API Trends 2024
How the world keeps
running on APIs
The API Economy in an AI-Driven World
Today, the world runs
on APIs.
All the technologies we come in contact with every day are API-based. The spiraling degree of change today’s businesses face of today’s business demands applications that can assist us to do more, or more easily, the things we need to do: those applications run on APIs.
This paper contains compelling evidence that in 2024, the world will run on APIs more and more, because the applications are changing, and the number of consumers of APIs is multiplying.
applications, for good
becomes more systematic
become the norm
of APIs spikes
Today's world runs on APIs
All the technologies we encounter daily are built on APIs. As businesses face rapid change, they increasingly rely on applications that help us accomplish more, and do it more easily — and these applications run on APIs. This report presents compelling evidence that in 2024, the world will rely even more on APIs as applications evolve and the number of API consumers continues to grow.
Welcome to a world of API growth!
AI starts changing existing applications, for good
Programmatic access to ChatGPT's large language model via APIs has just started, and the creativity of developers still has a long way to go. Naturally, companies want to leverage AI technologies to make their applications more innovative, user-friendly, and simpler to use, banking on the competitive advantage that these AI-enhanced applications promise to deliver.
Most providers of AI technologies are well aware that offering APIs is a fundamental channel to distribute their product, allowing clients to deliver powerful extensions to applications, ranging from everyday AI to game-changing AI.
Platform engineering becomes more systematic
According to an old saying, a platform is a product you build products on.So, is a bunch of APIs a platform? Well, at a minimum, it’s the start of one. In the heyday of the API economy (2017, according to Forbes, it certainly was. Back then, companies used to publish APIs and hope somebody out there who needed them would discover and start using them.
For most APIs, that assumption didn’t work, for several reasons, including poor marketing, complicated/proprietary data models, or unsuitable monetization policies. However, the main reason it didn’t work is exactly why platform engineering is different: the focus of the API providers is not to sell what they have; it is to provide API consumers with what they need, in a ‘user-friendly, self-service’ way.
Open finance matures, worldwide
Banking clients (both end consumers and corporate clients) need open banking regulations because they use different financial institutions to do different things.
Open Banking is finally ramping up the slope of enlightenment in Gartner Hype Cycles and is becoming a reality in more and more geographies, including the huge US financial market. 2024 is going to be a year in which financial institutions in advanced Open Banking countries (like Brazil or Scandinavia) will demonstrate more and more that opening up is not only a thing they have to do for their users or to check a box of compliance: opening up is a good business decision for their financial institutions too, it brings in fresh revenue and new opportunities.
Multi/federated API gateways become more common
API gateways are everywhere. An average company, even if small, is likely to have more than one, from more than one technology provider, especially in API-friendly geographies.
Some visionary API management providers, including Sensedia, have started a multigateway / multi-API management administration journey. They offer an initial set of features to monitor API traffic on several gateways and to see which APIs sit in several developers portals. These features are a good starting point. However, in 2024, the need to push/monitor/manage the exceptions of central policies to multiple gateways from a single point will become a major point of differentiation, far more than it is today.
Non-techie consumption of APIs spikes
From the beginning of the API Economy, the focus was on software developers. Lately, trends like platform engineering, which explicitly addresses ‘user-friendly, self-service capabilities,’ shifted the focus decisively towards the consumer developer.
Gartner has been saying for years that consuming APIs is becoming more frequent than designing APIs and backs that up with surveys to prove it. But there’s more. Generative AI is already helping developers design, document, and test the APIs they produce: some visionary application infrastructure players, including Sensedia, are piloting additional functionalities to this effect.
Adaptive end-to-end governance emerges from API governance
So, was 2023 a year in which we governed API programs decisively better? It’s hard to answer with a resounding yes. Did we try to govern our API programs more effectively? Yes, we certainly tried. Did API management platforms offer more features to govern API programs better? Yes, that improved too. Did adaptive governance really take off in 2023? Not that clearly.
The most difficult decision in governance is where to stop. A specific project can be killed by a lack of governance or even too much governance. So, how do we reach just enough governance? Apart from an empirical rule of governing more and more, until you start getting unwanted constraints, the answer to this question is largely unknown.
What you need
to know
• If you don’t already believe the world runs on APIs, 2024 will certainly convince you. The explosion in consumption of Generative AI services is going to convince a lot of people of this fact.
• Companies are realizing the true value of platforms for internal and external interactions.
No matter where you live, banks eventually will have to give secure, governed, private, safe access to banking data and operations to third parties.
• API Management Platforms are everywhere. Medium to large companies running multiple gateways from multiple providers are going to be increasingly common.
• APIs, especially high-level experience APIs, are ideal building blocks, not just for programmers but also for business technologists building innovative interactions.
• Governing API programs will remain a huge challenge for any API provider. In 2024, most companies will become API providers, when considering APIs developed within the organization for private internal consumption.
Paolo Malinverno, Head of Strategy and Innovation at Sensedia, has spent a lifetime advising companies on maximizing the value of technology for their business. For 23 years, he was an Industry Analyst with Gartner, writing Magic Quadrants, Hype Cycles, and more, advising thousands of clients worldwide (especially CIOs and IT Executives), and presenting or chairing Gartner Conferences. He has deep experience in application infrastructure, especially API management, integration, and various flavors of automation. In his role as a leading industry analyst, he predicted major industry trends, such as the API Economy, and its business consequences, like the relationship between platforms and ecosystems. As a technologist and businessman, he specializes in helping technology companies achieve business growth, focusing on how they go to market, position and present their technology to solve clients' problems, and leverage industry analysts.