API analytics: How the IoT and big data are driving new approaches to business
Though just a few years ago the IoT was more of a concept that industry analysts liked to opine upon, it’s now becoming a reality. Whether it’s wearable consumer devices, smart cars or connected power grids, the IoT is here to stay — and is generating a massive amount of data. The “glue” that connects devices, services, businesses and people together in the digital age is application programming interfaces (APIs), and businesses are investing in API analytics to gain better insights into how that data can be put to use in the most advantageous ways.
Enter the age of the API economy
In short, the API economy is giving rise to new business models and channels through the open exchange of data between people, businesses, devices, places and systems. Though APIs were originally adopted by developers to build third-party or internal applications, they are now becoming the foundation of how businesses actually operate through web and mobile applications, devices of all kinds, back-end systems, partner programs and more.
Many companies have already built new and lucrative digital services in the API economy, including the following:
- Starbucks, with a $1.6 billion mobile payment service that now drives 21 percent of transactions
- Peugeot, with connected cars to improve the driving experience and share vehicle data with its partner network
- Citi, which enables retail partners to more easily integrate with the company’s rewards programs
Getting it right with API analytics
In the age of big data, particularly with the rise of the IoT, it can be a real challenge for businesses of all sizes to implement a strategy to get the most out of the massive amounts of data they are being flooded with every second. By harnessing an API analytics platform, however, businesses can gain better insight into how APIs are actually working and make improvements in near-real time to better align with organization’s digital strategy with overall business objectives. On a more granular level, companies can use an analytics platform to view API usage, statistics and details about the data to better manage service levels, establish quotas and controls, create and manage security policies and, most importantly, analyze trends based on the metrics provided.
The value of business APIs
The overall goal of implementing APIs is to generate new revenue streams for the business and reach a wider audience through more open communication. With that said, in the API economy — which is about sharing information, goods and services in new and more consumable ways — it’s essential that all parties involved get some added benefit through the interaction. After all, today’s consumers demand a more personalized and instant experience from whatever device they choose or wherever they are on the network. Likewise, business partners expect to receive more value from their respective relationships.
For large organizations with old legacy infrastructure and systems, APIs provide a simpler way to integrate with more modern digital initiatives such as the IoT and the rise of big data. For digital-only startups, APIs provide a quick and seamless way to engage with potential partners and customers, but also gain insight into what the demand is for their respective products and services through data analytics platforms.
There’s no question that the rise of the IoT and the explosion of data that comes with it is disrupting the traditional way businesses have operated in the past. Businesses are responding, too. According to a survey by Business Insider, companies plan to spend nearly $5 trillion on the IoT in the next five years. Expect a large portion of that to be on API analytics.