In a previous release of “What the Tech?”
we discussed why you should
integrate API management into your business strategy. The benefits are plentiful, key among them is that
when you open APIs to third-party developers your organization can derive new revenue, reach new audiences, and
realize greater innovation.
Despite the clear benefits and successes of an API project, the actual process of opening and managing your API can
be challenging. Oftentimes an organization’s goals for the project are vague. Perhaps they want to realize more
revenue or reach new audiences. That’s great, but such a large investment of time and resources warrants more
definably articulated goals. Without that laser focus, you have nothing to measure or track progress
Another important factor for API success is user adoption. You can theorize as much as you want about the market
opportunity for your API, but only actual usage data will help you better understand your user’s needs and help
you craft an API strategy that is clearly aligned with those needs.
The good news is that a simple and trusted approach, borrowed from product development best practices, can help
you diligently determine the value of your API project as well as its addressable market. And that’s a good way
to look at it—APIs should be treated as products. So it follows that during the research phase you should:
- Test your market (often with a limited pilot).
- Track usage and feedback.
- Adjust the API model (i.e. your product) based on what your market or user data is telling you.
- Rinse and repeat. If a feature is not getting traction, redefine your API product, i.e. bundles of
Let’s assume you have fifty APIs that have the potential to be opened up to various user groups. In all
logic. But by implementing a pilot open API project you can quickly determine which are relevant and which can
be sidelined (or continuously iterated)—ultimately saving yourself the time and cost of maintaining a bunch of
Of course, the research phase is only one piece of the product development pie. Let’s dig a little deeper into
each phase of a tried and tested open API project roadmap:
Phase 1: Pilot—Get to Know Your Users
As mentioned earlier, a critical part of any open API project is understanding your users. What APIs are
important to them? How are they using them and how often?
The right tools can help with this. Choose an API management platform that offers an inexpensive tier for market
testing. As with the early stages of product development, try to keep your investments reasonable during this
exploratory phase. You can easily switch to another platform down the line, so don’t get too hung up on the
bells and whistles of your selected platform at this point. The most pertinent things to focus on in phase one
are your data, content, and business logic, not your choice of platform.
During the pilot, use built-in analytics in the platform to relentlessly track users (where requests are coming
from, how long users are coming to your application, the number of requests per day). You may discover that your
users prefer a certain authentication method, that requests come from a specific type of device or geography.
Tweak your APIs and policies accordingly. You might want to consider offering your users free sets of basic APIs
on a trial basis to help boost your testing pool.
The data gathered during this phase will tell you where to focus your effort based on which APIs to weed out,
which ones are gaining traction, how they’re being used, and so on. It will also help you eliminate
under-performing/under-utilized APIs, adjust them, or even mashup your APIs.
Phase 2: Define your Open API Model
Now that you’ve formed a better understanding of your API user base you can begin to package API offerings that
meet their needs and address your business objectives.
If the goal of your API is revenue generation then your initial task in phase two is to determine which API
offerings can help you maximize that revenue. In other words, defining your API model.
To specify your API model, ask yourself several questions:
- Which APIs do you need to open up to third-parties (partners, suppliers, vendors, franchises, etc.)?
- Which ones will you open up to the wider public?
- What API packages and limit policies make the most sense?
- Which payment methods create the least amount of friction with the developer community?
Another important consideration during this phase is the total cost of ownership (TCO) of the API management
solution you intend to deploy (which may or may not be the same as the platform used for the pilot project), and
how this will impact the profitability of your API project. Your calculation should also include the cost of the
payment system. Note: Built-in payment systems are convenient but costly, so be sure to factor this
into the profitability equation.
Once defined, your API model must be articulated as a requirements document. Be sure to loop your IT team or
vendor for this stage of the project to ensure a seamless execution of your new product implementation on the
chosen API management platform.
Phase 3: Configure the API Management Platform
Now that you’ve pruned redundant APIs from your inventory, optimized your APIs, and identified the TCO of your
API management solution, it’s time to set up the APIs on the platform. Think of this stage as your product
packaging phase. You need to “gift-wrap” your APIs in a way that will excite and entice the development
community. Some of your to-dos at this stage include:
- Define the logic transformation for any legacy APIs. You don’t need to re-write your original back-end SOAP
services, but be sure to set-up a REST façade on the API management platform for those legacy web services.
- Define authentication between proxies and the back-end system. For example, set-up mutual certificates or
other forms of authentication.
- Define your API packages and their limit policy (e.g. API call quotas and rates), prices, subscription
At this point your initial API configuration is complete. All your APIs, technical documentation, pricing, etc.
are available on your developer portal (e.g. http://API.YourCompany.com/).
Phase 4: Integrate
Your API project is almost ready for external developers. But first you need to ensure your revenue model is in
place so that you can begin charging for your data, content, or logic. Some API management platforms don’t
include built-in payment gateways—so that’s a consideration. Or perhaps you’ve chosen not to use your platform
provider’s payment system. Either way, you’ll need to integrate your preferred system into your API
In fact, phase four involves several integrations and this can get tricky. Typical integrations include user
management systems, subscription management systems, as well as the payment gateway. If you lack the expertise
in-house, consider outsourcing to a vendor with API integration experience.
Finally, it’s time to support and manage your APIs. Ongoing tasks include small tweaks to your APIs, usage and
performance trend analysis, and seeking new opportunities to expand your user base.
Reaching phase four is a significant achievement. Few organizations exhibit such strong commitment and discipline
to API management. By establishing deep integration between their API platform and user/subscription systems,
these organizations have recognized and realized the potential for solution cross-sell among their user pool and
the additional revenue opportunities this brings.
More than simply a piece of programming, an API is a powerful business tool. Which is why it’s important to
manage the lifecycle of your API as you would any other software product. Hence the significance of having
goals, understanding your audience(s) needs, testing, fine-tuning, calculating profitability, and even adding a
marketing plan to the mix—each of which combine to form a roadmap for your API.
In the final part of our series on API management we’ll discuss the key ingredients of a profitable API. Stay
 A mashup occurs when complementary APIs are combined to
create a new application that power boosts the combination by drawing on content and functionality from
multiple sources. For example, Google and Bing Maps are heavily used in mashups and often combined with
other data sources to power consumer apps such as weather, real estate listings, restaurant locations, and
To learn how EastBanc Technologies’ API experts can help your organization thrive, contact:
Jill DaSilva | Director of Sales Operations | firstname.lastname@example.org