Jul 052013

API Economy offers new business opportunities for businesses of different types and sizes. Potential benefits range from direct increase in sales, reaching new markets, to brand name expansion and unlocking of human innovations of third-parties. It is important to understand, however, that while API Economy offers exciting new possibilities, it does not guarantee that all or any of its promises are fulfilled.

Just because you expose a novel and valuable API does not guarantee that it will be successful or that it will have the results that you expect. There are a number of different factors and risks that come into play. One might get lucky and achieve success without much effort and understanding how it came to be. On the other hand, one might fail miserably just as easily.

What can be done about it?

Well, there is no guaranteed way to success, but there are approaches that can move the odds significantly in your favor. What we need is a suitable methodology for exposing and managing of APIs.

API Economy is still at its early stage and has plenty of unknown factors. It is an exciting road with destination that is not yet clear. As such, it is likely to take time until a good methodology (or methodologies) gets established and proves itself in practice. That does not mean we need to start from scratch. We can take an existing framework that serves a similar purpose and adapt it for the API Economy. One such framework is ITIL – Information Technology Infrastructure Library.

ITIL (version 3) is a set of industry best practices organized in a framework for aligning business needs and IT. It takes a service based approach and covers the full lifecycle of IT services, starting from strategy, design, and all through service operation, change, optimization, and potential removal.

As the name suggests, ITIL is aimed at management of IT services. A straightforward application of ITIL would be to use it to implement desired API as an IT service. This would completely fit within the ITIL framework, but would be of little help in business aspects of API strategy and design.

However, if you are experienced with ITIL, still you can take advantage of it for building a successful API Economy, though through a different avenue. Instead of using ITIL directly, we can look at ITIL, and at IT service management in particular, as an analogy for API management. We need to make two key changes in how we view the framework:

  1. Trivial: we replace the notion of IT services with the notion of APIs.

  2. We apply the framework starting from the business layer of an organization. This allows to cover critical business aspects of the API lifecycle, such as business goals, context, risks, and strategy.

If you look at the notions of IT services in ITIL and APIs in the API Economy conceptually, you will see many similarities. Both are focused on getting business value. Both are tools to do that. Even the questions that we are trying to answer for both are similar:

ITIL API Economy
What IT services to create? What API to expose?
How to ensure IT services deliver expected value? How to ensure the success of an API?
How to bring a new IT service into production efficiently? How to expose the chosen API efficiently?
How to manage active IT services? How to manage exposed APIs?

In fact, aspects that have already been identified in the industry to be critical to API success, such as choosing the right business model and establishing a proper marketing strategy (including establishment of a developer community, acquiring and maintaining trust and good relationships with API consumers, etc.) fit well within the different processes and activities of ITIL framework (e.g., Business Relationship Management Process).

This blog has been written with Tadas Remencius (Tadas.Remencius@unibz.it).


Giancarlo Succi

Giancarlo Succi is a Senior Consultant with Cutter's Agile Product & Project Management practice. He has consulted with private and public organizations worldwide in the areas of Agile methods, software quality (measurements), software system architecting, design, development, IT strategy, and training for software personnel.


  One Response to “Making API Economy Successful – the Lesson from ITIL”

  1. Salesforce.com now generates more than half of its $2.3 billion in revenue through its APIs, not its user interfaces. Twitter is said to process 13 billion transactions a day through its APIs. Google is around 5 billion transactions a day. For it’s part, Amazon is rapidly closing in on a trillion transactions. John Musser of Programmable Web noted that Expedia’s affiliate network counts $2 billion worth of business a year via APIs. He has said that Expedia executives have indicated that 90% of what they do is business through APIs.

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