Industry Insights

APIs: The New Must-Have Tools for Modern Commerce

APIs have been around for decades, but in today’s digital transformation era, they have become the critical building blocks powering our connected world. Whether you’re withdrawing cash from an ATM machine, talking with your friends on Facebook or getting a prescription refilled, you’re interacting with dozens – if not hundreds – of APIs behind the scenes.

APIs have become integral in the digital age because they allow data and functionality to be accessed. A software vendor, a systems integrator or an in-house business group may expose functionality using APIs. Once published as an open, callable API, that data and functionality can then be consumed by anyone with appropriate rights. APIs democratize access to data and functionality like never before. 

APIs specify the what, but not the how. Providers of data and functionality document what they’re offering in great detail, but do not describe how the data or functionality they’re exposing is produced. The provider can offer promises about the uptime of the API, as well as response times, authentication and authorization schemes, pricing (often a charge per defined number of API calls), and limits on how often the API can be called, and so on. If the consumer agrees to the terms offered by the producer and has the proper permissions from the provider, they’re free to call the API.

Without an API, you’d be left to directly query databases and perform other tricks that expose the caller to too many of the implementation details of the application you’re calling. An API abstracts away all of those details.

Today, APIs serve almost as little Lego bricks of data and functionality that anyone can weave into an application. You can log into Amazon Web Services, Google Cloud or Microsoft Azure and have instant access to hundreds of APIs ranging from core infrastructure such as DNS and load balancing, to advanced machine learning-based APIs that perform image or speech recognition. Every week, cloud vendors are adding new APIs.

It’s only recently that APIs have been applied to commerce. Most of today’s dominant commerce platforms were built in the 1990s to exclusively serve web pages. Without Digital Experience Platforms and Content Management Systems, there was really no need for APIs. At the time, API technology also was very immature by today’s standards.

Today, commerce is extremely consumer-oriented, with customers expecting to browse and transact anywhere, any time on any device. APIs uniquely allow for any bit of data or functionality to be consumed from any client – well beyond the web. They are truly revolutionary when applied to commerce, and their integration into commerce solutions is benefiting everyone in the ecosystem:

For end consumers, APIs allow for functionality and data to be consumed from any device, anywhere. Gone are the days when the only way to interact with an organization was through a browser-based website on a desktop. Consumers are now fully immersed in mobile devices, tablets, voice, wearables, and even “smart” devices such as internet-connected refrigerators. They’re accessing functionality and data through third parties such as social media and messaging platforms, native apps accessed through proprietary app stores and native clients like those found in cars and appliances.

For organizations building consumer-facing experiences, it’s easier to consume functionality and data as a service over an API rather than downloading, installing, configuring, running and maintaining large stacks of software and hardware. It makes much more sense to pay a vendor to run multitenant copies of the software for you at scale. You just get an API that you can code to, with the functionality delivered as a service. No need to install anything.

Finally, software vendors like exposing their functionality and data as APIs because it allows outside developers to wire functionality and data into their applications in pieces. Rather than a large one-size-fits-all software package that must be entirely adopted and then customized, an API-based approach allows developers to consume smaller, more granular pieces of functionality from specialized “best of breed” vendors. This strategy is how public cloud vendors have changed the face of IT.

Perhaps the most important advantage of APIs is time to market for all parties involved, which is arguably the most important competitive differentiator in today’s digital revolution. Developers can add simply data and functionality in little pieces. Organizations don’t have to download, install, configure, run, or maintain anything. Software vendors can release new functionality many times a day, with the consumer of the API immediately seeing it.

With benefits to all constituencies, it’s clear why APIs are quickly taking over commerce. No other technology enables omnichannel commerce like APIs, and no other technology allows for such rapid innovation. The pace of change in commerce is rapidly accelerating, and APIs will continue to play a leading role.


Kelly Goetsch

Kelly Goetsch

As the Chief Product Officer at commercetools Kelly oversees product management, development and delivery. Coming to commercetools from Oracle, he led product management for the company’s microservices initiatives. In addition to his new O’Reilly® book APIs for Modern Commerce, he has authored - Microservices for Modern Commerce (O'Reilly, 2016) and E-Commerce in the Cloud (O'Reilly, 2014).

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