In their infancy, application programmer interfaces (APIs) were dismissed as merely a geeky tool for niche start-ups and other cloud-first software developers. But times are dramatically changing as service providers realise the value of these nifty tools in helping them create vital revenue from the new app economy.

The ever-increasing consumption of online entertainment and streaming through OTT platforms has posed a serious threat to traditional communication service providers (CSPs), but APIs are helping them to stay profitable in the digital economy.

Without APIs, every integration between business systems becomes almost custom, which is very costly and time-consuming. They provide a clear, defined way for systems to communicate with each other, allowing CSPs to be nimble and adjust to the changing needs of the market.

As a result, CSPs are quickly realising that APIs assist them in driving consumption of their core services, such as voice and messaging, and enabling services, like payments and location.

>See also: Internet of Things: is API management the weak link?

Entire companies are now using APIs and genuinely changing their industries for the better. Services and businesses like Uber, SAP, TripAdvisor, Google Maps and Airbnb are not only reshaping entire marketplaces, but also creating brand new ones.

The demand for APIs

APIs are reshaping the telecoms industry, helping CSPs to solve challenges they face around the commoditisation of their services and better compete with OTT challengers and non-traditional providers entering their market.

As the business world becomes ever-more reliant on cloud-based services and real-time data, APIs help CSPs provide their resources to other companies and vice versa. This is opening up a wide array of rich partnership opportunities that allow companies to cash in on their services and data, while tapping into the data and services of other firms.

This technology is helping CSPs to provide more fluid connections between their multiple groups and systems and make the most of their key corporate resources. They speed up the communication between apps and platforms, allowing service providers to deploy innovative high-quality services faster than previously possible by bypassing one-on-one, costly and time-consuming proprietary integration.

APIs also enable CSPs to spread their geographical reach, offering them a more robust global presence. Some of the newer trends we’re seeing include APIs moving from a SaaS model to automating business processes so companies can outsource entire portions of their operations.

Opportunity in numbers

The telco API market is estimated to be growing 26% year-on-year, with a global industry revenue base of £167.5 billion by 2020, according to Programmable Web.

The rapid expansion of the Internet of Things is further fuelling the importance of APIs, with IoT-related APIs expected to grow by at least 75% annually and to reach an industry value of $75 billion by 2020.

Without access to APIs it would be impossible to extract information from internet-enabled devices, let alone integrate them with each other and create new digital services.

>See also: How an API-first approach is driving digital transformation in banking

Likewise, the unified communications (UC) industry has evolved dramatically in 2015 and, with the help of APIs, is set to flourish further. UC has become integrated communications embedded within any application, but with the assistance of APIs it will now be possible to integrate human components into the digital experience, which will drive continued growth.

These are just a few areas in which APIs are helping all kinds of businesses boost their revenue and become more effective. The magic ingredients behind this seismic shift are APIs’ openness and ability to scale in ways that have been previously unimaginable.

With collaboration and connectivity now integral to the success of the modern day business, companies of all sizes will increasingly embrace APIs in their business processes over the next 12 months.

Sourced from Natasha Tamaskar, VP cloud strategy, Kandy