interactions between API providers and consumers. They can start with a developer portal but might evolve into a marketplace or ecosystem.

Enterprises can start with a portal as a means to make their APIs discoverable. API providers have both internal and external portals. They are typically basic in nature and a foundation to API Marketplaces. A portal acts as a means to catalog the APIs that can be tested and subscribed to by the consumers. An example would be Citibank’s API Portal.

An API Marketplace is a means for enterprises to provide their APIs for external consumption with a community of developers. In simple words, an API Marketplace is where API consumption transacts. This is where a consumer can choose to use/purchase APIs that they like. Customization is an absolute must to create a marketplace that represents the brand and enables social interactions. Some examples of marketplace could be Twilio and Stripe.

An Ecosystem is an extension of a marketplace where API contributions result from close collaboration with partners. A business can provide a series of related services through partner APIs by creating an ecosystem. A simple example would be when someone is planning a vacation, besides the obvious travel linkage, they may need climate-appropriate clothing and travel insurance. Alibaba and Uber are names associated with successful business ecosystems

In today’s competitive environment, enterprises are looking to build an ecosystem or marketplace that will set them up to win. Delightful consumer experience is the driving force for enterprises to adopt new avenues and channels digitally. Often, enterprises may choose to adopt the best practices of API Platform without being one. Platforms must offer consistent experience at the business level, and it is very hard to drive this across the enterprise without API Management. With API proliferation, securing and managing APIs can be a real problem. Dealing with API lifecycle (including versions, subscriptions, and security) could be more complex than backend implementation. To do this efficiently, enterprises need API Management – a key enabler to building a successful API-based business platform. Good API Management does not stop there. It should offer the same benefits to those enterprises that want to start simply offering APIs without becoming an API platform. This means it could be an API developer portal, to begin with. 

4 Key tenets to successful Business Platforms

The key tenets needed for a successful platform business is dependent on an enterprises' ability to do the following:

Agile application development

A platform business must speed up the app development cycle for their consumers. Effective API Management should help in minimizing the time to first hello world for app developers (internal or external). It means to rapidly empower application developers to discover APIs and business services with self-service onboarding. The platform should have a consistent and unified experience for reading API docs, registration, and subscription to APIs without any concern over the backend implementation.

Secure data

Securing data is of paramount importance because an API not managed well can be a source of threats. API Management must provide the ability to secure data where it resides. It could be an on-premise legacy backend system or a cloud-native application on the public cloud. This means protecting data from all kinds of theft, data loss, and data breach and offering defense in depth protection.

API Marketplace

Enterprises are seeking to expand their presence and reach to drive new businesses through APIs by engaging with developer communities. An API Marketplace that is participative and vibrant is a definitive means to build successful relationships with consumers.

API Ecosystem

Enterprises are looking to generate new business value and opportunities to monetize by reaching to new clients through collaborations with partners and trusted third parties. This is done through ecosystems. Significant things to consider are how an API Management solution can help enterprises in quickly onboarding Partners to produce APIs without the lengthy hand-holding process. However, it can still implement federated administration and governance for consistency.

Building a Business Platform

IBM API Connect makes it easy for enterprises to adopt a business platform approach by connecting data and applications. API Connect complements your evolving API strategy by offering complete flexibility in deploying anywhere your data resides – on-premise or on any cloud.

With this underpinning architecture enterprises can create, secure, mange, and socialize new business capabilities/services as APIs to create value and to open new avenues for monetization. It can accelerate API creation with a simplified user experience to expose data, microservices, and SaaS services through open standards. It offers the best-in-class consistency and governance across API lifecycle needed by enterprises as their API adoption increases. Moreover, it comes with a powerful enterprise-grade API gateway to reduce risks and protect your data across multi-cloud environments. Use our portals/marketplaces/ecosystem to empower application developers to explore and consume your APIs.

Are you excited to get started? Sign up for a free 30-day trial and begin building a business platform today.