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Why the API economy is key to creativity in business

Jul 11, 2019

by Ariane Gorin, President of Expedia Partner Solutions (EPS)

"One of my favorite analogies for APIs (and I have a couple) is as the Lego blocks of the digital world. You can take the same set of blocks and use them to build a space station, a race car, a house, or even an entire city. It just depends on how you put them together.

Of course, that’s a pretty basic view of a complex topic, but it’s a simple starting point for understanding just how many possibilities, how much scale and how much innovation APIs have brought the wider world of business.

Take the example of an independent mom-and-pop store. Ten years ago, if the owners wanted to take the business online, once they had gone through the potentially lengthy process of getting a website built, they’d need to look at building a payments gateway. Now they can go to Stripe, iZettle or any one of a number of providers. Payments is just one area that’s seen enormous startup activity in recent years precisely because API providers like Stripe have built businesses out of making once-complex technology integrations simple.

The same has been true for mapping, logistics, natural language processing; these are all fundamental technologies that require expensive and time-consuming development. Once these capabilities have been created by a company, APIs allow that company to seamlessly connect the capability to thousands of other companies, scaling their innovation through APIs. Today, life is simpler due to APIs.

The net gain isn’t just an easier life. For the independent store owners, it means they can spend less time and fewer resources on difficult specialisms, effectively buying “off the shelf”, and instead focus on what they’re good at and what differentiates them to their customers. The same goes for businesses of all kinds. Finding partners for essential but complex services can remove huge burdens from a company’s operations.

This is becoming an increasingly important question for senior executives: where should I partner, and where should I invest in developing services and capabilities on my own? What is a valuable investment versus a waste of creative energy that would be better used elsewhere? And if I do partner with someone, are they building a solution based on standard APIs or am I outsourcing to a company that is building a custom product which then becomes expensive and complex to support, leading to hidden costs down the line?

At Expedia Partner Solutions (EPS), we help travel companies who are asking themselves these very questions. For example, when a travel start-up in South East Asia is looking to provide a hotel in France to its local travelers, instead of having to build its own team to manage hotel relationships in Europe, they can use our API, EPS Rapid. On any given day Rapid can receive over 1 billion API calls, across more than 600,000 properties in over 2,000 markets, demonstrating just how powerful an API can be in aiding a partner’s reach. This is just one example of the kind of partnership that sparks innovation and growth in today’s global economy.

Today, a crucial part of maintaining an innovative business should be regular technology health checks: do I still need to carry out these services myself or is someone else providing them faster and more scalable way that would be more effective for my business. It’s key to success, and it’s also increasingly powerful to drive creativity and differentiation in businesses. That, to me, is the real beauty of the API economy." 

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