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Netflix goes Private: Is this the end of the Public API golden age? And is that a bad thing?

ProgrammableWeb has published a story about how Netflix is taking its API private. In the article, Patricio Robles writes that:
"Effective immediately, Netflix has stopped issuing new public API keys to developers and is no longer accepting API affiliates. It is also putting the message boards on its developer portal into read-only mode"
So what is Netflix doing instead? It is focusing on the known developers who wish to use its APIs. As the ProgrammableWeb article explains, this "small group of known developers" is what is contributing mostly to the usage of the Netflix APIs. This makes perfect sense.

But wait! Doesn't the API world revolve around Public, Open APIs? As anyone who has ever been to an API conference knows, most presentations show the famous upward-growing chart of Public, Open APIs listed in the ProgrammableWeb directory.

But there is another chart, the infamous "iceberg chart", also used at every API conference, which shows that Public, Open APIs are just the tip of the iceberg.

So if Open, Public APIs are just the tip of the iceberg, then how popular are the other types of APIs? The story quotes Netflix's own Daniel Jacobson, who write back in 2012 that:
“The potential shortcomings surface because this model assumes that a key goal of these APIs is to serve a large number of known and unknown developers,” he wrote. “The more I talk to people about APIs, however, the clearer it is that public APIs are waning in popularity and business opportunity and that the internal use case is the wave of the future.”
http://www.programmableweb.com/news/why-rest-keeps-me-night/2012/05/15 
So clearly Internal APIs are also important. But are there more types of APIs than Open/Public APIs and Internal APIs? Yes, and in fact Randy Heffner from Forrester defines four types of APIs:
  • Internal APIs
  • Partner (B2B) APIs
  • Open APIs
  • Product APIs
Public APIs fit under "Open APIs" in this taxonomy. Let's look at the other categories of APIs:

Internal APIs, as the name implies, are used inside organizations. Kin Lane has written that Internal APIs (managed in an internal SOA) are the secret of Amazon's success

Product APIs are provided by vendors, and in fact Axway's own APIs for the Axway 5 suite are a great example. Axway's APIs allow customers to, for example, provision new B2B trading partners via an API. 

Partner (B2B) APIs are used to connect businesses together. In Axway we often see banks and insurance companies connecting via Partner (B2B) APIs (insurance is often "white labled" by banks within a financial product such as a mortgage, and APIs provide the link back to the insurance provider). 

Randy presented a Webinar on API Strategies with Axway last month, which you can catch in the recording on-demand on the Axway website. The webinar had a phenomenal sign-up, showing the huge interest in API strategy. During the webinar, we asked a polling question: "What types of APIs are you using?". The answers were very interesting:



Notice how Open (Public) APIs trail both Internal APIs and Partner (B2B) APIs. At Axway, we are seeing our customers putting significant business through their APIs. Given Axway's B2B DNA, this includes significant B2B traffic which we are enabling through the new medium of REST APIs. All of these business APIs are adding a commercial edge to the API world.

So who is leading the trend towards business APIs? Let's look at two examples. Firstly, CVS Caremark:



CVS Caremark has an API - at https://developer.caremark.com - which is used for prescription lookup. So is this API intended for use by just any developer who is throwing together an app? Clearly the answer is "no". Just like the Netflix API, it's for a smaller group of known developers who have valid use cases for the API, and a business relationship with the API Provider. In fact, CVS themselves write on their API portal:
"...commercial use of the API is allowed only with prior permission. Requests for API keys intended for commercial use are reviewed by staff."
https://developer.caremark.com
Let's look at another example: Dun and Bradstreet:


The Dun and Bradstreet API is a classic example of a B2B API. It's for organizations who have a business relationship with Dun and Bradstreet to use, in order to expand their reach to mobile devices, CRM systems (including SalesForce.com) and others. Again, it's not an Open, Public API for any random developer to use.

What we are seeing with Netflix, CVS Caremark, and Dun and Bradstreet is the API Economy growing up. We are no longer fixated over Open, Public APIs. Instead, we see that Internal APIs, Partner (B2B) APIs, and Product APIs are equally (if not more) important. Think that the initial API gold rush was big? Now that APIs mean business, the real API gold rush is just beginning. 

Read the original blog entry...

More Stories By Mark O'Neill

Mark O'Neill is VP Innovation at Axway - API and Identity. Previously he was CTO and co-founder at Vordel, which was acquired by Axway. A regular speaker at industry conferences and a contributor to SOA World Magazine and Cloud Computing Journal, Mark holds a degree in mathematics and psychology from Trinity College Dublin and graduate qualifications in neural network programming from Oxford University.