Oct 042012

I’ve recently joined the Cutter Consortium as a Senior Consultant, focusing on the API Economy.

This begs three questions:

  1. Why the API Economy?
  2. Why me?
  3. Why Cutter?

Why the API Economy?

The API Economy is, in brief, the exchange of information resources facilitated by:

  1. Exposing your entity’s core information resources to an ecosystem of developers through an Internet-based Application Programming Interface (API), and
  2. Combining other entities’ APIs to build new information resources.

You may never have heard of the API Economy, but you will. It is the economic force that is driving cloud computing and mobile apps. The success of cloud and mobile computing is accelerating the API Economy towards a tipping point, in a doubly-exponential positive feedback loop.

As a rough metric, it took eight years (2000-2008) for the number of public APIs tracked by ProgrammableWeb.com to reach 1000, but the rate accelerated rapidly from there, as shown in Figure 1 below.

Figure 1: Growth of the number of public Internet APIs tracked by ProgrammableWeb.com, from 2000 to October 2011: from zero to 4000 APIs. Source: ProgrammableWeb

Let’s look at the number of months that it takes to double the number of APIs in ProgrammableWeb.

APIs Date Months-to-double
250 Jan-06  N/A
500 Aug-07 19
1000 Oct-08 14
2000 May-10 19
4000 Oct-11 17
   Average: 17.25

ProgrammableWeb’s most recent milestone is 7000 APIs, reached on August 23rd, 2012. Adding the last thousand APIs (from 6000 to 7000) took only three months. At that rate, ProgrammableWeb should add its 8000th API around Thanksgiving (November 22nd) of this year, give or take a couple of weeks.

If the period between doublings continues to be about 17 months, then we ought to see

  • 8,000 APIs:      Nov 2012
  • 16,000 APIs:   Early 2014
  • 32,000 APIs:   Late 2015

This kind of exponential growth, sustained over a period of years, is common in the computing industry, and is the hallmark of an emerging market opportunity. The last time I considered starting a consulting practice in this field, in 2008, the market was not yet ripe (only 1000 APIs). Now, however, it is ripe to the point of bursting – rather like cloud computing was a year or two ago.

Furthermore, the data from ProgrammableWeb.com includes only public APIs, which are just the tip of the iceberg, with private APIs being perhaps five times as common. (Private APIs are not exposed to the public, instead being used only by a single firm or by its close partners.)

Companies from AccuWeather to Zynga – and every letter in between – have started participating in the API Economy. These companies are all (more or less) rational, investing scarce development resources carefully in hope of maximizing ROI…just as you are. They are investing in APIs not because it’s hip or cool (although that’s also true), but because there are sound economic reasons for doing so…

…which I’ll be detailing in future research notes, blog posts, and the like.

Why me?

I’ve been actively engaged in the development and promotion of APIs for decades, from MacApp in the late 1980’s through Windows in the 1990’s to OpenStack in the early 2010’s. Over that time, I’ve founded developer groups, directed non-profit developer associations, evangelized APIs, hired and trained evangelists, and helped companies define their API strategies and Developer Relations activities. I’ve used APIs to attack, and APIs to defend; I’ve used proprietary APIs and open source APIs; I’ve used APIs to commoditize and APIs to de-commoditize. I’ve been there and done that, adapting to new technologies and circumstances as they have arisen, and I’ve unlocked millions of dollars in value along the way. I may not have “written the book” on making APIs successful, but I did write Wikipedia’s entry on it…and I’m still learning every day from smart people like you.

Whether you want to explore offering your first API, or need to make your existing APIs more successful, I can help.

As we say here in Texas, “this ain’t my first rodeo.”

Why Cutter?

Cutter is very well positioned to help lead you in the API Economy, due to its strategic depth in Business Architecture, Capability Mapping, Agile Project & Program Management, and Data Insight – all of which are building blocks of the API Economy.

Next Steps

Soon, Cutter will be offering a new Quick Start service, tentatively named the API Strategy Quick Start, to make it easy for its clients to get explore their options and get started in the API Economy.

I look forward to working with Cutter’s other consultants, and with you, in this new service.

Just remember: In the API Economy, choosing not to play is choosing to lose. You can play to win, or you can play to draw, but either way, you gotta play.

Game on!  :-)

Jim Plamondon


Jim Plamondon

Jim Plamondon is a Senior Consultant with Cutter Consortium's Agile Product & Project Management practice. Throughout his career, he has helped accelerate the adoption of state-of-the-art disruptive computing platforms.


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