Through a well-constructed API, developers either inside or outside a company can craft a program that brings in customers, via a new application. And one well documented API will suffice for a variety of devices; that is, it can route a smartphone website visitor as well as one on a PC to the right version of the application.
Google Maps appears as part of many Web applications, thanks to the Google Maps API. Companies like Netflix and Walgreens connect to many customers over their public APIs -- basically, a complex, hierarchical set of software instructions that step a visitor up to the right connection -- and they farm out the task of hosting the API to an API management firm.
One of them, Apigee, is hosting 100 billion API calls a month in part by serving as the API management firm for six of the top 12 U.S. retailers, including Walgreens. It's also an API manager for eBay. Earlier this week it added a new wrinkle to its set of management services -- an analytics system called Apigee Insights that works with the data derived from API traffic.
[ How did Walgreens transform its photo processing business into a mobile, external-to-the-store service? Read Walgreen's Prescription For Photo Profits: Public API.]
By collecting data on what applications are being used, how they're being used and who's using them, Apigee can analyze it and offer the business that owns the API an interpretation on what that traffic tays about the business.
"This is Big Data for the app economy," said Chet Kapoor, CEO of Apigee in Palo Alto, Calif., in an interview. As API calls and responses flow through the Apigee gateway, "a lot of signals are being given out as to what else is happening in the ecosystem," he said.
Apigee Insights aggregates data from multiple sources outside the company by tracking the API traffic. Insights collects data from API access logs, the Github hosting service with its open source revision control repository, and it also extracts data on developer Web pages from Google Analytics.
Insights can tell a business from which websites its traffic is coming. It can tell what percentage of the traffic is attributable to specific mobile devices -- Android smartphones, Apple iPads or iPhones, etc. Customer profiles can be built on this origin information, then matched up with how the customer uses the internal application and what steps lead up to a browsing customer being converted into a buying customer.
Insights is a collector of "broad," unstructured data from sources outside the company, pointed out Anant Jhingran, director of data at Apigee and developer of the analytics system, in an interview. It's analysis of what traffic means is richer because of the outside information it's able to collect or deduce from the API traffic, he said.
Such external data can be correlated with internal IT systems data to see how effectively the application responded to different types of customers and where weaknesses in application performance show up.
In some cases, a company can learn a great deal by observing which APIs are most active in delivering digital assets to partners, when the owner of the assets is unclear on what the partners are doing with them. By learning more about that activity, managers can see their own company through the eyes of an outsider who has thought of ways to use existing assets in ways the owner hasn't.
The analytics service is meant to supply answers to such questions as: What is the best way to monetize APIs? What market segment should a firm address next? What drives user engagement with applications?
Jhingran said the service can be used by itself or a source of results to be feed into the enterprise data warehouse or business intelligence system.
Kapoor claimed Apigee's business grew 200% in 2012 and 30% of its customers are in the Fortune 500 or other lists of the largest companies in the world. Among those customers that Apigee is willing to identify, in addition to Walgreens and eBay, are Bechtel, AT&T, Dell, AcuWeather, Cars.com, Best Buy, Gilt Group and Equifax.
The firm is one of the largest API management companies with 300 employees, competing with other firms, such as Vordel, WSO2, Mashery, Layer 7 and 3 Scale. "With the traction we're getting, we are continuing to add people," he said. Asked about revenues, he declined to disclose any figure. Then he added, "Revenue is kicking ass."
With the growing use of mobile devices, enterprises will find they are conducting business through channels they do not own, much less control. To continue to do so successfully, they will need to monitor and understand all API information they can, Kapoor said.
Apigee Insights is available for $5,000 per month for an introductory subscription.