API’s are fast becoming the thing to do to grow your business in today’s interconnected business climate. If you still don’t know what an API is – check out this blog by my colleaguewho does a great job of explaining API’s.
Why are API’s so popular? Well – because the biggest names in business have been using them for quite some time now to grow. And in the past few years, people are catching on. API’s are nothing new. But now that the term Open API is part of our daily vernacular, we are seeing a surge of interest. So, what are some of the potential benefits of providing an Open API as part of your business strategy? Beyond the obvious answer where the API is actually the product and it is pay to use, there are other benefits.
API’s Drive Revenue
API’s have the potential to drive revenue to your business in a number of ways. You can use it as a way of pushing your products through to other channels; as well as allowing others to develop on your open API platform and sell their products that are integrated with your API. My favorite example of this model is Salesforce.com.
Salesforce.com uses an open API that pushes its product out to the world in a multitude of ways. You can get your Salesforce reports on your smartphone, plug in your VerticalResponse email campaigns to your Salesforce account, and track your marketing automation with Marketo. All of these outside products and services are plugged in to the mothership (Salesforce) using the API. This helps the SaaS giant to provide additional value to its customers that are paying a fairly hefty per user license fee.
But there is an important distinction here – your API has to provide a very valuable service. People aren’t going to pay for nothing. So keep that in mind before going down this road.
API’s Gather Precious Data
There is more value to an API than just monetary. Think about Facebook or other social networking platforms – they aren’t charging for their service nor are they charging for the use of their Public API. What they are receiving, however, is probably worth more to them than the revenue they potentially lose from providing a free platform: valuable information.
Facebook essentially runs on its data from users. It collects so much about us and our lives, and then in turn shares that data with other applications running on the Facebook platform and vice versa. This data is used to target users for ad campaigns and promoted posts. This is all approved by users, because every time you download and app that integrates with Facebook, or you use your Facebook login to login to another app, you are given the choice not to share your information. Because Facebook provides such a valuable service, most people just accept the consequences of sharing private data.
Facebook and other providers like it are using API’s to create strategic partnerships that benefit both companies. And Facebook’s API is almost a no-brainer for most developers to use. This is an important distinction – you must provide a low barrier to entry for developers to want to use it, otherwise they will find another API from which to integrate.
API’s Build Your Brand
Who do you think of when you think of a mapping application? The answer is probably Google Maps. Why? Well to be honest there are a lot of reasons. But one reason is Google Maps has a reputation as the leader in mapping services, so many developers like to use the Google Maps API on their web and mobile apps. (Not to mention, Google makes it easy, following the same logic as Facebook with a low barrier to entry).
Google has built its brand as the leader in mapping services because it offers an open API that gives most developers what they need for free. They also have upgraded APIs for businesses that need more than just the simple integration. Think about it – if Google had a private API and didn’t offer it to developers to integrate into their applications, it would have missed the boat on building its brand.
Not every technology or service offering is a good fit for an open API. But as a technology consulting firm – we can help you decide if it’s a good strategy for your business so contact us for help!