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Summary

Enterprise API initiatives will continue to be largely driven by business motivations and IT will indirectly position APIs as a strategic business asset. As expected, there will be more talk of digital services and digital business, with APIs used as a peripheral argument to secure buy-in and funding for digital initiatives. The recent Ovum report, 2016 Trends to Watch: Integration and Middleware, providesinsights into the evolving role of APIs as key enablers to digital services and associated business models.

“x+API” is the new mantra for innovation

Digital businesses need to combine internal and external capabilities, resources, data assets, and processes to deliver optimal digital services to end users. This is a fundamental requirement for an enterprise interested in participating in and benefiting from the wider digital business ecosystem. For example, enterprises will need to expose data, specific capabilities, services, and resources to partners and customers in a secure and flexible way to develop and deliver digital services. Likewise, in certain scenarios, enterprises will have to rely on external development prowess for developing new applications/services, while taking care of data security and privacy mandates. Interestingly, APIs in their various guises can cater for such an extensive and complex set of requirements.

We see “x+API” as the new mantra for innovation in an increasingly digital world, where enterprises need to respond to new market opportunities at a pace that cannot be supported by traditional approaches. The component “x” in “x+API” equation can range from a specific data set, service, application, or an API, to an integration flow allowing mobile enablement of existing business processes. This translates into the exposing and combining of various software components for development of new applications and services.

There is no shortage of examples of how enterprises have achieved success by refactoring and upgrading traditional services for delivery via API-enabled digital channels. Likewise, API/service aggregation has frequently resulted in the development of new applications/services, which provide far greater value than individual components.

According to a recent Ovum survey, the number of enterprises having an API program is expected to increase by 150% over the next two to three years. We often hear that an enterprise that does not have an API in today’s business environment bears stark resemblance to a company that did not have a website in 1990s. In 2016, we expect to see microservices (“micro APIs”) providing greater flexibility for composing new APIs that can be combined with other APIs and services to develop new applications. API providers will have the flexibility to tweak components of an API mix to develop another set of applications/services. With API-led innovation driving development of new digital services and business models, API management will increase in scope and complexity.

It is not uncommon to see middleware vendors marketing their API platforms (much broader than a typical API management solution) as “digital platforms”. API management vendors are developing competence in digital strategy/business consulting services, as enterprises need a strategic partner for digital transformation initiatives. We expect more partnerships and acquisitions in this space over the next couple of years, as specialized API management vendors realize the need to develop an end-to-end proposition in combination with middleware stack vendors.

Appendix

Author

Saurabh Sharma, Senior Analyst, Software – Infrastructure Solutions

saurabh.sharma@ovum.com

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