What are API products?

The tremendous success of APIs in recent years has opened up completely new perspectives for developers. More and more companies are realizing the immense economic and organizational benefits of an API-based software architecture. The next step was foreseeable: APIs became API products, tailored to the individual needs of customers. For companies, this means concentrating on the essentials. For developers of API products, it means the emergence of a new, lucrative market.

API-Economy, the economic sector that deals with the development and distribution of API products, is based on a simple but captivating insight: Not everyone can know everything. Acquiring the additional skills needed for your own business model takes time, money and resources.

Since the development of new business areas usually requires a number of new competences, the effort multiplies with each additional competence - an effort that in many cases does not pay off. The alternative would be to simply purchase the missing competence. This is the moment when APIs come into the picture.

In simple terms, APIs are interfaces that enable software to access specific functionalities of other applications. In other words, the software uses the expertise it has been given through the API without having its own program code describing that expertise.

The problem with this is that the API usually provides only one special competence. In order to cope with complex tasks in companies, however, combinations of different competencies are usually required, which must be precisely coordinated with each other.

This task is fulfilled by API products, i.e. the combination of different APIs for different parts of the task. The individual APIs must not only fulfil their special tasks, but must also communicate optimally with the other APIs in order to interact smoothly in the interest of the target.

Developers of API products have two options to create a custom API product: Either all APIs contained in the product originate from own development or the API product consists of specially coordinated, already existing APIs. In many cases, combinations are also possible: Competences for which third-party APIs already exist are served by these. All others require the development of new APIs. The product then consists of existing and new APIs, which are optimally adapted to each other.

In particular, the combination of third-party APIs and self-programmed APIs opens up undreamt-of possibilities for developers to design individual applications for the respective customer. Solutions are conceivable that target API products for internal use within the company or those that are designed as part of the business model for use by corporate customers.

In this way, differentiated soft limits can be implemented, such as throttling, in order to limit the number of accesses within a certain period of time. These and other functionalities can be integrated into the API product exactly according to the customer’s individual requirements.

When it comes to pricing, the developer has every option open to him - from price per query to graduated prices for different expansion stages and flat solutions. In addition, price models based on special application scenarios are conceivable.

API products are the answer to the problem of companies generating additional competencies with justifiable effort. For developers, API products represent a virtually inexhaustible new market in which they provide companies with the skills they need through tailored solutions.