Key Takeaways from Cloud Elements' 2020 State of API Integration Report
/For players in the software space, staying relevant in the marketplace has always been a challenging ask. Each passing year brings the emergence of numerous new APIs, and standing out is becoming tougher than ever. Success in today’s API climate—paradoxically— means building functional products while “playing nicely” with others.
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Cloud Elements surveyed over 380 experts from 44 countries to gather feedback on today’s state of integrations. Eighty-three percent of respondents believe that API integration unlocks transformative experiences for customers, partners, and employees. We can do even better yet with integration across the API landscape. The Cloud Elements study highlights the importance of creating solid software platforms—and how these APIs can generate value for your organization.
We’ll jump into some of the report’s key findings. Cloud Elements has weighed in on one key question: why should we view API integrations as a competitive advantage, especially as our services grow more diverse?
Breaking Down the Survey Process
When designing the study, Cloud Elements and fellow contributors were interested in the following:
If and how API integration strategies are evolving
Which emerging technologies have the most influence on integration standards
How APIs influence product strategies and development
How key decisions drive the development process
How to support the process of implementing API integrations
Independent software vendors made up the majority of respondents (33%), with enterprise participants close behind (30%). Integrators and others rounded out the remainder of the group. Survey takers answered a number of questions related to API integration trends and overall sentiment.
Revealing the Trends
API providers overwhelmingly offer integration platforms as part of their products. SDKs and workflows are much less prominent parts of the development pipeline. Seventy-seven percent of respondents offer API management platforms to support integration—while alternatives like iPaaS, iSaaS, and Enterprise Service Buses are prevalent yet less popular. Overall infrastructure seems to be pretty diversified, though investment is management-heavy.
Why are companies favoring integration? The rise of API platforms has ushered in rapid modernization. Organizations are scrambling to transition into the digital realm—this digital transformation was cited as the chief reason behind app integration for over 40% of survey takers. Business needs are primarily driving the creation of customized API integrations—for both API providers and their partners. Lastly, 60.6% of respondents say their integration requirements are mostly cloud based. This tells us that on-premises popularity is dwindling in response to industry shifts.
What’s the business case?
While technology rules the landscape, we can’t deny that money still rules the day. Companies are being told increasingly fervently that APIs are crucial—though many companies must still discover how these solutions can add value. Accordingly, 83% of participants say that API integration is either critical or very important to their greater business strategy. It definitely appears that companies have embraced the platform-first mindset, and will continue warming up to the concept.
Companies need to ensure their solutions are interconnected. Customers have become accustomed to integrated software solutions. Cloud Elements assets that these expectations are justified. Why bother using an application that’s completely walled off? Fragmentation breeds frustration and kills productivity—customers demand and deserve modern products that do it all, and do it cohesively. Expectations are magnified when customers pay for products.
Image courtesy of TIBCO Software.
API integrations ultimately lead to happier users. The idea is that integrated functionality will inspire users to renew their subscriptions, make more purchases, and engage more frequently with API platforms. Nearly 50% of respondents agree that most customers will renew or upgrade once rich integrations roll out. Companies that don’t adapt risk user flight.
This integration takes a few forms. It supports functionality across different platforms. It unifies data sharing and access between applications. Customers will also be better informed by viewing these collective metrics. That data, when managed safely, is another potential revenue stream for the companies that oversee it. API integrations generate profits, pay for their costs, and bring indirect cash flow.
Enterprise vs. Independent Software Vendors (ISVs)
The report highlights two main developments in the integrations space, as they relate to vendors and enterprise entities. Solutions are expanding to include higher levels of functionality for customers. Furthermore, the enterprise players are becoming data collectors—managing user information while boosting its fluidity across the ecosystem.
This “data governance” is a hot-button topic today, as companies like Google, Microsoft, Adobe, and SAP seek to protect sensitive data. A push for improved, unified standards surrounding unification and enhancement of applications is brewing. A new Open Data initiative aims to employ AI and common data models to unearth insights.
