Should Your Company Offer an API?

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APIs are a hot topic among developers these days. Companies ranging from startups to large enterprises are offering them, and APIs have, to an extent, become the lifeblood of interdependent web services.

So how do you decide whether or not your company should offer an API?

To deliberate this question (and to learn about some of the tools available for offering APIs), we’ve turned to a panel of experts whose daily business is the building, distribution, management and monetization of APIs. Here’s what they have to say about choosing whether or not to offer that kind of access in the first place.

To API or Not to API?

Oren Michels is Mashery‘s CEO; his company does API management and strategy for more than 100 brands and 25,000 applications. He told us in an email, “”Ultimately, the API is a means for growing your business — and I use the term ‘business’ to include whatever your mission is, be it traffic or commerce or a nonprofit improving the world or a government entity serving its constituents — faster and larger by virtue of engaging with others. Understand how and why your API can do that and you will be successful.”

Shanley Kane works on the product team at Apigee, a company that offers a range of API tools for developers and software companies.

She says the first thing to do when considering building an API is to identify the goals and audience for that API. “This will inform every step of the API strategy,” Kane says, “from design to go-to-market. Companies open APIs for many reasons — to encourage developer innovation, monetize data, connect with partners or get to mobile and connected devices. Setting out with a clear objective that is tied to business goals and has a defined target market — whether large partners or independent developers — is critical to successful API programs.”

Kane also says to keep an eye on your competitors. APIs are products like any other, and the current ecosystem of platforms and services is vast and intricate. If your API is meeting the same need as a competing product, Kane says you have to ask yourself what makes your service or your API different — “How will your API stand out and win?”

Augusto Marietti founded Mashape, a marketplace for building, distributing and hacking with APIs. He gives decision makers a thorough checklist of questions to consider when thinking about whether or not to offer an API. Take these questions into early meetings and make sure each one is thoroughly answered before you move forward.

Do you want to have your API as a standalone product or an extension of your service?
Are you targeting the consumer or enterprise world?
Do you want to make money out of that or just see third party devs building on top of your platform to expand your service?
Who is your customer?
How much do you think you’ll need to scale?
How much does it cost to you?
What is your goal one year from now?

Dimitri Sirota is an executive for Layer 7 Technologies, which offers its own suite of API management tools for the enterprise. Accordingly, he comes to the table with a different perspective from that of the typical web startup developer.

He says companies should consider whether “the benefit of opening up my data in terms of reach and revenue outweigh the risk and cost.” He also cautions larger companies to fully define which department or specific personnel will “own” the product. He says to start out with a clear picture of your long-term goals — why are you offering an API? Is it for “revenue, retention or reach?”

Finally, if you’ve decided that the product in and of itself is a good idea, Kane says you have to plan for money and personnel. “Successful APIs need care, feeding and love,” she says. You must determine if your company is willing and able to devote the resources needed to build a successful API team and program, which includes the the need to “adapt the API and respond to user feedback, employ marketing resources to get the word out, and hire a community manager or developer advocate to make sure developers are taken care of and getting what they need.”

And while you might not need or plan to make money from your API (more on that in later posts), monetization discussions should occur early on, Kane says. “It’s very important to determine if monetization is a main goal of your service and if so, how you intend to charge or benefit from it. Offering a free service, then charging for it later, can have negative community backlash, so monetization is important to think about early and often. And if you decide to go free and open, identify the business metrics for it and how it fits into your business model.”

Michels also added that, when considering your API options, you need to consider the different types of devs that may be using it. “There are three major developer audiences for APIs: internal developers, second-party partners like biz dev partnerships or contracted outside app developers or affiliated companies, and third-party independent developers who may be developing new innovations that the API provider won’t even know about … Each audience has different needs and presents different opportunities, and you may want to address a few major second-party partners’ needs first before opening it up to a broader developer community.”

The Best Tools for the Job

Of course, our experts all work for companies that specialize in API management, so you’d likely be in good hands going to any of these companies when offering your own API. But we also asked them for basic advice on the kinds of tools you’ll need to use and understand when building and managing an API for your company or service.

Sirota says, “You need an API proxy, a gateway to regulate what APIs get exposed to whom and when. The gateway is where you define the security policies, SLA controls and any integration/data mapping requirements. You also need API monitoring and lifecycle management … to address versioning of APIs and delivery of APIs across development, test and production. You also need visibility into usage.”

Finally, Sirota adds that you’ll need to create a developer portal of some sort. “This is the developer-facing piece, and it addresses all the developer onboarding, plan management, information discovery about the APIs, etc.”

Kane recommends GitHub as “a great resource for tracking issues, sharing code and documenting your API.” She also says that having clear and accessible documentation is “essential” for developer onboarding, and she recommends Google Groups for communicating with third-party devs using your API.

Kane says companies should be sure to get their APIs listed in ProgrammableWeb’s directory, and she recommends checking out Stashboard, an open-source status dashboard for APIs.

Stay tuned for more posts on getting started with offering APIs. And in the comments, let us know your own recommendations for offering APIs.

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