Facebook And The Sudden Wake Up About The API Economy

What a two weeks it’s been. Something happened that has been simmering for a while. The API market exploded. Intel bought Mashery for more than $180 million and CA acquired Layer 7. 3Scale received a new $4.2 million round of funding from Javelin Ventures. Mulesoft acquired Programmable Web. And then Facebook jumped in and bought Parse.

The acquisitions and funding point to a maturing market that is reflected in the ubiquity of APIs across the application landscape. It’s not a new market by any means. The space is filled with companies that have leveraged the API build out that has happened over the past several years. Instead this is an inflection point. There are more than 30,000 APIs, according to Programmable Web, the leading API directory and blog. Javelin Ventures Managing Director Noah Doyle said to me in an interview that analysts see the API market growing five to ten times over the next five years.

With that scaling in number of APIs comes a virtuous circle for the developers that build compelling apps and APIs. The APIs extend the apps reach as they become part of distributed data network. As more people use the APIs so the app developer generates more data. As the data increases in scope, often the service will become an API.

Facebook needs new streams of data to keep rolling out new digital products. Back end as a service providers like Parse provide SDKs and APIs that give developers access to infrastructure for storing basic data types, locations and photos. How Facebook uses this data is a question mark. But regardless, Pare serves as a constant replenishing source, nourished by the apps on the Parse platform that use APIs. Facebook now will decide how to package and segment that data to push more relevant advertising to its 1 billion users.

APIs Are Like Glue

APIs will be the glue to the Internet, said Programmable Web Founder John Musser. Musser, like Doyle, sees a new generation of APIs emerging that are fueled by demand, triggered by mobile devices, which serve in many respects as the new client/servers. Apps are hosted on cloud services and distributed across mobile devices that read and write data, sending and receiving information, connecting via APIs.

In the first generation, Mashery and companies like Apigee pioneered the API management space. Twitter and other web companies emerged in the second generation. In the third wave, enterprise vendors, like Intel and CA, are recognizing this big movement and entering the market to connect hardware and software systems.

Now the API movement is headed below the application to the machine level, Doyle said. It’s at this level that we see the emergence of the Internet of Things. Here, everything become programmable, able to send and receive data, integrate it and trigger actions.

3Scale provides the management of the API so developers can build logic on top, Doyle said. The company helps developers manage APIs out of the box so they can simply add data sets or services without needing to hand stitch things together.

The API Economy

The surge of activity marks a symbolic point for the API Economy, a term ApigeeVice President of Strategy Sam Ramji helped coin. He said in an email that this past week may have doubled the size of the audience paying attention to APIs and API infrastructure. “If a company doesn’t have an API, and their CIO or CTO reads about the news, they will be asking themselves ‘why don’t we?'” 

And it will be easier for them to build APIs with services popping up like Mashape and Webshell. Doyle spent three years at Google after the company acquired Keyhole, the startup he founded. At Google, Doyle helped develop Google Earth and worked on Google Maps.

“We exposed maps as a lightweight JavaScript,” Doyle said. “We thought of it as an embed code in a way. We thought it would be cool and great but were  shocked how quick it took off.”

It was the ease of use that made Google Maps accessible, Doyle said. Today, best practices are getting built-in so it is easy for the developer to build out sophisticated apps.

Complexity Is Inevitable

But it’s not all so simple. Complications await as development becomes ever more distributed across multiple APIs. It’s a hole MuleSoft sees it can help fill with its APIhub.

As I wrote last week, for MuleSoft, the Programmable Web deal provides a vehicle for it to offer what it calls a GitHub for APIs that will integrate its APIhub with Programmable Web’s API database and rich editorial focus on the correlating market space. For Programmable Web, it provides a stable home, a place where it can extend its API database to a community that can build out apps using the MuleSoft APIhub platform. It’s this integrated platform that the company expects to provide the guide and the community collaboration to make APIs easier to fit together.

Tasktop Technologies, an application lifecycle management (ALM) integrator, has launched an open-source effort called Software Lifecycle Integration (SLI) that would link the disparate tools in the software lifecycle management process. The new initiative is called M4 and is part of an open-source project under Eclipse-Mylyn

SLI is what Tasktop CEO and co-founder Mik Kersten calls an underlying service that acts as a universal linked data message bus that allows for real-time synchronization between different tools so people can immediately discuss problems with the code as they surface.  It’s these underlying integration platforms that will emerge as the API economy develops. Acquisitions and funding over these past two weeks signal the need to manage this complexity so it really is easier to build out apps that are as connected to our mobile devices as to the rest of the things in our lives.