API-Driven Strategy: Why Your Business Needs It

by Josh Biggs in Tech on 9th December 2020

The delivery of large digital experiences is only becoming more difficult year after year. Today, one web or mobile transaction, on average, crosses 35 different technology systems or components, compared to 22 only five years ago. 

As companies integrate IoT, wearable, and other intelligent technologies into their multi-channel ecosystem, success is adopting APIs strategies.                                                                                  

The API (Application Programming Interface) has evolved into a digital adhesive that enables developers to create new software applications and allow businesses to develop new revenue streams, optimize their market strategy, and provide better customer experiences. 

We currently live in an “API economy,” where APIs are becoming the norm. APIs and SDKs can fundamentally change your organization in today’s dynamic and ever-changing business environment. 

Customizing the API strategy can foster innovation, collaboration, and improved customer service. Organizations that fail to integrate all their different IT systems and harness the API’s power may lose market share.

What Does It Mean To Be API-Driven?

The API (Application Programming Interface) is a software intermediary that allows two applications to communicate. 

Without the API, the digital features we are used to, such as hotel reservations or software downloads, would not have been possible—the APIs work in the background to help connect us to the information and technology we need. 

However, companies that do not prefer to use APIs in their digital strategies can lose sight of the benefits of consuming APIs. 

It makes it easier to integrate and connect people, places, systems, data, and algorithms, which create new experiences, products, services, and business models. 

Not all organizations need to create APIs because they are meant to be consumable; their creators intend others to use and benefit from their APIs. 

Businesses should consider how they can incorporate APIs into their digital strategies. But as a business user or C-level manager, the API may not seem relevant to your business. 

However, given the speed of rapid technology development and the benefits APIs can bring, the next step in the digital business is to adopt an API-based strategy.

What API-Driven Means For Businesses 

Having a business model based on APIs means investing in APIs and using them to optimize, guide, and improve business processes and operations. Including APIs in corporate decision-making ensures that they will form the basis of the enterprise’s digital strategy. 

“We already live in an API-based economy where information technology directors need to look beyond the API as a technology. Instead, build on it to build their company’s business model, digital strategies, and ecosystems,” said Paolo Malinverno, Research Vice President at Gartner.

By embracing APIs, companies should understand that API consumption is a vital part of their digital strategy to achieve business flexibility, optimize existing processes, and accelerate time-to-market. 

Business Benefits Of An API-Driven Strategy

Companies that implement and have APIs can expect the following benefits: 

Enablement Of New Technologies

The modern architecture of cloud services applications, IoT devices, and new technologies relies on APIs. According to an article written by Gartner, “APIs are now central to the architecture of applications, as they provide free integration, as well as data channels behind mobile applications and many IoT devices. 

Also, it can contribute to the development of internal innovations, providing the necessary dynamism and flexibility.

Reduced Costs And Time To Market 

One of the main advantages of the strategy based on API is a reduced development effort and faster time to market. Developers understand that most of the functionality they need to embed in an application already exists elsewhere. 

They have learned not to spend precious time and resources perfecting something that has already been perfected, but rather to rely on cost-effective APIs from third-party platforms or to use APIs they have already created. 

By engaging and using APIs, developers can focus on the faster implementation of their applications’ unique functionality, helping businesses save money and resources. 

In a world where technology is continually destroying workflows, customer expectations, and even entire industries, the ability to quickly and cost-effectively complete tasks are vital. 

Superior Digital User Experiences 

Since your developers will build solutions on any channel through API, it will create a better and more exciting experience for any audience, whether customers, partners, or your employees. APIs can help provide services such as personalization, data collection, and integration. 

For example, an IP geolocation API can identify your user’s lives and provide the most convenient or geographically closest offer. Also, as APIs’ number and popularity grow, the available features will only develop and improve. 

Encouragement Of Collaboration

The main advantage of the open platform approach with SDK and API is that enterprises can promote external innovations. 

The solution to your organization’s biggest problem can be created by someone outside your organization, perhaps even in another part of the world. External data offerings allow vendors and developers to create products or platforms. 

Your organization may choose to select suppliers or purchase innovative technologies instead of creating its solutions in-house.

API and SDK are the structural elements to create an open platform on which systems interact, make transactions, and negotiate with each other. For this reason, they become an essential new business tool to capture more market share, increase customer engagement, and meet shareholder needs.

