API economy (application programming interface economy)

This definition is part of our Essential Guide: Taking a look at today's API management services and strategies
Contributor(s): Maxine Giza

API economy (application programming interface economy) is a general term that describes the way application programming interfaces (APIs) can positively affect an organization's profitability . An API is a customer interface for technology products that allows software components to communicate.

There was a time when only software professionals knew about APIs. Today, business leaders are aware of the financial impact APIs can have and companies are generating revenue by exposing APIs as business building blocks for third party applications.

The emerging financial effects of APIs on businesses have gained steam thanks in part to mobile and social media technologies. Major companies that have gained revenue from APIs include, Amazon, Facebook, Twitter, and Google.

This was last updated in September 2014

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