Small IT providers, don't miss the API opportunity

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This article appeared in the April 2016 issue of CRN magazine.

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Small IT providers, don't miss the API opportunity

Would you ask your SME customers what their API strategy is? Possibly not – it seems a little arcane to expect a retailer or law firm to even know what the acronym stands for (application programming interface, but of course you already knew that).

Yet this is happening at the big end of town. Enterprises are looking at what systems they can connect to. The motive is to use another stream of data or additional services to boost their own business. We are moving into a phase where everyone is trying to connect to everything. The internet-enabled fridge was just the beginning. We can now park our car in the garage using a smartphone.

Peer behind every major technology announcement and there is nearly always an implied reference to APIs: wearables connecting to smartphones; accounting software connecting to bank feeds; e-commerce platforms connecting to, well, other e-commerce platforms.

That last example is clearly relevant to SME retailers. In February, Australian software company (woo-hoo!) BigCommerce connected to eBay’s API so retailers could market their products to an entirely different audience. The integration costs nothing to invoke, yet a new database of buyers, reached by simply pushing your content from one e-commerce platform to another, brings hard economic value. If you were advising that retailer, wouldn’t you consider the API integrations for their e-commerce platform?

Another one for retailers is the latest integration of point-of-sale system Square with Xero. The two companies have worked to essentially remove the sign-up process from Square by using Xero’s login credentials. This deeper API integration has encouraged many more SMEs to sign up to Square and receive faster payments of their online invoices.

Software APIs may turn out to be small fry compared with the tidal wave of tech promised by the internet of things. This trend is still so new that it’s hardly made a scratch on SME. But if you think about one hugely popular category of IoT, sensors, you can quickly find valuable cases for its use. Some existing examples include RFID tags on company assets such as convention displays that could quickly show someone what is in the office or what is on the road.

One retail solution involves shelf sensors and video cameras to A/B test positions of products and pricing. Or smart mirrors that display information about the person looking in them (such as, depressingly, your weight).

The enterprise is way ahead here. A survey by Mulesoft in September found that 43 percent of respondents were either already implementing IoT or plan to do so within the next five years. (More cool stats from the survey, conducted in May 2015 with 300 IT decision makers: 73 percent of organisations integrate more than 20 apps; the largest integrate over 100.)

“The survey indicates Australian and New Zealand organisations have identified the business potential offered by APIs and are putting them to work. They spot clear benefits when it comes to improving customer satisfaction and boosting revenues,” said Jonathan Stern, MuleSoft’s ANZ VP.

“We’re seeing these trends among our customers who frequently tell us about their desire to extend to applications outside their walls and leverage new technologies, such as the internet of things. The real business value comes from connecting these apps, data and devices with existing assets.”

IoT is still far enough away for SME resellers to make plans in good time. However, you should be looking now at how APIs can benefit your business and those of your customers.

Almost half (44 percent) of respondents in the Mulesoft survey said their API strategy was creating new revenue streams. More than a third (37 percent) said it gave them access to new digital value chains and extended market reach.

If you can promise your customers either new revenue streams or new markets they will be lining up to give you money. 

Sholto Macpherson is a journalist and commentator who covers emerging technology in cloud.

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