APIs – Application Programming Interfaces have enabled businesses, such as Expedia to generate more than 90% of their revenues through exposure of their internal functionality. As with this example, APIs have transformed from being a mere technical component to becoming a revenue-generating business offering. APIs are the foundation blocks to what the industry calls “Digital Transformation” and API Strategy is the holistic approach your enterprise takes to plan, execute and realize business outcomes through APIs. Public data based on the revenue estimates from market research firms are shown in the diagram below to highlight the massive opportunity in the top five industry verticals.


Sources: Telco, Travel & Healthcare: marketwatch.com, Smartcities: Markets and markets; OpenBanking: IDC Research


An API business strategy is arrived at based on certain key drivers and priorities for your business. Below are 5 such key drivers we have come across from our experience in executing digital transformation programs for our customers:

API-driven Digital Transformation to:

  • Improve your Customer Experience
  • Increase your Operational Efficiency
  • Generate revenue through new Business Models within your industry vertical
  • Create new Business Models in adjacent industry verticals through Ecosystems
  • Enable your partners digitally to increase the value of transactions on your platform.

These drivers are neither exclusive nor do they have to be realized in sequence. Given the huge risk of disruption from innovative startups and platform businesses, there is an urgency to leverage APIs as revenue-generating business models.

Let us look at each of these drivers to see how they influence API strategy:

1. Improving Customer Experience through API-driven Digital Transformation

A customer today is empowered through internet-enabled devices and the multiple channels available to conduct commerce. Providing a multi-channel and omni-channel experience through online and Smart Phone or Tablet Apps is a baseline expectation of most customers.


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