The API market is taking a big shape

Guest post by Augusto Marietti

An API is a set of programming instructions and standards for accessing a Web based software application or web tool, it’s stand for Application Programming Interface. Since we founded Mashape, "The first APIs Marketplace", I thought that could be interesting to share some numbers and major players of this new market.  image

API is a very old concept; but API in the cloud, accessible everywhere from anyone, the so called Open API is a completely new story. In 2000 the first company that embraced this route was Ebay, pushing out some API to help power sellers, than in 2002 came out Amazon and Salesforce in 2003. However the first strong signal was between 2005 and 2007 when Yahoo, Google, Flickr, Skype, Twitter, AOL, Windows Live and Facebook started to push out their APIs. Since then, the trend is growing fast year over year: it took 8 years to get to 1000 APIs, but 18 months to get to 2000 APIs; 2010 has a 2x increase in new APIs per month over last year.

The Trend

Back in ’90 websites were having just one distribution channel (HTML), now thanks to the API they can reach thousands of users through an API being available everywhere, anyone can become an ubiquity platform. Moreover back in ’90 there were just simple websites, now we have web, mobile and devices applications running through the internet. Thus, the power of information and data that can be used is so much powerful than ever before: "Not having an API today is like not having a website in the 90s" says Martin Tantow co-founder of 3Scale.

1995:  At the beginning  there were just website

2005:  First websites with API as add-ons; they were an additional access/interface to their existing data: e.g Yelp

2008:  The API has overtaken website traffic, the API is more important than the website: e.g Twitter

2009: The API is the product and websites/webapps have become web services: e.g Twilio, Simplegeo

Future: Web services become open platform, applications turn into platforms, everything is programmable and expandable

The State of Art

Google and Facebook APIs are making more than 10 Billion queries a day, a big number although we’re just at the beginning.image

On Ebay there are 7 Billion worth of items through APIs, more than 75% of all Twitter traffic comes from their API, Amazon is making dozens of millions out of the S3 APIs. More and more service were the API is the product will come out, nowadays Twilio and Simplegeo are going strong, while NPR is delivering 1.1 billion of stories a day via API.

ProgrammableWeb which is an API directory of the most important APIs just get acquired by Alcatel-Lucent few months ago.

About the API protocols and formats we’re seeing a huge increase of REST over SOAP, which remains strong with enterprises though; meanwhile the JSON has overtaken the XML; the most important APIs are now supporting OAuth.

Biz Models?

Well, we’re at the beginning of a new era, and usually people takes time to monetize new things. It happened with the web search back in 1998 (Google), online music (Napster vs Pandora), video (YouTube) and social networks (Facebook). Anyhow StrikeIron which is a company that sell enterprise software components as a service is already making millions a year. I noticed 5 major revenue streams:

API BILLING

Queries limit: It’s really simple. When you exceed a prefixed quota (hourly or daily) you will be charged. E.g. If your application is making 100 QPH to the API provider it’s free, after that, you will be charged with different prices based on the amount of queries that you’re generating.

One shot: You buy the API access to a service/component/data just one time

Subscription: Monthly payment to have access to a specific API, like Xignite does for financial data.

INFRASTRUCTURE SERVICES

Add-ons market: API is not a JSON string, API requires infrastructure and ad-hoc software to monitoring, versioning and empower them. In this area apigee is probably the best analytics tool for your API.

Management services: Obviously when your API grows you have to manage it as a business itself. Mashery here is the number one, providing you a mix of useful tools plus consulting, 3Scale is playing a big role as well.

The Future

As I wrote in this post about Ubiquitous computing everything will be connected to internet, even your toaster. Information will be available in a "liquid" format, means that it can assume the most useful shape for a particular situation or need. The market of Cloud Services alone will be worth 148.8 billion on 2014 according to Gartner. Between the 2013 and 2015 tabs such the iPad will surpass the laptop sales and by 2012 Android will be the most used operating system due to the wide adoption on multi mobile devices. An engineer UC Berkeley professor Sangiovanni Vincentelli expected in a foreseeable future (the 2017) where 7 thousand billion devices connected to the network will serve more than 7 billion people, where cars will drive us where we each have about 1,000 devices connected to come into relation with his life. APIs are cross platform by nature, I can see their distribution into every corner of internet; everything will be programmable, accessible and yes, your toaster will have an API.