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Study: 55 Percent Say API Integration Is “Critical” to Business Strategy

Cloud Elements Issues Third Annual “State of API Integration” Report; Highlights Trends, Challenges and Opportunities for the API Economy

API integration is increasingly an important element of digital business strategy, fueling customer loyalty, partner ecosystems and new revenue opportunities, according to a new study issued by Cloud Elements. The third annual “State of API Integration” report contains insights and predictions from API industry experts, as well as more than 350 API enthusiasts from 27 distinct industries. Key findings include:

  • 55% said API integration is “critical” to their business strategy, and an additional 29% said it is “somewhat critical.”
  • 60% said API integration will have significant impact on customer upgrades or renewals.
  • 62% said they are becoming more of a platform provider to integrate with partners, maintain stickiness with customers, and/or find new revenue opportunities.
  • Nearly 55% are using APIs to build B2B products, 36% for mobile products, 29% for B2C/consumer products, 26% for employee productivity, and 22% for IoT applications.
  • CRM is the #1 category of integrations needed (24%), followed by finance (16%), ERP (15%), database (12%), communications (10%) and human capital (6%).
  • Key business process use cases include “lead to customer” (45%), “customer to cash” (23%), “lead to loyalty” (20%), “quote to cash” (8%) and “hire to retire” (4%).
  • 56% charge for API access or integration services, up significantly from 44% in 2018.
  • Development teams take 41 days on average to build a net new API integration with advanced capabilities. Respondents plan to build 18 integrations on average in 2019, up from 11.5 in 2018.

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“The API economy is (finally) ready. We now have the practice, the tools, the business models. We know that it works and will scale. But how far? This is the challenge of API integration,” said Mehdi Medjaoui, founder of APIdays and a contributor to the report. “APIs have the potential to bring the world closer together if we can find the right blend of technical skills, business savvy, and human ethics to build them and integrate them. The real potential of APIs is not to replace a software, but to represent the business of a company.”

“With an ever-increasing number of APIs and applications, developers can’t possibly be expected to keep up with the scale of growth or the pace of change,” said Ross Garrett, vice president of product for Cloud Elements, and editor of the report. “RESTful APIs have created a strong and lasting foundation for innovation, but we need more. More technologies and integration patterns. More security to increase trust. More standards to help interoperability. More analytics to inform decisions. More openness to drive transformation. More tools to ease integration. And more governance to manage complexity.”

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In addition to insights from Garrett and Medjaoui, the 2019 report includes front-line perspective on healthcare interoperability and open standards from API activist and REST Fest co-organizer Shelby Switzer; best practices in API design from API consultant and speaker Mike Amundson; and an overview of API security challenges and opportunities, from Ping Identity’s Field CTO Francois Lascelles.

The report also covers the importance of application ecosystems across key vertical markets, including fintech and open banking, human capital management, and healthcare. Additional topics include business drivers of API integration; the emergence of virtual data hubs; regulatory changes like the Payment Services Directive (PSD2) in banking; and the move to data standards, including the Open Data Initiative founded by SAP, Adobe and Microsoft.

Last but not least, the report captures feedback from API enthusiasts on their most frustrating challenges (39% said event-driven integration); the most time-consuming part of API integration (26% said workflows); their favorite API style (71% said REST without hypermedia); their preferred documentation standard (50% said Swagger); their preferred event-driven integration patterns (33% said WebHooks); and their preferred Auth mechanisms (49% said Oauth 2.0).

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