Additionally, who owns this data and its visibility are key topics in the GDPR and CCPA era. Trust and accuracy aren’t just aspirational—they’re required. Businesses must ensure their API platforms meet their data-lifecycle demands at scale.
Democratizing Information and Access
API providers are trying to simplify customer workflows while personalizing user experiences. We’re seeing many new entrants in the API space offer useful services to customers in banking, healthcare, pharmaceuticals, and more.
Surprisingly, enterprise respondents were much more forthcoming about their top integration priorities. These mainly include:
Digital transformation to drive innovation
Cost reduction and productivity increases
External benefits like partner integrations, “platformification,” increased API adoption, and investment justification
By comparison, none of the 121 ISVs shared their biggest focus areas. The report speculates that these priorities are outwardly obvious, or ISVs “couldn’t be bothered.” Furthermore, these integrations have become core, implied additions to each product pipeline. Here are some quick facts:
The vast majority of enterprise providers offer SDKs, while 20% offer full-fledged platforms. A small minority actually expanded on the specifics of their offerings
Opinions are split on whether more integrations will lead to customer renewals or upgrades, as these enterprise users are entrenched and accustomed to specific solutions (comfort factor)
Many enterprise customers favor integrations in the form of RESTful endpoints to core systems, and exploring better linkages between these systems
Respondents believe APIs need to flexible and agile—ready to evolve with customer needs
Since on-premises practices aren’t waning completely, numerous companies are adopting a hybridized API integration strategy to bridge the gap
It’s also unsurprising that the enterprise is still much slower to act than individual vendors are. There’s more bureaucracy, added business concerns, and more vetting that goes into every development decision across the product lineup. This has massive implications. Both ISVs and enterprise players hope to add over 34 integrations on average this year. How companies perceive the development challenges behind them will impact future successes.
Developer Trends and API Design
We know our API integrations are data-centric. Accessing and safeguarding databases are essential tenets. While technologies like GraphQL have gained momentum since their inception, the query language has curried favor across multiple industries. Because GraphQL can abstract and pull from numerous sources in one request, it carries immense promise for complex data chains.
For example, Cloud Elements’ Luke Vance believes the language has the power to supplant major players like Hypermedia amongst video services. Designing API integrations using GraphQL can simplify many processes. It also boosts performance and avoids bloat. Deficiencies in these areas can otherwise harm the user experience. GraphQL is still evolving, though developers are hopeful that it’ll soon grow into a complete API-creation mainstay.
Making Decisions in Real Time
It’s speculated that roughly 33% of all data will be produced in real-time by 2025. Our API integrations must shoulder this heavy demand. A major barrier to these event-driven integrations is fragmentation—namely protocol and engineering fragmentation. How we call data will become crucial to API success moving forward. REST and other command-query designs have been successful to date. However, the adoption of over 10 prominent web request protocols has created a fragmented landscape. Ideally, a unified set of standards will help mitigate developmental challenges.
Engineering teams are also muddying the waters. Some teams are using popular integration standards, while others are using proprietary approaches. This hampers cohesiveness, especially when crafting event-driven solutions. These fragmented processes are slower, costlier, and ill-suited to tackle complexities. Even if API integration methods are sound, each provider has to tackle common concerns involving latency, throughput, and others.
Lastly, our designs should be consumer-centric. They should evolve based on demand—not remain rigid and resistant to change. Users should have integration options to choose from instead of being pigeon-holed.
The Future is Bright for API Integrations
Cloud Elements’ report shows us that the API landscape is evolving rapidly. Decision makers are privy to the benefits of robust integrations, and the correlations they have with customer satisfaction. We expect a new class of capable services to emerge from this platform-based approach. Older services have been siloed for far too long, and API providers are catching on.
Keep in mind that professionals and developers still face a learning curve. Adaptation takes time. Balancing innovation and harmony with outside ecosystems is an ongoing challenge. API integration will depend on how we handle engineering, customer needs, and mountains of complex data.