Application program interfaces (APIs) have grown significantly in recent years. These clever plug-and-play automated interfaces, allow firms to interact and share digital informational assets with other firms and individuals. Not only are there more APIs available today, but their functional capabilities are also expanding, and companies are finding that they can combine APIs in “mashups” to offer new ways to create and capture value.
The growth of APIs is prompting some management scholars to make bold claims about the future of inter-firm relationships. For example, Bala Iyer and Mohan Subramaniam argue in a recent article in the Harvard Business Review that APIs are beginning to replace alliances as the most common means for partnerships. As they see it, digitization is creating new opportunities for firms to harness data, rather than physical, assets to create and capture value: “APIs are revolutionizing traditional business alliances and partnerships through scalability, flexibility, and fluidity.”
APIs can be restricted to a specific group of users (closed APIs) or can be made available for broad public use (open APIs). They can also generate either direct or indirect revenue for those that create them. The result is that many experts see APIs—both closed and open—playing a key role in facilitating and monetizing a wide range of future business activity including the emerging Internet of Things.
But exactly how are APIs evolving? Are all enterprises creating open APIs? Are all sectors equally engaged? If not, what types of information are most actively exchanged? Is there potential for disruption among companies or industries slow to use APIs?
A productive way to explore these questions is through visual analytics. To construct an interactive visual map of the API economy, we are privileged to work with Rahul Basole, a rising star in the application of visual analytics to understanding business ecosystems and enterprise transformation. Rahul is an Associate Professor in the School of Interactive Computing, the Associate Director of the Tennenbaum Institute/IPaT, and a faculty member in the GVU Center at Georgia Tech. He is also a Visiting Scholar in the mediaX/H*STAR Institute at Stanford University.
To begin, we gathered data on nearly 11,000+ APIs, 6,000+ mashups. This data included information on categories ranging from search and eCommerce to transportation, health, and enterprise.[2]
We converted the API data into a network representation, where nodes represent APIs and links (edges) between the nodes represent if two APIs have been used jointly in a mashup. Links are scaled according to the total number of mashups: the thicker the line the more mashups were created using the two APIs.
There are many different network visualization algorithms available to render the data. The choice is often dependent on the question(s) being asked. As we are interested in the structure of the emerging API ecosystem, we chose first to filter the network and exclude the less integrated APIs. This results in a core group of roughly 4,000 APIs. We then applied a force-directed algorithm that emphasizes seven major clusters within the data and provides an aesthetically attractive and intuitive aggregate layout. For each API in this network, we computed a betweenness centrality score, which indicates its prominence in the network and scaled the size of each node accordingly. Lastly, we colored the network based on the clusters.
The result is a visualization of the current API economy presented here. While this rendering is static, the computer display of the visualization can be dynamic and interactive, allowing exploration of individual nodes and relationships between firms.
A quick review of the API mashup network reveals that few traditional firms are active in the open API economy. Few if any major companies appear in the core component, be they from banking, insurance, pharmaceuticals, food, transportation, or energy. Instead, we see that the API economy is dominated by relatively young digital platform companies.
Most central to this emerging ecosystem are companies that have built businesses around areas such as social, mapping, search, on-line payment, image sharing, video, and messaging. They include well-known companies like Google, Microsoft, Facebook, Amazon, eBay, Yahoo, Salesforce, and Twilio, as well as lesser-known companies like Quova, Anedot, and Zapier.
As information and data make up the core of IoT, APIs are likely to become an important IoT enabler. For example, API mashups now help electric vehicle owners find charging stations. An application like PlugShare, which is built on top of Google mapping API, connects electric vehicle drivers to charging stations and to a community of other electric vehicle users. The application services over a million query a month using the map function to locate and input re-charging facilities.
Another example is a mashup between DocuSign’s electronic signature technology and PayPal’s electronic payment platform. This alliance at the API level makes it easier for other businesses to collect payments from customers, partners, suppliers, and others without the cost and hassle of programming, coding, or other IT involvement.
Visual analytics can reveal the structure and dynamics of this rapidly changing landscape as well as identify first movers. In 2006 there were roughly 350 public APIs. Today there are nearly 11,000 representing a thirtyfold increase over a decade. The pace of API development and the creation of innovative mashups show no signs of slowing. While the exact numbers are not known, some industry analysts estimate that there are three times as many private APIs as the number that are made public.
With this rate of change and new patterns of interaction that is being created, it is important to have tools that enable understanding and sense-making of this complex ecosystem. Visual analytics provides a powerful way to keep pace with these developments and trends. These techniques can also reveal the specific network patterns that are at work in shaping the 21st Century enterprise.
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