For some time now, we have been hearing about how software is eating up the world. We at Lob are seeing a fundamental shift towards APIs eating up software. In the past, customers demanded fully-loaded software applications. But today, they are asking for access to the layer underneath: the API.
Garry Tan wrote a great blog post about how APIs will take over various business functions from SMS to printing. APIs will rule the way businesses communicate and interact in the future.
In the past, people would use Paypal for checkout – today, people use Stripe to build their own checkouts. Instead of managing and learning applications like Quickbooks, developers are using Subledger to build accounting right into their applications. The list of APIs replacing software solutions is just beginning and will continue to proliferate in the future.
Here are a few reasons why developers and businesses are choosing to use APIs instead of buying software solutions:
APIs provide developers with the flexibility to incorporate features in the way they see fit. Software is limited to the functionality that the creators built into it. Consequently it doesn’t offer the same level of integration that APIs enable. For example – Stripe gives you the tools to create your own payment solutions, but if you use Paypal you would be limited to their module. Twilio gives you access to SMS and voice infrastructure to create your own unique solutions and tight integration instead of buying out of the box software solution for two-factor authentication. Before APIs, developers could purchase software solutions but were limited in how they could integrate it into their existing applications. Now that paradigm is shifting: by having full access to the API layer beneath, developers can build their own custom solutions and ensure tighter integrations with existing software.
A common mantra we hear is to avoid “reinventing the wheel”. APIs give companies instant access to complex infrastructure that they don’t want to spend time or resources to manage. Software requires users having to download, manage, and configure applications. For example, if you require CDN for your image hosting solution, Cloudflare’s API would be a better fit since it provides instant access to a robust CDN to use as they see fit, whereas legacy software require time to set up, configure, and constantly manage a CDN for your company. Not having to worry about underlying infrastructure or hardware, setup, and maintenance and simply making API calls eliminates development hurdles and reduces the amount of friction needed to build new features into a product.
APIs give companies the ability to access underlying data whereas software applications may not. This allows companies to control how much data is shown and also manipulate the data to create dashboards or reports. The Linkedin and Facebook APIs are a great example of how new applications built using APIs can access Facebook or Linkedin’s social data whereas an out of the box software application wouldn’t have the data by itself. Another example is Google Map’s API, which allows customers easily enable mapping functionality and manipulate Google’s mapping data within applications. Previous to these APIs finding an out of box software solution that provides open access to their data would be near impossible.
APIs are quickly becoming the primary customer interface for technology-driven products. At Lob, we are excited to be changing the way that companies think about their printing & mailing needs while introducing technology-enabled consumer-centric business models into incumbent industries.