APIs Are Critical to Today's Digital Transformation Efforts
December 09, 2019

Rob Whiteley
NGINX

As we head into 2020, digital transformation is no longer an option — businesses that do not transform will simply not survive. In order for businesses to transform, they need application programming interfaces (APIs). APIs have become the central system behind most digital enterprise transactions today and they play a key role in powering modern, microservices-based application architectures. Playing a defining role in creating new digital services, APIs can connect partner and customer ecosystems and increase the value of underutilized data.

Determining the right app architecture for a particular organization requires a deep understanding of the challenges related to governing, managing and orchestrating foundational API components. APIs can lead to unified, integrated and scalable data flows, and as more companies are keen to utilize this technology, many must tackle a variety of obstacles that are in the way. Some top barriers to API adoption are complexity, security, and life-cycle governance. To overcome these challenges, it's essential for organizations to consider an API management solution that works best for their business goals. 

Recently, NGINX, F5 Networks, and IDC conducted research around API adoption and digital transformation that examined key API lifecycle considerations. The research found that 75 percent of organizations are expected to be completely digitally transformed in the next decade. Moreover, by 2022, its expected that 90 percent of new apps will feature microservices architecture and 35 percent of all production apps will be cloud native. It's predicted that those that do not incorporate APIs into the core of their IT strategy will be left behind. As a result, 71 percent of organizations expect to see the volume of API calls increase in the next two years.

Located at the core of modern enterprises, APIs have the ability to unlock digital business models and increase revenue streams. The survey found there are two clear types of organizations: API-focused (mature API strategies and tactics, resulting in better digital business efforts) and API-laggards (less mature API strategies and lack of tactics, resulting in limited success of digital business efforts). For instance, the survey uncovered that one out of four API-focused organizations generate 15 to 30 percent of their revenues from digital channels, while only one out of ten API-laggard organizations drive comparable portions of business via digital means. As the volume of API adoption accelerates, enterprises will benefit from planning their API infrastructure and lifecycle management accordingly. In the next year, 46 percent of the API-focused organizations will invest in management and monitoring of APIs, while 36 percent will focus on API traffic management.

Given these investments, it's no surprise that the research found that only 60 percent of organizations (almost all are API-focused) are piloting or already using an API management platform in production. On the other hand, 40 percent of organizations (almost all are API-laggards) do not currently have an API management platform in place, while some plan to adopt one in the next year.

This ratio will continue to shift and impact organizations embracing API management. In fact, organizations are preparing for a surge in APIs and the percentage of organizations who will increase their investment in APIs is expected to grow anywhere between 25 to 75 percent in the next two years. Respondents cited the primary reasons for doing is so is to expand customer and market reach, expand their partner ecosystem, improve customer satisfaction and increase the speed of business execution. 

Based on this IDC research, we can predict that organizations that do not incorporate APIs into the core of their IT strategy will face significant challenges in transforming their businesses for the digital era. With this in mind, the recommended IT strategy for organizations in the next 24 months is to focus on API management as part of a modern application architecture.

As digital transformation becomes commonplace, organizations that don't embrace it and implement APIs and the corresponding API management solutions into their IT strategy will be left behind.

Rob Whiteley is VP of Marketing for NGINX
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