The slides provide a quick overview of the API Economy trend. The slides provide summary information, a list of trends to watch and links to additional resources

1. © 2016 IBM Corporation
IBM Market Development & Insights
Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution.
The API Economy
IBM HorizonWatch 2016 Trend Brief – External Version
Bill Chamberlin, Principal Client Research Analyst / IBM HorizonWatch Community Leader
May 9, 2016

2. © 2016 IBM Corporation
IBM Market Development & Insights
Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution.
About This HorizonWatch Emerging Trend Brief
2 The API Economy: HorizonWatch 2016 Emerging Trends Brief (External version)09May2016
 Purpose: The slides provide a quick overview of the API Economy trend. The slides
provide summary information, a list of trends to watch and links to additional resources
 How To Use This Report: Use these slides as a learning document and a springboard to
further research and reading on this trend. You may want to view the slides in slideshow
mode so you can easily follow the links
 Available on Slideshare: The latest version of this file (and other HorizonWatch Trend
Reports for 2016) will be available publically on Slideshare at
http://www.slideshare.net/horizonwatching
 Please Note: This report is based on internal IBM analysis and is not meant to be a
statement of direction by IBM nor is IBM committing to any particular technology or
solution.

3. © 2016 IBM Corporation
IBM Market Development & Insights
Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution.
Defining the API Economy market
Definition:
An Application Programming Interface (API) is
an intermediary that allows application
programs to communicate, interact, and share
data with various operating systems or other
control programs. The API Economy describes
how development and use of API’s can
transform business models and transform
industries.
3
Enabling Technologies:
• Integration as a Service (IaaS)
• Representational State Transfer (RESTful)
services
• API management
• Cloud Orchestration
• API Software Products
“Application programming interfaces (APIs)
are bits of code that can integrate clouds and
mobile devices; extract knowledge from social
networking; and make productive and
profitable use of the Internet of Things. .” IDC:
The API Economy: How Bits of Code Empower Business
Relationships
Source: MD&I, Technology Business Research
“APIs are one of the fundamental building
blocks on which the Internet of Things will
succeed. We see our customers gaining
efficiencies and cost savings with the
Internet of Things by applying APIs.” - Raine
Bergstrom, General Manager, Intel Services
“Whether the need is process optimization,
new revenue streams, Internet of Things (IoT),
predictive analytics, or something else, APIs
facilitate exchange of diverse information and
business process flows within and between
organizations.” Forrester: Sizing The Market For API
Management Solutions
09May2016 The API Economy: HorizonWatch 2016 Emerging Trends Brief (External version)

4. © 2016 IBM Corporation
IBM Market Development & Insights
Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution.
The API-economy: 4 trends to watch in 2016
1. APIs drive digital transformation. Enterprises
use API’s to interface with service providers,
partners, and customers to deliver (and
receive) innovative new digital services and
data
2. APIs treated as strategic assets. Since APIs
expose data, services, and transactions, they
are beginning to be looked at by enterprises as
assets which can be reused and help drive
innovative new processes, products and
services.
3. APIs are becoming software products.
Enterprises look to productize their APIs, rather
than developing single-use APIs that solve only
immediate problems. Enterprises use APIs to
solve a variety of problems and generate new
digitally-driven revenue streams
4. IoT exposes need for focus on security.
APIs will be a critical component for addressing
new challenges around efficiently and securely
attaching IoT devices to connected
environments.
4 09May2016
SmartBear: The State of API Survey Report 2016
“By 2018, at least half of IT spending will be
cloud based, reaching 60% of all IT
infrastructure and 60-70% of all software,
services, and technology spending by
2020.” IDC: IDC FutureScape: Worldwide Big Data
and Analytics 2016 Predictions
Forbes: Don't Get Ubered: APIs Hold Key To
Digital Transformation
The API Economy: HorizonWatch 2016 Emerging Trends Brief (External version)
Source: IBM MD&I, TBR, Inc.

5. © 2016 IBM Corporation
IBM Market Development & Insights
Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution.
The API-economy: Adoption Challenges
 API authentication. API standards exist to some extent, but
many APIs were built prior to the existence of said standards.
As such, these older APIs may have their own form of
authentication, meaning that they require more effort around
integration and require high levels of ongoing maintenance.
 Lack of data interoperability across systems. The inability
to synchronize data between different systems presents
challenges due to the various standards around the types of
data allowed. These challenges can exist around date and
time stamps, allowed number or characters, requiring data to
be normalized for multiple interfaces.
 Cultural and institutional resistance to APIs due as a
result of poorly defined business cases. Leveraging APIs
often requires the sharing of IP and related assets between
organizations. This push to share IP or assets is often met
with resistance, especially if the business value of the APIs
are not clearly defined to all parties.
 Poor customer awareness. API developers that are
launching externally-focused APIs often times have problems
with branding, because APIs are treated as an IT backbone
and not a marketable offering. As a result, these organizations
face challenges stemming from limited awareness around the
economic merits of APIs.
5
“The biggest mistake we see AD&D pros
make is to think of APIs only as a technical
strategy for application integration and
mobile apps.” Forrester A Developer's Guide To
Forrester's Strategies For API Success
Layer7: API Security and Management
Today (Infographic)
09May2016
ProgrammableWeb: 8 Real World API
Strategies and The Keys To Their Success
The API Economy: HorizonWatch 2016 Emerging Trends Brief (External version)
Source: IBM MD&I, TBR, Inc.

6. © 2016 IBM Corporation
IBM Market Development & Insights
Note: This report is based on internal IBM analysis and is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution.
Selected links to additional resources
• Forrester: The API Management Solutions Market Will
Quadruple By 2020 As Business Goes Digital
• PCmag.com: Definition of: API
• Techtarget.com: API economy (application programming
interface economy) definition
• Deloitte: API Economy: From systems to business
services
• ComputerWorld: Enterprises and the API economy: How
to create an API program
• Mashery.com: Four Key API Trends For The Connected
Decade
• Builtinaustin.com: 3 API trends shaping the future of
apps
• David Cummings: 5 Challenges for Automation in the
API Economy
• IT Business Edge: IBM Looks to Accelerate Growth of
API Economy
• Accenture: API Maturity Model
6
“APIs started as enablers for things
companies wanted to do, but their
thinking is now evolving to the next
level. APIs themselves are becoming
the product or the service companies
deliver.” - Jyoti Bansal, Founder and CEO,
AppDynamics
“The more I talk to people about APIs, the
clearer it is that public APIs are waning in
popularity and business opportunity and
that the internal use case is the wave of
the future.” - Daniel Jacobson, VP Edge
Engineering, Netflix
Michael Yamnitsky (Forrester): The API
Management Solutions Market Will Quadruple
By 2020 As Business Goes Digital
09May2016 The API Economy: HorizonWatch 2016 Emerging Trends Brief (External version)