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In our article An Intro to APIs: What Are They & What Do They Do? we covered the basics of API technology from what assets are, how developers use them, and how businesses can benefit from the innovation they provide. But there’s another big part to the API story that can affect everything from the types of assets being shared, with whom, and to what end: Public APIs and private APIs. In this article, we’ll talk about a few of the differences between the two.

Two Types of APIs with Two Very Different Value Chains

A public API is probably what first comes to mind when you think about APIs: the Twitter API, Facebook API, Google Maps API, and more. But these are only a small portion of the APIs that exist around the web. While you may not hear much about them, private APIs are far more common (and possibly even more beneficial, from a business standpoint). Public APIs are much more restricted in the assets they share, given they’re sharing them publicly with developers around the web. Private APIs are all about productivity, partnerships, and facilitating service-oriented architectures.

Let’s dig a little deeper into how each is used.

Private APIs: The Self-Service Developer & Partner Portal

Private APIs are revolutionizing how things get done within companies. By providing an open architecture, private APIs give developers an easy way to plug right into back-end systems, data, and software, letting engineering teams do their jobs in less time, with fewer resources. It’s like a self-service user experience for internal developers.

A private API can save time and resources, streamline collaboration, and give developers unfettered access to everything they need. More companies see value in “consuming their own APIs.” In fact, of the billions of API calls made, around two-thirds of those calls are companies making calls to their own APIs.

Private APIs can also reduce operating costs, eliminating the need for layers of web services, back-end applications, and server resources. On the partnership front, versions of private API can be customized for partners, enabling faster technical integrations.

Takeaway: Companies primarily use private APIs to improve agility, flexibility, and velocity. This often translates to remaining competitive, higher productivity, and improved efficiencies.

Things you can do with a private API:

  • Build internal apps for company use around a microservices model
  • Build customer-facing apps with internal assets
  • Create a shared pool of data and assets that allows teams to collaborate faster and easier
  • Strengthen partnerships, allow potential partners to test out integrations, and streamline technical integrations
  • Streamline inbound and outbound marketing data collection, simplifying layered technology stacks via APIs

Reasons private APIs are great:

  • Self-service style access to data and software gives teams greater agility, and creates a less siloed environment
  • Rapid and scalable development fuels innovation (because there’s less need to build things from scratch)
  • Faster mobile development
  • Simplification of IT infrastructures
  • They facilitate better business development because partners can easily integrate

Example of a Private API

Upwork client Home-Cost developed proprietary software that delivers fast, easy, accurate, and guaranteed estimates for new home construction with its Home-Cost “calculator.” Builders, architects and consumers can quickly see if the house plans they’ve created are within their budget and can tailor plans to be more affordable before even breaking ground.

To connect directly with its customer base, Home-Cost partners with house plan companies and provides a private API that is customized for each partner—a behind-the-scenes way for the software to interface with external databases on demand.

Public APIs: Granting Outside Access to Your Assets

Open APIs are all about letting the outside world in. They provide a set of instructions and standards for accessing the information and services being shared, making it possible for external developers to build an application around those assets. This entire concept (and APIs in general) is somewhat borrowed from the idea of open-source software: create it, open it up to users, then let them run with it.

Some public APIs are even growing faster than original lines of business. Companies like Salesforce are seeing business through their APIs outpacing their original focus, reportedly generating 50 percent of their revenues through APIs.

Things you can do with a public API:

  • Publicly share your assets with anyone you want
  • Make software solutions you’ve created “open source”
  • Create a seamless flow of data to and between devices
  • Forge new partnerships and integrations
  • Get information and analytics about audience, users, and traffic

Reasons why public APIs are great:

  • They encourage experimentation among developers. Devs can focus on their own unique app functionality and surround it with fully functional, distributed processes developed by others, accessed through APIs
  • They make it easy to promote and extend your brand
  • They offer a streamlined alternative to interacting with your back-end system
  • You’re contributing to the API economy, not just extracting value from it

Examples of Public APIs

Twilio is an excellent example of how apps can improve their functionality by utilizing a software solution through an API. Twilio offers calling and text messaging functionality, enabling apps like Uber, OpenTable, Airbnb, and eHarmony to give users real-time, SMS text updates to their phones.

eBay was one of the early public API pioneers. They’ve since built a series of APIs on top of their core API, for both the buying and selling sides of the business. These APIs give high-volume sellers an easier way to list items in bulk, schedule listings, handle accounting, shipping, and more. On the consumer side, eBay’s APIs make their mobile app a rich, interactive tool, allowing users to check listings on the go, get updates to their mobile phones, and more.

YouTube’s API is all about enabling other apps to have embedded videos and video players. The API also grants in-app access (and playback controls) to the millions of videos on the site.

Ready to Fuel Greater Flexibility with an API?

In the free ebook The API Economy, you’ll learn how APIs—both private and public—are like the connective tissue that links businesses, applications, data, and devices. They offer unprecedented flexibility to the way we develop software, build applications, share data, and even in how we engineer IT infrastructures. Ready to harness the power of an API for your business or application? Download the ebook today.

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