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How to benefit from the API economy

November 19, 2015

The API economy is a term people are using to describe the way application programming interfaces (APIs) can benefit an organization’s bottom line. It’s not just a technical IT issue, there are business benefits to exposing APIs as business building blocks for third party applications. APIs are the way that modern software is being inter-connected, as the growing interest around cloud computing leads to companies experimenting with ways to integrate cloud and on-premise systems or other cloud services. What organizations often don’t realize about building APIs is that it sets up your application as a platform, and the platform approach requires a new approach.

In the past, legacy client-server based applications used a centralized hub-and-spoke architecture and proprietary communication middleware to ensure tightly integrated applications. The modern combination of cloud + on-premise systems, however, is a decentralized architecture and works via the Internet, which requires loosely coupled integrations. Furthermore, application developers these days shouldn’t just consider cloud systems, they need to be able to integrate with multiple endpoints, including mobile and soon the Internet of Things. It was only recently that the call “mobile first” was being promoted within the developer community, now with the emphasis on API interfaces the call is becoming “API first“.


Understanding APIs

An API is software code that allows two software programs to communicate with each other. It defines the way that a developer should write a program that requests services from an application. Each application should have its required syntax documented, and this is usually made available for third-party developers as a software development kit (SDK) or as an open API published on the Internet.

When creating an API, experts advise not to make it too low-level, or fine grained, as this will force the user to understand and do much of the business logic. This approach also makes the API interaction very “chatty”. With a fine grained API, any time your applications changes, the business logic will need to change, and all your API consumers will have to change their code and redeploy the system. On the other hand, with higher level, coarse grained APIs, the business logic remains with the API provider, thus reducing the maintenance issues for API consumers.

There used to be a debate over the communication methods – REST (Representational State Transfer) versus SOAP (Simple Object Access Protocol) – but the REST approach is now generally accepted as better. However, API developers still need to decide what data interchange format they will use. Here the debate is between XML (extensible markup language) and JSON (Javascript object notation). To some extent the answer depends on the application requirements, but JSON is gaining more support.


XML            JSON
<name>                {
<first>John</first>       “firstname”:John
<last>Smith</last>       “lastname”:Smith
</name>                 }

JSON is easier to read, is faster and uses fewer computing resources.

Managing APIs

Because an API strategy is a business as well as an IT strategy, it requires management and oversight in order to get integrations right. A cloud-based application integration platform can help solve these challenges by providing a development environment that provides a centralized place to create, maintain and manage APIs and their performance.

If you use Flowgear to build integrations to share your data with suppliers and customers, you can now set up a subdomain for your business that will be the endpoint for all APIs. With Flowgear.io you have a place to do API management and enables Flowgear integration workflows to be bound as APIs. Using the Variable Bar node, you can create a URL that accepts variables directly into your workflows. For example, the URL


could be bound in the Workflow Details pane to an Endpoint GET that allows a third party to query information about a product code.

Flowgear provides security features for APIs so that only authorized users have access; in addition, you can build security checks into workflows for more granular security.

Benefits of an API platform

Using Flowgear for API management goes beyond just sharing your data with partners.

  1. It allows you to build composite data sources. Just about every business these days uses multiple systems for different business requirements; for example, using SAP for financial management, Salesforce for customer information, and Zendesk for service management. Via Flowgear.io you could build an API that allows someone to get consolidated information about a customer from all three systems with just one function call.
  2. The emergence of social, mobile, information and cloud – called the Nexus of Forces by Gartner, and Third Platform by IDC – is a major driving force behind the digital transformation of business. Using Flowgear’s API management tools you can build a platform that can support a number of different interactions and devices.
  3. The use of an API platform also allows a business to decouple its information access and flow from the actual business systems. In the diagram above, using an API platform would enable you to transition from SAP to Workday without changing the portal through which people and applications access data.
  4. With IT budgets and resources being stretched, CIOs and IT managers are beginning to harness the talents of business users who can code to bring technology innovation without relying on IT – these are the so-called “citizen developers“. By providing an API platform, IT departments can ensure citizen developers are accessing corporate information with the appropriate controls and security maintained.

APIs assist in integration because they provide a uniform structure for allowing communication between new and legacy applications, and for promoting digital transformation. The reason why it’s not just an IT issue is because API implementations need to be planned and built with organizational goals in mind. With an API strategy and platform in place, businesses reduce the risk of spaghetti-like integrations and improve interoperability between systems. While building APIs requires planning and design before starting to code, you also need to be able to make quick changes if required. Flowgear’s ‘agile integration’ approach allows developers to find a suitable position on the continuum between highly structured and agile project methodologies.

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