DX, API Design & Documentation

Challenges with building an API Ecosystem


Brajesh De shares his practical experiences building a thriving API ecosystem in this article.

Type of APIs

Many organizations have already invested a lot in APIs for their digital transformation initiatives. They have been building a lot of different types of APIs. 

They start with implementing APIs for internal application integration, which helps them to increase their connectivity and productivity. These are called Internal APIs

Once they have seen some success developing internal APIs, a select set of them are typically exposed for partner integration, which helps them improve their collaboration with the partners. These are called Partner APIs.

A set of these APIs is further to the open world. These are called Open APIs

This is where enterprises typically start seeing a lot of success or expect lots of success from their investments. This brings innovation and new business models that increase their revenue. But we have seen that organizations do not see the expected ROI from the APIs even after so much investment. The primary reason is that organizations do not have a thriving API ecosystem.

API Ecosystem

An API ecosystem is an engine for your digital transformation. It consists of all the users in the API digital value chain. It starts with your API provider, API, consumers, app developers, business partners, customers, and end users using these APIs via the apps. 

Organizations provide these APIs to the partners; the partners have competitors, suppliers, third parties, and regulators. The API is being offered for their customers who build apps. And then you have external developers who use APIs from your organisation to build apps. So then you can have API, your internal API developers and app developers, these are all part of your API ecosystem. And you must build a thriving API ecosystem to see the actual success of your API program. 

Importance of an API Ecosystem

A thriving API ecosystem comes with a lot of benefits

  • Increases partnership 
  • Accelerates API adoption and brings innovation – because as more partners come on board, they look for different use cases to be built around these APIs. This helps build new use cases, which helps provide new digital experiences for customers improving their satisfaction. 
  • Opens up new channels of revenue stream
  • Provides newer and improved digital experiences
  • Enhances customer satisfaction
  • Reduces implementation time and cost
  • Increases ROI

Approach to building a thriving API ecosystem

Often, organizations do not have a strategic initiative, or they don’t have the right strategy, because of which they fail to have an ecosystem around the APIs. 

  1. Identify your core business assets

For example, if you’re a bank, your core business assets are banking services, providing account information or transaction information. Or, if you are an airline industry, it’s information about your flight status or booking. Or, if it’s the hotel industry, your core business asset is providing information about room availability and allowing people to make reservations. So that’s a core business.

  • Know your customer needs

For example, if a bank is providing its origination service as an API to some e-commerce, the e-commerce would like to have its customers be able to pay in EMIs.

  • Package your API offerings

If you have an API for your product catalog, you must provide API details, product details, and other relevant information.

  • Make APIs discoverable and consumable.

As an organization, you can publish your APIs and allow your developers to play around with your APIs to understand what the API provides or how the API functions. You can use either a developer portal or there are marketplaces where you can publish your APIs. They can then be discovered by different consumers, partners, or external developers. 

  • Engage partners and developers with an adoption campaign

You can think of different monetization models when you are offering your APIs to your consumers. You may need to advertise or publicize adoption campaigns.

  • Monitor and manage your entire ecosystem’s performance. 

As you provide your APIs as a product, you need to adhere to certain SLA s around the performance of your APIs because your ecosystem partners are now using them. These SLAs can be centered around availability, performance, and response time.

This six-step process is very important for any organization to adopt and follow to build a successful strategy for a thriving API system. 

Best practices

  • Build APIs which are intuitive and easy to use. Adopt a pragmatic REST API approach where you can build your APIs using the REST design principles. Use the right URL naming conventions to build your APIs and keep them simple and intuitive for the developers to adopt. 
  • Ensure that your APIs are adequately protected because data should be protected from unauthorized access. Because if you fail to protect your assets, your partners are going to lose the trust that they have on your API. So it is very important that you invest appropriately to build the right security model.
  • Adopting an API Management Solution platform is also important because this helps you to easily expose your APIs and onboard your partners in a much more agile manner, reducing overall partner onboarding time. So instead of building your own API platform, it is always advisable to go with an established API management platform.
  • Having published your API and secured them, it is important that you have a developer portal that provides a good developer experience. A developer portal should be designed in a way that it not just publishes the APIs but provides a platform for the developers to sign up easily, search for your APIs catalog, understand the input and output, play around with it, understand how it can be used in their apps, and then use it. 
  • Once you have all this, choosing the right monetization model is very important. A direct revenue model may not be attractive. You can start free and then adopt a freemium model using the revenue sharing model. For example, Google Maps is free for use for a certain transaction volume. But then, if you are using it for a business purpose, the model may be different.
  • Monitoring API performance for KPI Reporting and trend analysis is very important. You should have a good analytics dashboard around your APIs.
  • Last but not the least, seek feedback from your API consumers and implement them. You can get feedback from your developer portal or through other avenues.

To conclude, an enterprise must take a thoughtful approach to build an API ecosystem with proper governance. They should align the strategy for the API ecosystem to their API business strategy to build a thriving ecosystem and see the benefit of their investments in APIs and improve their ROI.

Brajesh De
With around 25 years of experience in leadership, consulting, architecture, design and implementation of large scale, highly distributed and scalable application integration architecture solutions, I am currently the Global lead for API Management & Integration and Digital Application Development capability at Fresh Gravity. As a visionary and an IT leader, have successfully led many large scale Digital Transformation projects for organizations across industry on a multi-cloud platform following an API First and Cloud First strategy. I am an API evangelist and thought leader with differentiated PoVs presented through various channels like authoring a book on 'API Management', published by Apress, articles published on LinkedIn and Blogs. My innovations are patented and granted across 4 countries in some of key areas like API Assessment and data veracity. I am a Google certified Cloud Security architect, MIT certified Application Security Architect and Accenture certified Master Technology Architect I am primarily responsible to globally lead the strategy & architecture and delivery enablement for the digital excellence of our clients using Cloud Native technologies viz API, iPaas and Microservice. I have successfully led several multi-cloud and hybrid cloud application migration and modernization programs for multiple leading financial organization across the globe. I have been the lead architect for Accenture’s Data Veracity solution offering. Below listed are some of my key strengths - Lead strategy discussions with CxOs to help them define their digital transformation strategy and roadmap using API First and Cloud First approach - Lead discussions with CTOs and Chief Architects of enterprise to architecture, design and implementation highly scalable flexible and decoupled architecture using cloud native technologies like API , microservices, DevOps, event driven architecture - Deep experience in implementing API Governance and security for large enterprises across industries - Incubated Accenture's API capability in India and grew it to over 2500. - Lead the initiative for Accenture's in Gartner's evaluation of global SI partners, that resulted in Accenture being positioned as the global leader for API Implementations - 2 of my innovations have been granted patent and 1 has been filed for patent - Speaker in global API conferences and author of several published PoVs and white papers - Proven experience in building, mentoring, grooming high-performance teams and industrialize best-practices.

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