Posted by: asmitty | April 22, 2013

API’s making it RAIN

Today Layer7 Technologies was acquired by CA for an undisclosed sum. This follows the very recent acquisition of Mashery by Intel for $180 million. Effectively half of the pure play API management vendors have been acquired in less than 6 days; so why is this happening?

API is the abbreviation of Application Programming Interface, or more specifically, Web services API (WAPI). This is the code that allows mobile application developers to interact with servers in a data center so that you can do stuff. More often than not, the apps that you download do not reside entirely on your smartphone. You have a lightweight client with most of the compute being done in one of the cloud providers like Amazon Web Services for example.

Recently the market for API’s has seen mammoth growth. In 2005, there were less than 100 open APIs published by organizations that were seeking firms and developers to integrate with their data and applications. As we go into 2013, that number has inflated into the tens of thousands (source 451 Research, C. Lehmann). A move like this means that Intel is (a) moving deeper into the data center while simultaneously (b) moving away from chips that power servers in those data centers. Why? As usual, all you have to do is follow the money.

CA on the other hand is seeking to lessen its dependence on mainframe associated revenue and remake itself as an Internet company. By acquiring Layer7 talent and customer base, they may just be onto something.

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