When an organization uses APIs to build new products, new business channels, and new business models in ways that ultimately produce new revenue or other measurable value, that organization is often said to be “monetizing its APIs.”
In aggregate, the organizations around the world that directly or indirectly monetize their APIs form the basis of what the media often calls the “API Economy.” As a subset of the total global economy, the API economy is responsible for the exchange of trillions of dollars of value annually. According to a recent report, 35% of today’s technology leaders generated over a quarter of their organization’s revenue as a direct result of APIs.
As organizations bear witness to the well-chronicled successes of API economy juggernauts like Google, Amazon, Stripe, and Twilio, the pressure on business and IT to seize the opportunity and deliver measurable business outcomes mounts. To participate in the API economy, organizations must take a logical, methodological, and proven approach to the journey.
At some organizations, executives want to know if the organization is asleep at the wheel, abdicating additional revenue, first mover advantage, and market share to competitors. At other organizations, developers and technologists who understand the game changing nature of the API economy are desperate for decision makers to pay closer attention to the potential and to take action accordingly.
Regardless of how organizations finally decide to fish or cut bait (the API economy isn’t necessarily a golden opportunity for all companies), it is beholden on the ones who choose to move forward to take a logical, methodological, and proven approach to the journey. That approach is captured in a four-stage blueprint that MuleSoft, in partnership with ProgrammableWeb, has developed to help organizations hatching their API strategies and win in the API economy.
Stage 1: Establish digital strategy
The four stages start with establishing digital strategy where, among other critical tasks, you must align stakeholders, define business outcomes, and validate the ecosystem and business models.
Stage 2: Align organization and culture
Next comes alignment of organization and culture. This is where the company has to realign itself around the the business capabilities it will surface to its ecosystem through APIs, seeing them as not just technologies, but as products that must be trustworthy, secure, and designed for consumption by the target audiences.
When it comes to succeeding in the API economy, agile ecosystems marshal the forces of various organizational constituencies (employees, customers, partners, independent developers, etc.), business models, and business channels to, very responsively create and often times, co-create new value. APIs are invariably the connecting fabric that fuels the agility of such ecosystems, serving the necessary data and business capability for the just-in-time provision of game-changing customer experiences and business moments.
Stage 3: Evaluate, build, and deploy supporting technology
Imagine an in-flight entertainment experience involving two legs of air travel and a customer who would like to continue viewing a movie on the second leg at the point that she paused the movie during the first leg. At bare minimum, that awesome customer experience would involve the airline, the supplier of the in-flight entertainment hardware, and the provider of the satellite-delivered content. Newfound customer loyalty awaits. The data to facilitate the co-creation of such a customer experience exists. But the ecosystem isn’t yet aligned to deliver that outcome. But with APIs as the connective tissue behind that ecosystem, building that experience — an indirect form of monetizing the involved APIs — could be a matter of weeks if not days.
Therefore, enabling your ecosystem with APIs — driven by best of breed full-lifecycle management — is a part of the third stage of the blueprint; evaluating and building the supporting tech.
Stage 4: Engage your ecosystem
Finally, the fourth stage involves engagement of your ecosystem through evangelism, productivity tools, training, and hackathons with an eye towards maximizing the awareness and adoption of your platform.
Of course, measuring progress while exercising fiscal responsibility are both key to API program success. These are ongoing activities across all four stages and the organization continues to iterate as it digitally transforms its business.
While innovative, responsive customer experiences, business moments, and ecosystem thinking are foundational to great API strategies, so too is a formulaic blueprint for delivering those outcomes. To get the full story download API Strategy Essentials: A practical guide to winning in the API Economy.