APIs: A Strategic Imperative

Summary

An Application Programming Interface (API) can be defined as: “…a set of routines, protocols, and tools for building software and applications...” Stated another way, an API can be described in terms of its inputs and outputs, which mask its underlying software processes. A rudimentary example would be an API query to an external computer for the first 10 prime numbers, with the output being those numbers. A good API makes it easier to develop a program by providing all the building blocks, which are then assembled by the programmer. Think of an API as a contract between two pieces of software to exchange information with each other.

Sounds like a great thing for IT departments to put into their annual budgets, but nothing that business decision makers should worry about. But you might feel differently if you knew that 90% of Expedia’s revenue came from its API commerce, or that Salesforce.com realized 50% of its revenue through users of its APIs. Salesforce has over 300 developers building extensions of Salesforce into new markets, including travel distribution. This Analysis explores why businesses should consider opening their APIs, how to monetize open APIs, and the potential global impact of doing so. In addition, it highlights several key travel-oriented APIs.