Our “State of the API Economy 2021” report signifies that regardless of the numerous monetary pressures and disruptions wrought by COVID-19, 75% of corporations continued specializing in their digital transformation initiatives, and nearly two-thirds of these corporations truly elevated their investments and efforts.
As a result of APIs are how software program talks to software program and the way builders leverage knowledge and performance in several methods, they’re on the middle of those digital transformation initiatives. As organizations internationally have shifted how they do enterprise, IT organizations have scrambled to fulfill calls for for brand new functions—and to do extra with APIs.
API analytics utilization is seeing an explosive progress
Main companies use API analytics to not solely inform new methods but in addition align management targets and outcomes. As a result of government sponsors are inclined to help initiatives that produce tangible outcomes, groups can use API metrics to unite leaders round digital methods and justify continued platform-level funding for the API program. This demand is answerable for surging API analytics utilization.
Amongst Apigee prospects, API analytics adoption elevated by 75% from 2019 to 2020—progress that displays organizations’ broader have to holistically assess the enterprise and digital transformation impacts of API applications.
API analytics level to alternatives
To stay aggressive in right this moment’s hyper-connected world, one key query must be answered: “How do we drive impact with our digital initiatives while also making sure we’re putting our limited resources to the best use?“
API analytics support API providers in this endeavor by helping them to determine which digital assets are key drivers of business value and to create a strategic view of digital interactions. By tracking which APIs are being consumed by certain communities of developers, which APIs are powering the most popular apps, and how performant APIs are, organizations can understand which digital assets need optimization or iteration, which digital assets are being leveraged for new uses or by new communities, which digital assets are driving revenue, and more. Beyond helping enterprises answer questions they’ve already identified, API analytics also surface patterns that may be unexpected—and that help both IT and business leaders refine the KPIs they use analytics to generate. If an API becomes popular with developers in a new vertical for example, that may persuade the enterprise to focus on KPIs like adoption among these specific developers, rather than on overall adoption.
Best Practices for defining effective API metrics
When our survey respondents were asked how API usage at their company is currently measured, top responses included metrics focused on API performance (35%), on traditional IT-centric numbers (22%), and on consumption of APIs (21%). But when asked about preference for API measurement, business impact topped the list (43%). The data suggests that API effectiveness metrics vary across geography and industry, with measurement by business impact or API performance serving as a collective north star.
Establishing a framework to connect digital investments directly to metrics and key performance indicators (KPIs) is among the most important areas of strategic alignment for ensuring a successful API strategy. Successful programs clearly define and measure a combination of business metrics, such as direct or indirect revenue, and API consumption metrics, such as API traffic, the number of apps built atop given APIs, and the number of active developers leveraging APIs.
Good KPIs are a cornerstone of an effective API analytics effort, but they can be difficult to define. Here are some effective KPIs to help position an API program for success.
Average and max call latency: P1 latency, or elapsed time, is an important metric that impacts customer experiences. Breaking down this KPI into detailed metrics (e.g., networking times, server process and upload and download speeds) can help provide additional insights for measuring the performance of APIs–and thus of the apps that rely on them.
Total pass and error rates: Measuring success rates in terms of the number of API calls that trigger non-200 status codes can help organizations to track how buggy or error-prone an API is. In order to track total pass and error rates, it’s important to understand what type of errors are surfacing during API usage.
API SLA: While one of the most basic metrics, API Service Level Agreements (SLA) is the gold standard for measuring the availability of a service. Many enterprise SLAs leave software providers little-to-no room for error. Providing this level of service means a provider’s upstream APIs need to be running–and that requires API monitoring and analytics to maintain performance and quickly troubleshoot any problems.
Developers: This target is commonly intended to improve API adoption. Enterprises should consider using this metric in combination with other metrics that confirm a given API’s business utility.
Onboarding: The portal that application developers use to access APIs should ideally feature an automated approval process, including self-service onboarding capabilities that let users register their apps, obtain keys, access dashboards, discover APIs, and so on. The ease and speed with which developers can navigate this process can significantly impact the adoption of an enterprise’s API program. Just as consumers are unlikely to adopt a service if too much friction is involved, developers are less likely to adopt APIs that cannot be easily and securely accessed.
