What is an API?

Dion Short
August 1, 2020

If you’re into Chinese astrology, you will know 2017 is the year of the ‘Fire Rooster’. However if technology is more your forte, odds are you have heard that Forbes believes 2017 is the year of the API, or rather the API economy and is the driving force behind most of the digital disruption in both the enterprise and consumer space.

Integrated digital platforms have become instrumental in the way we operate with the world around us. We have progressively become dependent on using social network profiles to create accounts in apps and websites, third-party services and even online shopping, and it is all done through a technology known as Application Programming Interfaces (APIs). They are the reason why websites can embed Youtube videos, Uber can find your pickup location on a map, and PayPal can facilitate online transactions.

Simply think of it as a coding contract that specifies the ways in which one application can interact with another. A messenger delivers a request to the provider you’re requesting it from, and then delivers the response back to you. This concept is nothing new. In fact, they have been a key part of software development for decades and exist to provide building blocks for developers to access certain system features and functionalities much faster without having to reinvent the wheel and write code from scratch.

Today, they connect us with much of what we do online, but even their internal use within companies is becoming a wave of the future due to their many benefits and has created new business models. Linking isolated systems and allowing different systems to communicate with each other, APIs are the connectors of the 21st century. Recognised as an essential component of a company’s digital architecture, this development technique has become a business model driver and buzzword.

In a commercial setting, APIs also exist to provide a revenue stream for organisations who sell access to their code. Some organisations such as Talent App Store provide an open integration hub where APIs are openly available to help developers with building apps, whereas an organisation such as Expedia generates over 90% of its revenue from third-party websites using their APIs to let people book cars, flights, and hotels.

As Raconteur illustrates, thousands of APIs are allowing companies to work together and share data in powerful ways: