What is API: definition, types, and practical examples for your business
With the growing demand for system integration and the need to develop applications that communicate with different platforms, knowing what API is and why they have become increasingly popular and important, is fundamental to your business.
According to a study conducted by Research and Markets, the size of the API management market is expected to grow from US$ 4.5 billion in 2022 to US$ 13.7 billion in 2027, at a compound annual growth rate (CAGR) of 25.1%.
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Source: Research and Markets [/caption]
Given the attractiveness of this business model, it's no surprise that the number of startups that provide their services through an API has exploded.
But, after all, what is API and what is it for? In this article, we will explain everything you need to know about the subject.
After all, what is API?
API is the acronym in English for Application Programming Interface or, in Portuguese, Application Programming Interface, and it's nothing more than a set of definitions, routines, and protocols that are used for the development and integration of software or applications.
It defines the ways in which software components must communicate with each other, allowing different systems to interact with each other.
In addition, the API provides a set of predefined functionalities that can be used by other applications or systems, without requiring developers to know all the details of the source code.
This makes it easier to integrate between different platforms, as it allows information to be shared more quickly and securely.
At Clicksign, for example, the integration solutions allow you to incorporate the electronic signature to a company's website or application through a simple API, allowing customers to sign documents without having to leave the environment they are already used to.
Origin of APIs: How did it all start?
The history of APIs is relatively short, dating back only to the last few decades of the 20th century. According to study “The API Economy” carried out by Deloitte, this evolution can be divided into four phases.
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Source: Deloitte [/caption]
1960-1980: the era of Mainframes and of monolithic systems
The 1960s was marked by the rise of mainframes, large centralized computers that processed large volumes of data for companies and governments. At that time, APIs didn't exist in the format we know today. Instead, the systems were built as monoliths, with all the code and functionality in one place. This made it difficult to connect different systems and share information between them.
1980-1990: the rise of APIs in financial services
With the emergence of network technologies in the 80s, the first distributed systems began to be developed. The financial sector was one of the first to adopt APIs, using services such as SWIFT, which allowed communication between banks and financial institutions around the world. Still, APIs were mainly used in internal systems and communication between systems from different companies was still limited.
1990-2000: the internet and the first web APIs
In the 90s, the internet became popular and became a global platform for communication and commerce. A World Wide Web was created in 1991 and, from then on, APIs began to evolve to their modern form.
The first web communication protocols, such as HTTP and HTML, and the first web APIs appeared, allowing developers to access information and services from other companies over the internet.
APIs like eBay, Amazon Web Services, and Salesforce were created during this period, paving the way for the API economy we know today.
2000-present: the explosion of the API economy
In recent years, API economy exploded in popularity, as more and more companies began to adopt APIs as a way to connect to other systems and services.
In addition, with the development of standards such as REST and JSON, they became increasingly standardized and easy to use.
Today, millions of APIs are available around the world, allowing developers and non-developers to create innovative applications that relate to a variety of services and data sources.
What is an API for?
The API aims to allow different systems to communicate more efficiently, allowing integration between platforms and applications. In this way, it is possible to optimize processes and increase the efficiency of operations.
APIs are also widely used to allow access to third-party data and information, such as social networks, geolocation services, data analysis tools, and many others.
In this way, developers are able to create more complete and integrated applications to provide a better experience for users.
In addition, an API can be used to create new services and products, such as applications of Delivery, which use the APIs for map and geolocation services to track and deliver orders from their consumers.
In its essence, the purpose of an API is to allow a specific system to use the functionalities of the others without requiring the user to migrate between platforms.
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Source: RedHat [/caption]
APP vs API
Although apps (apps) and APIs (Application Programming Interfaces) are related to software and technology, they are different concepts.
Apps are programs that can be downloaded and installed on devices, such as smartphones, tablets, or computers. They provide a graphical interface for the user to interact with the software and perform specific tasks, such as editing photos, sending messages, or shopping online.
On the other hand, APIs, as stated before, work as a kind of intermediary, allowing applications to be integrated and share data and resources with each other.
How an API works: practical examples
APIs have been widely used in various fields, from the integration of corporate systems to the development of mobile and web applications. Some of the main advantages of using APIs are the possibility of code reuse and the ease of integration between systems.
To understand how, in fact, this set of commands, functions, protocols, and objectives works, how about learning in practice through examples?
- Suppose you're developing a weather app and you want to get up-to-date information from a trusted source. Instead of writing all the code to access this information, you can use a weather forecast API. This API will generally have documentation that describes how to communicate with it, including what parameters to send and how to interpret the response. For example, it may allow you to specify the location for which you want to get the weather forecast, such as a city or zip code. The API then returns a structured dataset containing information such as the current temperature, weather conditions, and forecasts for the coming days.
- Another example of the common use of APIs is in the financial sector. Financial services firms can use APIs to access up-to-date market data in real time, which can be used to make informed investment decisions. This data may include stock prices, exchange rates, prices of commodities and much more.
- In the legal sector, they are also very common. A lawyer needs a digital certificate to log in to a certain application and protocol documents with legal validity, however, it does not have to enter both the online document signature system and the digital certificate system for both to have this validity: it is enough for him to log in to the end-use platform (INSS or Projudi, for example), and there, through a API that causes electronic signature systems from the Brazilian Bar Association, communicate with the ICP-Brazil website, which can validate a document and even share it;
- No e-commerce, this can be seen in the payment tab: the consumer is on the website of their favorite store, chooses their product or service, places them in the cart and completes the purchase with their bank details on the same domain, without having to go to the bank's website. This communication between e-commerce and the banking network is provided through an API.
In addition, APIs are also used in many other areas, such as social networks, cloud storage services, location services, and more.
