the state of apis - apigee · the state of apis © 2017 apigee all rights reserved 2 the state of...

© 2017 ApigeeAll Rights Reserved

2017 Report: How APIs Power Digital Ecosystems

The State of APIS

© 2017 Apigee All Rights Reserved

2

The State of APIs Report 2017Whether they are digital natives like Google, Twilio, and Stripe, or enterprises like Walgreens, Ticketmaster, and Pitney Bowes, companies build successful digital platforms by fostering a thriving ecosystem of developers and partners.

The 2017 State of the APIs report identifies factors that contribute to building successful digital platforms and explores how enterprises can build or participate effectively in digital ecosystems.

This report was built based on the hundreds of billions of API calls in the Apigee Cloud from hundreds of customers (in 2014-2016), as well as surveys conducted with customers across a variety of verticals.

Percentage of respondents whobelieve their organization measures the

business success of their APIs

0%

25%

50%

75%

100%

Top Quartile Second Quartile Third Quartile Bottom Quartile

Strongly AgreeSomewhat Agree

API Traffic Volume (2016)

0.7% 4.7%4.4%

Top Quartile90.2%

Distribution of Top-Quartile Companies by Industry

2% 3%

Technology32%

1%

5.9%0.4%17.6%

Media37.9%

Platform Adoption(Growth in apps)*

-50%

50%

150%

250%

Months

0 5 10 15 20 25 30

Top QuartileBottom Quartile

33

1Digital platforms: the winners take most Pages 4-10

• Successful platforms experience non-linear growth

• APIs are the building blocks of digital ecosystems

• Thriving ecosystems dominate API traffic

• Data-rich industries lead the way

• Google Maps: a digital ecosystem

3Ecosystem stories

Pages 19-22

• Walgreens

• Arity

• Act like a scrappy digital native


2How to build a winning digital platform Pages 11-18

• Focus on ecosystem capabilities

• Consider APIs as strategic toyour business

• Lead with business use cases

• Obsess about developers & build strong developer programs

• Treat APIs as products & track success with business KPIs


14

Digital platforms: the winners take most


5

Rise of platform-driven businesses


6

Successful platforms experiencenon-linear growthSuccessful business platforms enable third party developers to easily consume APIs and build applications. Leading platforms offer open APIs, strong developer programs, and focus on clear success measures.

Platform adoption(growth in apps)*

-50%

0%

50%

100%

150%

200%

250%

Months

0 5 10 15 20 25 30

Top Quartile Bottom Quartile

* Number of active applications consuming an enterprise’s APIs in the Apigee customer base.

See p. 23 for report methodology


7

APIs are the building blocks of digital ecosystemsOutside innovation has exploded as APIs enable partners and other third parties to easily build applications on an enterprise’s digital platform.

Apps developed by third parties* are on the rise

Valu

e Ax

is

0%

1,000%

2,000%

3,000%

4,000%

Date

2014-01-01

2014-07-01

2015-01-01

2015-07-01

2016-01-01

2016-07-01

* Apps that were registered by external developers of Apigee customers


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Thriving ecosystems dominate API trafficA healthy digital ecosystem is measured not only by the number of applications on the platform, but also the API activity.

In the Apigee customer base, top quartile companies account for 90% of all API traffic.

API traffic volume (2016)

Bottom Quartile0.7%

Third Quartile4.7%

Second Quartile4.4%

Top Quartile90.2%



9

Data-rich industrieslead the wayTechnology, media, and information services industries lead the pack in building digital business platforms with APIs.

Distribution of top-quartile companies by industry

Other2%

Retail3%

Technology32%

Telecommunications1%

Financial Services5.9%

Healthcare0.4%

Information Services17.6%

Media37.9%



10

Most successful ecosystems benefit from network effortsOver two million active apps and websites leverage the Google Maps API every week. This large ecosystem contributed to Google Maps’ growth of over 300% during the last two years.

Equally important, some companies that use Google Maps APIs contribute a wealth of new data that improves the overall Google Maps user experience. Rich data about hotels, including

images and bookings

Maps API

Geocoding API

Places API

Places Autocomplete API

Travel & hotel aggregators


211

How to build a winning digital platform


12

Focus on digital ecosystem capabilitiesPlatform initiatives focus on enabling developers and partners, connecting apps, data, and devices, and innovating on new business models.

