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Digital Transformation: The era of the API-fueled company

Much has been said about the revolution that APIs started a while ago. API transformation and API economy became buzzwords, and the hype they generated reached numerous domains beyond the IT world. In only a few years, APIs touched every single corner of the world economy and became a ubiquitous component of our digital operations.

The growth of cloud services provided by all the incumbents has accelerated and facilitated the implementation of APIs in numerous scenarios, such as banking, finances, health care, education, communications, and social media, among others. But cloud technologies were only the beginning. Advances in the Internet of Things, machine learning and artificial intelligence, and blockchain did nothing but take APIs’ ubiquity to exponential levels.

Today, it is impossible to even conceive the development of new applications without the support of APIs. The main reason for this is the fact that APIs allow for standardization, extension and innovation of common operations such as user authorization, security, payment management and instant messaging. It is precisely this ability to standardize common operations that allowed the emergence of companies, –think Twilio– whose sole purpose is to provide a service in the form of an API product.

What is an API product?

Let’s remember first what an API is. An Application Programming Interface, or API, is the point of entry to a service. It provides the users of the service with a standard and well-defined way to use it. It hides all the complexity and details so that the user consuming the service can focus only on the output or final result. Historically, APIs have been seen as an IT-only topic. In other words, they were created either to meet a company’s very specific needs and in a way that they were only useful to internal users or as a byproduct of the company’s main line of business.

With that in mind, an API product is an API that followed a regular product lifecycle from its inception. As a consequence, an API product lifecycle is much more complex than that of a regular, non-productized API. For instance, in addition to thinking about all the technical details related to API implementation, creating a successful API product involves thinking about design and development with special focus on security and quality, marketing, monetization strategy, and change management. More on these topics in future posts.

Benefits of API products

The realization that an API can be treated as a final product in its own right, just like any other provided by a company, is what motivated the rise of the API economy. This is the foundation for all the benefits provided by API products. In order to take advantage and ultimately survive and thrive in this new economy, companies must understand that API products are great means to a total business transformation. This transformation affects not only those involved in product management and other non-IT areas but also and especially IT teams. For instance, software teams, which will ultimately develop API products, will have to have a business mindset to guide them during the whole software lifecycle.

Internal transformation is not, however, the only benefit provided by API products. Additional benefits come as a consequence of this. Once all the teams in a company have understood the potential of API products and see them as business opportunities, the sky is the limit.

API products increase and enhance the number of services provided by a company. By allowing customers and partners to use the company’s core services, the level of customization and therefore relevance to the users increase dramatically. This, in turn, increases the number of customers and business partners, which only means more revenue.

API products increase the business areas touched by a company. APIs are essentially building blocks that provide a well-defined and standard service. Once these building blocks are combined in different ways, the spectrum of products created from these combinations grows exponentially. This enables companies to enter business areas that were not considered before.

API products are also a great way for a company to profit from the data and unique information they provide. By allowing customers and business partners to access this information in a controlled and secure manner, companies can open up more business opportunities and therefore more revenue channels.


All in all, the revolution started by APIs’ ubiquity, especially as a form of business communications channel, skyrocketed with the proliferation of cloud services. They are also a great avenue to increased profit when they are treated as a true information product. For this to happen, a deep transformation needs to take place at all levels within a company. This transformation starts with a mindset change that should foster an environment in which APIs are designed, implemented and evolved just like any other product offered by the company.