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Ecosystem affected by APIs | Source: Google Cloud [/caption]
Types of APIs
Overall, we see several API models developing so that companies can boost their online presence and connect with other companies and developers.
1) Public API
The public API is one that anyone can freely access and use. This type of API is often used for marketing purposes and to encourage other developers to create apps that integrate with the company's platform.
Public APIs are commonly found on social media platforms, cloud services, and e-commerce sites.
2) Private API
The private API is an application programming interface that is used within an organization. These APIs are primarily used to connect internal systems and applications, such as databases, content management systems, and enterprise applications.
Private APIs are only accessible by authorized individuals within an institution, such as Devs and IT managers.
3) API Partner
The partner API is a kind of private API that is shared with a limited number of selected business partners. These APIs are used to allow business partners to integrate with specific systems or applications, such as in affiliate programs or distribution partnerships.
Partner APIs generally require authentication and authentication to ensure that only selected business partners can access the API.
4) Horizontal API
Horizontal APIs are those that serve a wide range of industries and business functions. These APIs are generally broad and generic in terms of functionality and aimed at a wide audience.
A common example of a horizontal API is the Google Maps API, which can be used by companies in a wide variety of sectors, such as retail, logistics, and tourism.
5) Vertical API
Vertical APIs are those that focus on specific industries or specific business functions. These APIs are generally more specialized and aimed at a specific target audience.
An example of a vertical API is the Salesforce API, which is aimed at sales and marketing companies and is designed to be integrated with customer relationship management (CRM) systems.
6) Facilitator API
Facilitator APIs are those that are not designed to be used directly by end consumers, but rather to facilitate integration between other APIs.
These APIs generally handle specific functions, such as authentication, identity management, or payment management, and are used to integrate other APIs together.
An example of a facilitating API is Stripe, which is a payment management API that allows other companies to accept online payments from their customers.
Regardless of the type of API adopted, it is important to ensure that they are secure, scalable (to handle a large volume of traffic and user requests), and securely designed to prevent vulnerabilities and cyberattacks. Some examples of companies API-first include:
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Examples of businesses interested in API-first | Source: Georgian [/caption]
When to integrate via API and why is this important?
Basically, a company should think about making integrations via API when it needs to connect its internal or external systems to other systems, applications, or services.
After all, APIs allow different systems to talk to each other, share information, and work in an integrated manner.
Integration is especially important in companies that have different systems or applications, such as business management systems (ERP), customer relationship management (CRM) systems, marketing systems, e-commerce platforms, and others. In these cases, it is common for the data to be stored in different systems and applications, which can make it difficult to access and use this information.
In this way, these systems can be connected, allowing data to be exchanged in an automated manner and in real time, helping to increase efficiency, reduce costs, and improve the organization's decision-making.
In addition, API integration can also be useful for companies that want to connect their systems to third-party services, such as payment services, logistics services, data analysis services, electronic signature... Let's see a little more about this last feature.
Integrating electronic signatures with your company's solutions via API
With the evolution of technology and the growing need to work remotely, electronic signatures have become an increasingly popular and reliable option for signing documents online.
However, many companies still don't know how to integrate this feature with their website or app and, as a result, miss out on great opportunities to formalize deals. Fortunately, this can be solved with the use of an API.
In this case, the integration can be done in a variety of ways, depending on the existing system and the company's needs.
Some of the possibilities include integrating the API directly into the existing solution's user interface, creating a custom workflow that uses the API to generate and sign documents, or integrating a document management tool that already has electronic signature functionality built in.
Here at Clicksign, it is possible to integrate tools with our platform without needing advanced programming knowledge through the Zapier. Here's how simple it is to automate your workflows:
[embed] https://www.youtube.com/watch?v=LVUxthdJ7e8[/embed]
Benefits of using an API in system integration
Without a doubt, the integration of electronic signatures or others Features through an API it can bring many benefits to a company.
- Cost reduction: an API can help reduce integration costs, eliminating the need to develop custom solutions and reducing the time spent on testing and developing systems. It can also help save time and money by eliminating the need to create customized interfaces for each system.
- Improving efficiency: system integration through an API can improve company efficiency, allowing information to be exchanged quickly and without errors. It can simplify complex processes, reduce data duplication, and ensure information integrity.
- Flexibility: the use of APIs can also allow companies to adapt quickly to new technologies and market requirements. This can help them remain competitive in an ever-changing environment.
- Improving the user experience: this integration can improve the user experience, allowing systems to communicate and exchange information in a transparent manner, helping to reduce waiting times and increasing the effectiveness of support.
- Safety: finally, the use of an API can help improve data security, ensuring that information is transmitted in an encrypted and secure manner, as well as ensuring compliance with privacy laws and regulations, such as LGPD (General Data Protection Law).
If you're not already using APIs to integrate your systems, now's a good time to start considering this option.
The API economy is just the beginning
With more and more companies using APIs to share data and information with partners and customers, the API economy is constantly growing, making it an essential tool for software developers and entrepreneurs.
Broadly speaking, the API economy can be defined by the way in which organizations use APIs to improve efficiency and profitability, optimizing resources and opening new revenue opportunities through the wider digital ecosystem.
According to the report State of API Economy 2021 produced by Google, more than 90% of the companies surveyed state that APIs are essential to their digital business strategies and over 80% reported that an API culture is essential for the success of this model.
Thus, by allowing the exchange and access to a variety of open source and paid APIs that accelerate application development and remove most manual processes, they have driven digital transformation around the world.
Therefore, APIs, like all technical assets, are only as good as the results they produce - and who adopts them, when and why, are the elements that will determine your success or not.
Finally, if in addition to knowing what API is, you want to know more about how the integration of legally valid Online Document Signature can revolutionize your processes, click here and talk to an expert.
