Benefits of public APIs - using API trends to your benefit

For the last couple of years or so there has been a lot of buzz around APIs, and more than a few companies are trying to figure out what they can gain from building an API to allow external parties to utilize their systems.

Many companies already have private APIs that allow different software across platforms to utilize their functionality and data. Some are hesitant to open up APIs to third party developers, especially if the API will have direct or indirect access to business layers or payment systems.

The perceived difficulties concern security, rigorous testing and the time and cost to set up different business models and rules for private and public use. However, more and more companies are seeing that the benefits of the API trends of opening up APIs may well outweigh any additional costs.

Imagine that your company is selling international text messages and that you have a website or a smartphone app facing the end users and a private API to access the underlying system. If your company is really good at making deals with international operators you might be able to offer competitive pricing to end users. Let's say another company is better than you are on user experience and virality, and that they have a massive user base for a smartphone app doing something similar: free messaging from smartphones to smartphone for instance.

Now, if you allow them to use your API to send text messages to feature phones when their end users are trying to reach a phone that doesn't support their app, you could suddenly have a revenue stream that costs virtually nothing to maintain and customer acquisition. No matter how small that revenue stream may be, you have eliminated two very expensive obstacles.


Another example is systems with user generated content, such as ratings, reviews, etc. Allowing third parties access to your precious data may encourage end users to create more content for you, as the data can be accessed and presented in a different context. An end user might be more prone to rate a movie using mobile on the subway going to work, than using a computer at home or at work, so why not let mobile developers have access to your movie database using a public API and get more reviews and ratings from their users?

The scalability is potentially huge if you set up your infrastructure properly e.g.  to allow third parties to utilize your systems. Public APIs have enormous possibilities and the only question is how you and your company can benefit from using them.

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