In our previous blog, How Real‑Time APIs Power Our Lives, we showed how APIs, while largely unknown to the average consumer, have become an integral part of our daily lives online. From a business perspective, APIs play a pivotal role in digital transformation, which industry analyst IDC believes companies must achieve soon if they hope simply to survive, let alone compete, in today’s rapidly changing business landscape. Despite the importance of digital transformation, IDC notes in its recent survey, APIs – The Determining Agents Between Success or Failure of Digital Business, that a full 25% of companies haven’t committed to completing their digital transformation within the next decade.
Modernization for the Many, Not the Few
APIs are not relevant only to technology companies, either. According to the IDC survey, the majority of companies in many verticals already use an API management platform, including 72% of media and business services companies and 71% of financial services firms. Even companies in traditionally “tech‑light” industries are using an API management tool: 60% in retail and wholesale, and 52% in both private healthcare and education. This proves the point we’ve argued before – every business, regardless of its industry, is becoming a technology company.
IDC refers to companies that have adopted an API management platform as “API focused” and those without as “API laggard”. They found a substantial difference in how well the two groups capitalize on their digital spend by generating revenue from digital channels, which range from ecommerce platforms to mobile apps and online events, such as webinars and video streaming. A quarter of API‑focused companies attribute up to 30% of their revenue to digital channels, but only 10% of API‑laggard organizations can say the same.
API Demand Across Borders
IDC expects the amount of API traffic to increase dramatically in the next two years, across both industry verticals and geographic regions. Overall, 71% of organizations expect to increase the amount of API traffic they generate and handle during that period. IDC calculates that as a result, API call volume will increase by at least 25% and up to 75% for about half of all businesses in the financial, retail, telecom, utility, and manufacturing sectors. It predicts that same range of 25–75% growth for half of all businesses in the US and DACH markets, and 41% in the UK and Ireland.
This massive increase in API calls requires a management solution that is dynamic enough to adapt to growth in demand, traffic, and other changes in consumer behavior. Almost half of top‑tier organizations are already planning to futureproof their digital performance by investing in API management and traffic management platforms such as NGINX Controller, which enables teams to define, publish, secure, monitor, and analyze APIs, while keeping developers in control of API design. Organizations that lag behind on this trend need to adopt application modernization platforms if they wish to stay relevant for their customer base and stand out from competitors over the next decade.
Navigating the Challenges for API Modernization
A major challenge for most businesses lies in the real‑time performance of their API calls and reducing related latency. Over 90% of organizations expect a latency of under 50 milliseconds (ms), while almost 60% expect latency of 20ms or less. With these high expectations, NGINX is able to stand proud, as we’ve previously shown when comparing the performance of the NGINX Controller API Management Module against competitors.
Similarly, over half of businesses surveyed by IDC indicated that one of the larger challenges they face is to implement an API management platform that can deal with an increasingly common mixture of containerized and cloud‑native environments. This can often appear intimidating, if not clunky, to IT teams that have more experience with monolithic environments, but it is exactly where NGINX performs at its best – reducing complexity without affecting performance.
According to IDC’s research, over a third of businesses consider complexity – related to both applications and their infrastructure – to be a top challenge when managing APIs in a microservices environment. That isn’t too surprising, however, when any confusion over microservices and service meshes can make modernization a daunting task to tackle.
These teams, however, need to allow for the possibility of improved simplification, performance, and insights in order to solve such challenges in API management. Just under a quarter of surveyed companies noted difficulties in deployment and consistently maintenance of their API estate, while another quarter need better analytics and performance. While API complexity and security are barriers to early API adoption, 41% of organizations look for an API management solution which is simple and easy to use, such as NGINX Plus and the NGINX Controller API Management Module.