API Business Models

API platforms and an API-first approach to building better external and internal connections


It used to be that getting value from software in a business was mostly about what technologies were available, and your ability to develop those that weren’t. Creativity – choosing how and why to use those technologies – largely followed.

APIs – Application Programming Interfaces – have changed that, blurring the boundary between intent and execution. These days coming up with a business model gets you a long way towards where you want to go. Selecting and managing the right APIs gets you the rest of the way there.

As APIs have developed, they’ve allowed more and more applications (including APIs themselves!) to interact in an ever-increasing number of ways. Bundling APIs together to achieve an end result is often called a “mash-up”. For example, if you were to mash up  an API defining locations with one facilitating messaging and one permitting interaction with billing data, you have yourself a simple ride-hailing service such as Uber.

This presupposes what has become known as an “API-first” approach. When you know APIs are going to do the heavy lifting when it comes to integrating the systems you need to drive your business model, you can concentrate on the business model itself. That’s what I mean by the line between intent and execution being blurred: knowing exactly what you want to do comes first. Then you assemble and manage the APIs that allow you to do it. You don’t have to reinvent the wheel when you’re starting out. You can take existing technological components, existing business, reconfigure them, and come out with something new.

APIs today really suit an incremental, component-led approach, especially when you take advantage of a technology called containerisation. This component-led approach is reflected in the rise of what are called API marketplaces, which catalogue APIs and offer them according to one of several payment models, and API platforms, which allow for API management and a host of supporting tools and services for developers.

An API, like a dog, isn’t just for Christmas. You need to love it, and nurture it, and look after it, and look at the data that’s flowing through it and understand what that data is doing and what value it’s bringing to you. An API platform is like a pet store; it gives you what you need to make sure your API grows up healthy and vigorous. An important point is that an API platform is not a standalone product. It requires a cross-functional team to enable conceptualisation, deployment and support to maximise the platform’s contribution to effective digital transformation.

Quite often API environments are initially used for external-facing business development, but once everybody realises their utility, something like 40 per cent of the traffic ends up becoming internal. An interesting pattern which we see emerge amongst our clients is that lightbulb moment where they realise the power of APIs, and embrace broadening the scope of their application to solve internal issues. The teams will suddenly start asking: “Why can’t we connect our leave application to our pay application in the same way? Our HR systems to our management systems?” And the answer is, of course you can.

To use another metaphor, an API platform is like the Babel fish in The Hitchhiker’s Guide to the Galaxy. If you put the Babel fish in your ear you can  understand any language. If you put an API platform front and centre in your development, you facilitate interactions between applications. The API doesn’t care whether that application is internal or external. (For interest’s sake, we talk about anything going external as northbound, and anything becoming internal being southbound.) And what this quite often means is that with an API, you can find efficiencies, improve useability and extend the longevity of systems within an organisation.

Modern business requires interconnection. The ability to connect to partner ecosystems to enable your business processes, create new products and distribute your offerings digitally.  Every modern company needs an architecture and an API ecosystem to become a platform business and compete. Connect with fintechs, telcos and eCommerce providers to find new routes to market.

This article originally appeared here.

Colin Millar

Colin Millar

MTN MADAPI and Chenosis Partner Executive
Colin Millar arrived in South Africa with Openwave Systems to work on the first Mobile Access Gateways at Vodacom in 2005. After some 10 years with Openwave, during which he rose to lead the MEA region, he made the transition to Intel where he led its Pan African Telco API Practice. More recently he has worked with EOH/iOCO to help with building an ‘API First’ capability, as well as leading the rollout of MTN’s API Development and Application Platform (MADAPI) across Africa, and acting as Chief Sales Officer for MTN’s Pan African B2B Marketplace initiative – Chenosis.

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