Posted by: asmitty | March 24, 2009

API is core to your integration strategy


If you provide, or have plans for exposing, a web service API, your primary focus is on providing integrations with your application or service and other applications. The problem is, the API in and of itself does not go far enough. There are business logic, endpoint mappings, and roll-ups that require the help of a programmer and application expert. Should you expect that your clients have access to these resources and can consume your API?

SaaS consumers are, generally speaking, small to midsize companies. Yes, I acknowledge that big players like are competing with Oracle in large accounts, but historically speaking, SaaS applications can find opportunities amongst smaller workgroups. One of the reasons for this is the TCO, but that is the subject for another post.

Those smaller companies usually do not have the time or resources to complete the task of integrating two systems via the API. Here is what Bob Warfield says on the matter:

“When you have a large IT group, you can afford to, and indeed, may even want to dedicate some of them to building the integrations.  When you have a small group, if the vendor can’t do it for you, it probably won’t ever get done.  So it isn’t that the little guys care more, they’re just helpless to get any kind of solution if they care at all.

What does this mean for SaaS vendors?  In this case, having out-of-the-box tight integration with other SaaS vendors (or On-premises packages) was a big differentiator.  It lowered the deal friction (less to worry about on the custom install side) and increased customer satisfaction (hey, we could never get these two systems to talk before!).”

This raises a question for you; what is your ultimate goal that you are trying to achieve with your API? Do you plan to supply content (water) or build integrations (faucets) to all the various endpoints that your clients will want integrations with? I use the analogy of water and water faucets to illustrate in very simple terms. As the supplier of content, you should be concerned that your water is clean, metered, and with some assurances of availability. That is enough to worry about. It is the system integrator, or faucet manufacturer that designs the correct interface for specific use cases.

Trying to be both can be frustrating, time consuming and expensive. If you know your market well enough, it could make business sense to “own” some integrations – QuickBooks is the GL application for over 80% of the small businesses out there so it would be prudent for some business managers to make this investment.

Examine your business model
Are you a supplier of content or are you in the integration business? How does this impact your API strategy? Do you have reporting of who your clients are and how much “water” they consume?


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