The Five Axioms of the API Economy Summarized and Series II

The API Economy

This is a joint post by Guest Author Craig Burton who writes at http://www.craigburton.com/ (craigburton) and 3scale’s Steven Willmott (njyx on twitter). The original axiom approach was dreamt up by Craig and we’ve iterated together since.

It’s been a pleasure for us to work together on trying to derive a sound basis for thinking about the API Economy – but that basis isn’t very useful if it isn’t built upon. So today we’re introducing the second part of the API Economy Axioms series – a look into what the consequences of these axioms are.

We’re starting off in this post by summarizing the five axioms and from next week we’ll be covering what happens next:

  • Implications for individual organization

  • Implications for Internet and business ecosystems as a whole

  • The challenges to be faced – both technical and organizational

If you missed any of the Axiom posts, they are linked below in each section.

Summarizing the Five Axioms

In summary, the Axioms are defined as follows:

  • Axiom #1— Everything and everyone will be API-enabled: This Axiom highlights the fact that almost every network connected endpoint is becoming an API that can be invoked and read by other software systems. This transformation, when seen device-by-device or step-by-step, seems logical – perhaps even mundane. However, the point behind this Axiom is that as a macro phenomenon we are quickly accelerating into a world where almost every device and system is addressable via APIs. [Axiom 1]

  • Axiom #2— APIs are core to any cloud, social and mobile computing strategy: More concretely than Axiom 1, this Axiom describes how APIs form part of what are arguably the three most important transformational forces in the online economy today: cloud, social and mobile. It’s very clear that many of today’s innovations in these areas would be impossible without API-like architectural patterns (even if not always named APIs) and that APIs are enabling yet more of this same transformation. [Axiom 2]

  • Axiom #3 – APIs are an economic imperative.: This Axiom shows that APIs are at their core not simply a technical phenomenon, but are intrinsically linked to the creation and access to value – resulting in economic impact. This does not necessarily mean relevant APIs are “paid for services” (although some are), but in fact that almost all APIs enable, improve or scale value in ways which increase economic impact. [Axiom 3]

  • Axiom #4: Organizations must provide core competence through APIs: This Axiom zeros in on the fact that the transformation that matters most is when it’s core competence as an organization is made available as an API. In other words when APIs become drivers for core business, and enable partners and customers to engage, provision and consume that core competence in new ways. [Axiom 4]

  • Axiom #5 – Organizations must consume the core competencies of others through APIs: This Axiom is a counterpart to Axiom #4 and highlights the fact that consumption of the APIs of others is of equal importance to provision. When this consumption is of the core competences of others then this provides the strongest foundation for business partnerships. [Axiom 5]

By themselves, these Axioms can seem rather dry or disembodied – why these Axioms and not five others? While it is hard to know whether we chose the correct five building blocks they were chosen because they illustrate different dimensions of what is happening in the API Economy today:

  • Scale – Axiom #1: reaching almost every software and hardware system being deployed.

  • Momentum – Axiom #2: underpinning huge global transformative trends.

  • Economic impact – Axiom #3: moving from a technical phenomenon to a business essential.

  • Imperative to provide –Axiom #4: demonstrating the impulse to offer APIs.

  • Imperative to consume – Axiom #5: closing the loop on provider – consumer relationships for services.

But, the proof in the pudding is whether or not, these Axioms allow us to say something about how we think the API Economy will evolve, change and impact business.

This is the subject of the next set of posts we have queued up – we’re looking forward to people’s thoughts on both the Axioms and what we can derive from them!