APIs underpin both external andinternal ecosystems.

Focus of platform initiatives

30.6%

38.9%

27.8%

Integrate internal apps Connect/Enable partnersAPI monetization Faster app development

(How respondents describe the focus of their organization’s platform initiatives)

Organizations selected above are in the Top quartile. Quartiles are based on the the number of applications and API traffic generated on the enterprise business platform. All data from customers on Apigee Cloud.


13

Consider APIs as strategic to your businessAs requirements for digital business constantly evolve, enterprises use APIs and API platforms to quickly deliver new apps while leveraging existing legacy services.

Percentage of companies who say theirorganization considers APIs to be strategic

0%

25%

50%

75%

100%


Strongly Agree Somewhat Agree



14

Lead with businessuse casesAt successful organizations, business stakeholders define APIs to ensure that the right business use cases are addressed.

Bottom quartile companies mostly focus on technical integration with APIs.

Percentage of companies whobelieve their organization defines APIs

by business use cases

0%

25%

50%

75%

100%





15

Obsess about developersSuccessful organizations make it easy for developers to discover, consume and use their APIs.

These organizations run developer outreach programs (hackathons, for example), deploy developer portals for easy API discovery and secure self-service access, and publish interactive documentation.

Top-quartile companiesattract the most developers

96.2%

Top Quartile Second QuartileThird Quartile Bottom Quartile

Developer adoption measured by # of developers registering apps on a given organization’s platform



16

Build strong developer programsSuccessful organizations have open developer programs that provide self-service developer registration, interactive documentation, and developer communities to foster sharing.

Percentage of companies who believe theirorganization invests in developer programs

0%

25%

50%

75%

100%





17

Treat APIs as productsSuccessful organizations have four times more API products than organizations in the next quartile.

Treating APIs as products enables companies to package APIs with quota limits and pricing models. Organizations can iterate on a variety of business models to optimize on the right offerings.

API products distribution

7.0% 17.1%

73.6%

Top Quartile Second QuartileThird Quartile Bottom Quartile



18

Track platform success with business KPIsSuccessful platforms clearly define and measure a combination of business metrics like direct or indirect revenue and API consumption metrics like API traffic, the number of apps, and the number of active developers.

Percentage of companies who believe their organization measures the business success of their APIs

0%

25%

50%

75%

100%





319

Ecosystem stories


20

Walgreens: a thriving partner ecosystem• Created and launched a variety of APIs that

enable developers to integrate Walgreens retail and pharmacy business capabilities into their apps

• 100+ partners build apps

• 40 million consumers access refills via third-party apps


21

Arity: A New Business ModelAllstate spun out Arity, a new API-driven company focused on delivering insights gleaned from millions of drivers and over 10 billion miles driven.

Arity partners with mapping and weather providers to build insights into risky driver profiles and safe routes, and provide these data to other insurance, financial services, and transportation customers.

Mapping Data

Weather Data

1+ million drivers 10+ billion miles

Insurance Customers

TransportationCustomers

1Engage business stakeholders to identify high value digital services

Invest heavily in developer outreach and engagement

Treat APIs as products and build product management capabilities

Measure success with business KPIs and track them diligently

To win, act like ascrappy digital native

22

2 3 4



23

Report methodologyFindings are based upon the hundreds of billions of API calls made through the Apigee cloud from 2014 through 2016 from customers spanning a variety of industry sectors.

In presenting the findings, we organized customers into quartiles based on business platform adoption, which is determined by API traffic and the number of consuming applications for an enterprise using the Apigee platform.

Contact us at [email protected] or tweet @Apigee with questions about this report or its findings.

mailto:[email protected]

http://twitter.com/home?status=@Apigee


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About ApigeeApigee, which is now part of Google, provides a leading API platform for enterprises and developers to design, secure, scale, and analyze APIs and manage the entire API lifecycle. Hundreds of companies, including Walgreens, Burberry, First Data, Swisscom, and Live Nation—as well as tens of thousands of developers—use Apigee.

For more information, visit apigee.com.

http://apigee.com

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