The phrase “every company is now a software company” has been a talking point for several years, and now data from a recent industry survey bears this out. The proliferation of APIs — both consumed and published — both software provider to enterprise as well as enterprise to enterprise — means the lines have gotten very blurry indeed.
That’s the word from the latest API integration survey released by Cloud Elements, which finds 83 percent of the 400 integration professionals and IT executives surveyed consider API integration a critical part of their business strategy, driven by digital transformation initiatives and cloud application adoption. While Cloud Elements is an API management provider with a stake in these results, the implications are worth exploring.
The crossover between mainstream enterprises and software vendors is evident in the results: “a surprising number of enterprise respondents spoke of integration priorities like ‘streamlining integration with third parties’ and ‘helping bring new products to market’ and ‘integrating with all the CRMs,'” notes Ross Garrett and his team of co-contributors. “Enterprises are launching digital products and platforms that put them in direct competition with disruptive ISVs. Some of the most iconic enterprises have always been software companies — SAP, Microsoft — but many are now services companies that look like software companies.”
Tellingly, 80 percent of the enterprises in the survey indicated they offer customers software development kits, and 20 percent also offered a platform or iPaaS through which partners and customers can interact with their processes. There is plenty of opportunity in building up these capabilities: “large enterprises usually have large installed bases and longer-tenured bases,’ the report’s authors state. This fact seems to insulate them from competitive concerns related to integrations. It could also mean that that enterprise respondents offer services that are early in the maturity curve for digital products and integrations matter less in customer choice.”
More than two-thirds, 68 percent, look to APIs to enhance their connected experiences which help drive sales and revenue, attract and retain top talent, and unlock new data-driven insights. Respondents have realized improvements across many crucial elements of their businesses by leveraging APIs. At the top of the list are “Increased productivity” (59 percent), “Increased innovation” (51 percent), and “direct increase in revenue” (43 percent). Forty percent also say that digital transformation initiatives are driving these requirements.
There are issues with the ability of mainstream enterprises to push the envelope too far. About 40 percent of enterprise respondents said their integration needs are still primarily (more than 50 percent) on-premises, the survey also shows. With a burden of legacy infrastructure, 24 percent said it takes 90 days or more to release a new API with advanced features — compared to 14 percent of software vendors responding to the survey.
Ultimately, reusable sets of API calls and data abstractions that scale workflow across multiple enterprise applications are required to build an open platform architecture, according to Richard Pulliam, principal at 2Disrupt and a contributor to the Cloud Elements report. “The ERP used to be the mission-critical system taking data from all points of the business to help it run more efficiently. This is why ERPs are inclusive of larger suites of software like CRM, marketing automation, customer support, and more. But as the volume of data grows and customers desire to use best-of-breed cloud applications to solve specific functions, the ERP no longer holds all the mission-critical data.”
On average, both enterprise and software vendor respondents selling digital platforms want to add dozens of new integrations in the year ahead — 34 on average. Most enterprise respondents listed authentication, custom objects, and workflows as the most challenging aspects of API integration.
Priorities for the year ahead in deploying APIs, cited by enterprise CIOs, include “adding RESTful endpoints to core systems of record (CRM, ERP)” and “making enterprise systems easy to connect with one another.”
Integration infrastructures receiving investments include API management platforms (77 percent), iPaaS (42 percent), iSaaS (34 percent), and those reliable standbys, enterprise service buses (32 percent). Message-oriented middleware also remains on some companies’ radar, with 14 percent making investments in these tools.