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Why it’s the End of the API Economy as We Know it

Since APIs became big business, companies that rely upon third-party public APIs have always been at risk. This is nothing new. Over the last decade, ProgrammableWeb has watched and reported as many of the APIs that developers rely on (i.e., Netflix, ESPN, Edmunds, Facebook, LinkedIn, Twitter, etc.) have either significantly dialed down their functionality, changed their API terms of service, or shut down altogether.

Last year saw Facebook caught up in the Cambridge Analytica scandal. Its initial response was to significantly pare back its API. By early July 2018, it further restricted some APIs by requiring an app review first.

That initial swift response by Facebook and others really caught our attention here at ProgrammableWeb. Against the backdrop of looming deadlines for compliance with Europe’s General Data Protection Regulation (GDPR), a slew of API providers either shut down or broadly thinned out many of the resources they originally made available through their public APIs. Developers, many of whom had no idea that the cuts were coming, were left in the lurch as their apps suddenly broke. Although we’re not seeing the death of the API economy, we at ProgrammableWeb are declaring it “the end of the API economy as we know it.” Or, to put it more aptly, “The end of the API economy as we often fantasize it to be.”

To be blunt, there’s a huge amount of risk that goes with providing and consuming public APIs. Since the birth of the API economy in 2005, building a business or product whose profitability wholly or partially relies on the ongoing availability of third-party APIs that you have no control over was and is a bad idea.

But, refactoring your existing IT infrastructure into more of an API-led composable enterprise and working with internal developers and specific external partners to drive significant value is an API Economy idea that still holds true promise.

In this series, we take a look at three companies that have seen first-hand the pitfalls of relying on third-party APIs. In a series of case studies, we’ll show you how PeopleLinx, Stitch, and DataSift were able to overcome the loss of access to the APIs they had built their businesses upon.