API traffic: This target can help API programs develop a strong DevOps culture by continuously monitoring, improving, and driving value through APIs. Enterprises should consider coupling this target with related metrics up and down the value chain, including reliability and scalability of back-ends.
API product adoption: Retention and churn can identify key patterns in API adoption. A product with high retention is closer to finding its market fit than a product with a churn issue, for example. Unlike subscription retention, product retention tracks the actual usage of a product such as an API.
Business Impact KPIs
Direct and indirect revenue: These targets track the different ways APIs contribute to revenue. Some APIs provide access to particularly rare and valuable datasets or particularly useful and hard-to-replicate functionality—and in these cases, enterprises sometimes directly monetize APIs, offering them to partners and external developers as paid services/products. Often, however, an API can generate more value if enterprises focus on adoption rather than upfront revenue. A retailer won’t make much money charging partners for access to a store locator API, for example, but if they make the API freely available, partners are more likely to use it to add functionality to their apps and the retailer is more likely to benefit because its business is exposed to more people through more digital experiences. It is important to be able to track both direct revenue from monetized APIs and forms of indirect value, such as how adoption of an API among certain developers supports those developers’ revenue-generating apps. Likewise, it is important to be able to adjust pricing models to find the right blend; analytics can reveal, for example, whether an API is most valuable if offered for free, if offered for a flat subscription rate, or if offered in a “freemium” mannequin with free base entry and paid tiers.
Companions: This goal can be utilized to speed up companion outreach, drive adoption, and exhibit success to current enterprise models.
Value: Enterprises can scale back prices by reusing APIs reasonably than initiating new customized integration efforts for every new mission. When inner builders use standardized APIs to hook up with current knowledge and companies, the APIs develop into digital belongings that may be leveraged many times for brand new use instances, usually with little if any overhead prices. By monitoring API utilization, enterprises can determine situations wherein expense that in any other case would have gone to new integration tasks has been eradicated because of reusable APIs. Likewise, as a result of APIs automate and speed up many processes, enterprises can determine how particular APIs contribute to sooner growth cycles and sooner completion of enterprise processes–and what number of sources are saved within the course of.
API analytics is on the core of profitable API applications
Complete monitoring and sturdy analytics efforts for API applications are among the many most vital methods to make data-driven enterprise selections. For an enterprise not sure how you can scale its API program or unsure about which subsequent steps to take, analytics could actually be the difference-maker, offering insights that illuminate beforehand hidden alternatives, take away ambiguity, drive consensus, and assist the enterprise develop.
Citrix is among the many Google Cloud prospects utilizing Apigee’s monitoring and analytics options to proactively monitor the efficiency, availability, and safety well being of their APIs. “Apigee has a lot of built-in analytics that run automatically on every API, and Citrix can track any custom metric it wants. We’re gaining real-time visibility into our APIs, and that is helping us grow a strong API program for both internal and external developers.” says Adam Brancato, senior supervisor of buyer apps at Citrix.
When monitoring and analytics instruments are built-in immediately, reasonably than bolted on, the platform managing APIs is similar platform capturing knowledge—which implies the info may be acted on extra simply and in near-real time. A full lifecycle API administration answer reminiscent of Apigee supplies close to real-time monitoring and analytics insights that allow API groups to measure the well being, utilization, and adoption of their API, whereas additionally providing the flexibility to diagnose and resolve issues sooner. The answer additionally allows groups to maintain abreast of all important elements of their API-powered digital enterprise.
Need to be taught extra?
The “State of API Economy 2021*” report describes how digital transformation initiatives developed all through 2020, in addition to the place they’re headed within the years to come back.
*This report relies on Google Cloud’s Apigee API Administration Platform utilization knowledge, Apigee buyer case research, and evaluation of a number of third-party surveys carried out with expertise leaders from enterprises with 1,500 or extra workers, throughout the US, United Kingdom, Germany, France, South Korea, Indonesia, Australia, and New Zealand.