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What is an API (breaking down the acronym)?

Application: Think of an application like an ATM. When you walk up to an ATM, you expect it will allow you to access your account and complete a transaction like withdrawing cash. Like an ATM, an app provides a function, but it’s not doing this all by itself—it needs to communicate both with the user, and with the “bank” it’s accessing.

An app deals in inputs and outputs, too. A web, mobile, or back-end application is like a machine that solves a specific problem. The software may be a customer-facing app like a travel booking site, or a back-end app like server software that funnels requests to a database.

Programming: APIs allow the ATM to communicate with your bank. The programming is the engineering part of the app’s software that translates input into output. In other words, it translates your request for cash to the bank’s database, verifies there’s enough cash in your account to withdraw the requested amount, the bank grants permission, then the ATM communicates back to the bank how much you withdrew so that the bank can update your balance.

Interface: A user interface (UI) is how we interact with an application. In the case of the ATM, it’s the screen, keypad, and cash slot—where the input and output occurs. We enter our pin number, punch in how much cash we’d like to withdraw, then take the cash that’s spit out. Interfaces are how we communicate with a machine. With APIs, it’s much the same, only we’re replacing users with software.

In a nutshell, that’s an API: an interface that software uses to access whatever currency it needs: data, server software, or other applications. In the case of the ATM, the machine is the end-user of an API, not the customer pressing the buttons. It’s the same in the digital world.

The Components of APIs: What You’re Sharing and Who You’re Sharing It With

1. All APIs begin with shared assets—they’re the currency of an API. They can be anything a company wants to share—whether that’s internally between teams, or externally with other developers: data points, pieces of code, software, or services that a company owns and sees value in sharing.
2. Next is the API, which acts as a gateway to the server. It provides a point of entry for your audience—developers who will use those assets to build their own software—but it also acts like a filter for those assets. You never want to open up your entire server and all of its contents to the outside world. APIs only reveal what you want them to reveal.
3. The immediate audience of an API is rarely an end user of an app; it’s typically developers creating software or an app around those assets. This is where assets take flight, yielding creative, new ways to implement data that previously, may or may not have had any real business value to its owner. It also lets developers use reusable software components so they’re not repeating work that’s already been done.
4. All of this results in apps that are connected to data and services, allowing these apps to provide richer, more intelligent experiences for users. API-powered apps are also compatible with more devices and operating systems, providing more seamless experiences.
5. In the end, the beneficiaries of these apps are the end users themselves. The apps enable end users tremendous flexibility to access multiple apps seamlessly between devices, use social profiles to interact with third-party apps, and more.

How do APIs work?

APIs have endless business opportunities. So how can you leverage the functionality explained above? Here are a few ways to think about APIs and how they can work for you.

• APIs act as a doorway that people with the right key can get through. Want to give specific people—but not everyone—access to your assets? An API acts like a doorway to your server and database that those with an API key (or a paid subscription) can use to access whatever assets you choose to reveal. A key could give a user read access, write access, or both—it’s up to you.
• APIs let applications (and devices) seamlessly connect and communicate. An API can create a seamless flow of data between apps and devices in real time. This not only lets developers create apps for any format—a mobile app, a wearable, or a website—it allows apps to “talk to” one another. This is the heart of how APIs create rich user experiences in apps.
• APIs let you build one app off another app. Entire businesses and popular web applications like Hootsuite, Zapier, and IFTT (If This Then That) have been built solely on creative ways to leverage APIs. APIs allow you to write applications that use other applications as part of their core functionality. Not only can developers get access to reusable code and technology, they can leverage other technology for their own apps.
• APIs act like a “universal plug.” What if all of those people with keys to your door speak different languages? With an API, it doesn’t matter—everyone, no matter what machine, operating system, or mobile device they’re using—gets the same access. Think about those universal outlet plugs that let you use an appliance in any country’s socket. An API is a lot like that; it standardizes access.
• APIs act as a filter. Security is a big concern with APIs—after all, you’re giving outsiders access to your servers and all they contain—which is why they have to be carefully constructed. APIs should give controlled access to assets, with permissions and other measures that keep too much traffic—or malicious traffic—from bringing down your server. This is a very important API design consideration for industries that are heavily regulated, like healthcare and finance.

Public APIs vs. private APIs: Wwhat’s the difference?

Two Types of APIs with Two Very Different Value Chains

A public API is probably what first comes to mind when you think about APIs: the Twitter API, Facebook API, Google Maps API, and more. But these are only a small portion of the APIs that exist around the web. While you may not hear much about them, private APIs are far more common (and possibly even more beneficial, from a business standpoint). Public APIs are much more restricted in the assets they share, given they’re sharing them publicly with developers around the web. Private APIs are all about productivity, partnerships, and facilitating service-oriented architectures.

Private APIs: The Self-Service Developer & Partner Portal

Private APIs are revolutionizing how things get done within companies. By providing an open architecture, private APIs give developers an easy way to plug right into back-end systems, data, and software, letting engineering teams do their jobs in less time, with fewer resources. It’s like a self-service user experience for internal developers.

A private API can save time and resources, streamline collaboration, and give developers unfettered access to everything they need. More companies see value in “consuming their own APIs.” In fact, of the billions of API calls made, around two-thirds of those calls are companies making calls to their own APIs.

Private APIs can also reduce operating costs, eliminating the need for layers of web services, back-end applications, and server resources. On the partnership front, versions of private API can be customized for partners, enabling faster technical integrations.

Takeaway: Companies primarily use private APIs to improve agility, flexibility, and velocity. This often translates to remaining competitive, higher productivity, and improved efficiencies.

Public APIs: Granting Outside Access to Your Assets

Open APIs are all about letting the outside world in. They provide a set of instructions and standards for accessing the information and services being shared, making it possible for external developers to build an application around those assets. This entire concept (and APIs in general) is somewhat borrowed from the idea of open-source software: create it, open it up to users, then let them run with it.

Some public APIs are even growing faster than original lines of business. Companies like Salesforce are seeing business through their APIs outpacing their original focus, reportedly generating 50 percent of their revenues through APIs.

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