Private API Value Chains

The value proposition of public and private APIs will vary depending on the nature of the business. To understand this point, first let’s see how private APIs are used. Here are the elements of a private API value chain:

  • The business assets
    • In private APIs, a company may have no interest or right in having these business assets used outside of their organization or outside of a tightly controlled domain. The apps created by private use of APIs may or may not be used in public.
  • The API provider
    • The API provider is often the same party as the owner of the business assets. A private API is private because it is available only to an authorized population of developers.
  • Developers
    • Developers using a private API are often employees of the organization that owns the business assets and publishes the API or partners with a close relationship with the business.
  • Applications
    • The apps created by a private API can be used internally, by partners, publicly, or all of the above. Depending on the way that the apps are going to be used, attention to promotion and distribution varies widely.

Private APIs can be used to create apps to release to the public. This model is often used by large brands with the resources to develop apps and who want to control what their public apps do. Private APIs can be used by partners to create apps or to implement integration services.

Many SaaS companies offer this type of API. As an example we can think of software companies that offer integration services with Salesforce. They also can be used as a way to more efficiently build apps for internal use in an organization.

Following are 3 ways Private APIs can be used in an organization:

  • Efficiently Creating Public Apps
    • The biggest and most far-reaching impact of many private APIs is when companies use their API internally to build public apps. Using an API in this way tremendously increases efficiencies in extending products or features for customers.
  • Supporting Partner Relationships
    • Private APIs can be used to create apps that support partner relationships. The owner of the business assets or the provider of the API can arrange for developers to create the app so that the partner can put it to use.
    • Apps created by internal teams to support partners include the use of private APIs to support channel relationships. Large retailers are using APIs to allow thousands of companies participating in cooperative marketing programs to get access to content that can be tailored to their needs.
  • Creating Internal Apps
    • Great value can be realized when companies use APIs to create apps for internal use. Teams create APIs to make content and services available to the rest of the company on a self-service basis. Private use of APIs to create apps for internal consumption can solve a huge number of problems.

There are many benefits of using Private APIs, including

  1. Provide more value than public APIs by an order of magnitude.
  2. Enable rapid and scalable development for mobile strategies.
  3. Help simplify an IT infrastructure to meet that demand.
  4. Improve business development as they make it much easier and faster for partners to integrate.

However these risks also have to be considered while using a Private API Strategy

  1. The power of an API diminishes dramatically if the only people who can use it are the experts who created it.
  2. If people cannot rely on the stability and speed of an API, if they cannot tell when it is working, if they are not informed of changes, developers will not rely on the API and it will fail.

It’s just as important to actively drive adoption


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