5 Reasons Your Business Might Need An API

Closer integration with an organization’s core business objectives and business needs can help develop more effective APIs and increase the likelihood of approval of internal funding. 

These are the five ways your business model or product can benefit from implementing an API:

  1. Syndicating Content

If you are producing and selling information, an API can help you expand your market on various online platforms and attract new audiences. 

Most people access information is much more fragmented than in the past, and there are many access points, portals, sites, and applications they use to find out what they need to know.

The Associated Press Information Agency (AP), which is over 170 years old, distributes most of its content to partners through a range of APIs that allow users to search for and download AP images and broadcast breaking news in a variety of categories. 

Bloomberg Financial Information Provider provides unlimited access to raw financial data to corporate customers through its API, leveraging, and strengthening its dominant position in this market. 

The BBC offers standard program listing data through its API and conducts innovative tests to add additional data to current broadcast results.

  1. Adds Value To Software As A Service (SaaS) Products

SaaS-based products are well suited for API integration since the software is already built on a distributed model. 

While many users are pleased with the manufacturer’s functionality and interface, power users and large enterprise customers often require access to the backend to better integrate software into their workflows. 

CRM, Zoho, and Capsule vendors offer free backend API access to all their customers, creating a more attractive offer for potential customers.

  1. To Upsell Services To SaaS Customers

While some SaaS vendors provide API access bundled with their packages, such as Zoho and Capsule, mentioned above, others limit this functionality to higher-level subscribers. 

A global SaaS CRM vendor, Salesforce has adopted this model and uses its API to attract larger customers up the subscription ladder. 

The rapidly growing project management provider, Monday, is doing something similar. It offers full API access to tempt users from their basic $25 per month subscription to their $39 package.

  1. Build A Platform For Innovators

The commercialization and development of platforms and digital ecosystems have undoubtedly formed the basis for the most successful companies in the past 20 years, as demonstrated by Google, Apple, and Amazon. 

However, you don’t have to be a technology giant to benefit from creating a platform, you can be a start-up on its way to success. Niche providers in various industries are doing it successfully. 

Marketing data provider Majestic allows third-party developers to repack their data through APIs and create innovative products based on them.

  1. White Labelling Data With An API

Extension of coverage is often best achieved through networks and the marketing expertise of third parties. Larger travel sites do this over the years to better monetize their data assets. 

Kayak offers food for its travel data set accumulated from the 2 billion searches they processed in 2018 and the 60 international online sites they own. 

Expedia offers more functionality through an API that allows third-party sites to process reservations and hotels to manage reservations through their sites.

Leveraging its experience in AI, 5G, and cloud technologies, Huawei can expand the capabilities of scripts for different domains and continuously create value for customers.

These are just some of the reasons how an API can improve your data-driven business model. Deciding how an API revenue model fits into a more comprehensive business model requires a good understanding of customer needs and usage options and what competitors are doing, and end-user price sensitivity. 

In any case, ignoring the potential benefits of expanding your market presence through API is probably not a wise move.

Begin Your API-Driven Strategy 

If you are ready to take advantage of the benefits of API consumption, here are some things to keep in mind: 

Look For An API-First Vendor 

The first step is to find the supplier who will use the API first. It means that the vendor is developing an API specifically for its users. These vendors prefer to create secure, developer-friendly, and standardized APIs. 

It would help if you looked for a vendor that follows the OpenAPI specification, which is the largest framework to date for designing, creating, documenting, and consuming the API. 

The OpenAPI specification is platform agnostic and language. It is used by companies like Netflix and PayPal. Businesses can be assured that the API from the first API provider will allow them to take full advantage of the benefits we mentioned above. 

Best Practices In Leveraging APIs 

How you use and apply the API will depend on your business and how you use it, but no matter what API you use, you should do the following:

  • You can read the API documentation in the API documentation 
  • Write down for yourself which APIs you use
  • Ensure you have an open and future-oriented API architecture that can be well adapted to changing future needs


As APIs become increasingly crucial to digital success, their evolution can open up exciting business opportunities; one such exciting achievement is headless APIs. 

  • APIs and SDKs are rapidly becoming the new norm and essential business tools to capture more market share, meet customer demands, and maintain shareholder happiness.
  • They are a building block for an open platform and allow your organization to take advantage of IoT and big data.
  • The API will allow your organization to be more innovative and collaborative.

The growing importance of API in our daily lives is becoming increasingly evident. Think about how using an API can provide new business opportunities for your company. 

Categories: Tech