Over the course of the last five years we have seen increased innovation in the area of the application programming interface (API), particularly in terms of functionality within software. This has resulted in the rise of many third-party API companies that has led to a change in how software is both created and introduced to the marketplace.
Of course, APIs have been crucial in software development as a means to develop for specific platforms for many years, with organisations like Microsoft offering APIs that essentially make developers dependent on the interfaces if they wish to release software via such platforms.
However, in more recent times a new wave of APIs developed by third parties are reducing this dependency, making it easier for developers to bring their products to the market in the process. This has resulted in the traditional API model slowly giving way to more modular variations that rely on smaller microservices that can be integrated into complex software easily, allowing developers to place more focus on offering less restricted functionality while surrounding their offerings with functional processes that have been created by other developers through the use of these more open APIs.
The time spent on creating functionality within an app is often time wasted in the modern environment, which has led many companies to make use of APIs from third-party developers and larger platforms to expedite the process.
This has led to a boom period for APIs, with websites like ProgrammableWeb being able to offer access to more than 15,500 APIs that can be incorporated into projects by developers. In most cases, these APIs allow for software to be brought to market quicker, which is beneficial both to developers and users.
Such APIs also offer a range of benefits, including lower costs, faster development and the fact that they are often simply better than the APIs that developers may create for themselves. Furthermore specialised third-party API developers often have access to larger data sets that allow for more comprehensive APIs to be developed and the creation of a network effect.
This increased access to data can manifest as benefits in a number of ways, such as the ability to curate retail transactions across hundreds, or even thousands, of different retailers, which can be used in the development of a wide range of software.
The Evolution of the Software Company
This shift towards API development has led to the evolution of software companies that are now releasing software as APIs, thus allowing them to offer a number of adoption routes. It allows for the creation of a scalable sales model due to the fact that the customer is often also the developer, leading to increased sales as customers’ usage of the API increases.
This is a trend that has not gone ignored by large companies. The likes of Salesforce and eBay have adopted API development to the point where this software now accounts for half, or more, of the revenue that they develop. This, in essence, alters the product offered by such companies from application to platform.
This model is also attracting enormous interest for entrepreneurs and investors, as developers are often more focused on creating APIs that offer tools to other developers, thus creating a more scalable source of revenue than trying to create the latest must-have app from scratch would.
Assuming the model is successful, developing APIs allows for efficient scaling and the development of networks that can be leveraged in a number of fashions.
A Shift in the Value Chain
The increasing popularity of APIs has led to an evolution in the value chain whereby the most successful companies are those that can bring together as much data as possible and make it accessible to others, which is a marked shift away from the previous model that saw the most successful companies aggregating this data and staying close to it, while imposing restrictions on those who may aim to use it.
It is likely that this proliferation of APIs and the popularity surrounding this model is only going to increase, especially as interest in microservices, big data and artificial intelligence grows stronger.
Furthermore, third-party APIs are increasingly being embraced within enterprise software development, which is likely going to result in the emergence of a number of large companies in the coming years that are more dedicated to this model.
In essence, the rise of the API has created a more attractive and efficient environment for developers, while also allowing for the creation of unique functionality within apps that can benefit users and the delivery of products.
Did you know that Uber has a value of over $50 billion? Or that the value of ordering food online has vastly surpassed ordering via talking on the phone?
Consumers are becoming more and more accustomed to simply and quickly accessing services and products on their phone, whether it’s to order food, accommodation, movies and more.
Companies such as Uber, Netflix, Postmates and Instacart to name just a few, are the movers and shakers who are creating this new paradigm that is literally re-wiring how consumers are thinking and choosing to buy.
Along with the likes of Uber and Amazon’s ‘Dash’ buttons and a plethora of other on-demand apps, this new economy is turning consumers into on-demanders, who are becoming increasingly impatient to wait for the time it takes to process traditional services.
What Exactly Is “Uberification?”
More and more services are adapting in order to satisfy customers who demand that their needs be met instantly and with an excellent degree of customer service.
With these new developments consumer impatience has risen to an all time high. Web performance company Akami Technologies Inc discovered that if a website is slow to load 50% of consumers would try a different site to complete their task and 22% admitted they wouldn’t return to the original site in future.
If your company website is too slow to load, or your ordering, or checkout process takes too long, you may be losing far more customers than you might think. This is only going to be exacerbated as this new, on-demand consumer psychology becomes increasingly prevalent.
Traditional, ‘brick and mortar’ companies, may meet this concept with some resistance, but it is quite obvious that this change is heralding a mammoth opportunity for companies to create innovations that accommodate this shift in the behaviour and expectations of consumers, which also provides an exciting opportunity for business growth.
Adapting To This New Consumer Psychology
This paradigm shift has led to a number of interesting developments, particularly in terms of partnerships between brands and service-based companies who provide their services on-demand. As an example, LiquidSpace, an online platform who rents out unused meeting rooms and enables clients to book workspaces by the hour, has partnered with the Marriott hotel chain.
Within the same sector, there is an increasing growth of concierge apps. Hotel Tonight is one company who recently introduced a concierge app and they also offer large discounts for last-minute bookings. This new service is extremely simple and straightforward, omitting the need to scroll through reams of choices and comparisons. It’s their promise that a boking can be made with only three taps and one swipe on a user’s phone screen.
Creating A More Efficient User Experience
Adapting your company to accommodate this new on-demand attitude is not about fancy gimmicks, but about creating a user experience that is smooth, time-efficient and straightforward.
With a little creativity and perhaps a potential willingness to partner with an affiliate company, any business can adapt to this new on-demand user psychology.
The most forward-thinking and successful companies are not simply waiting for issues to arise in order to invent creative solutions. Luxe is a valet parking company with a loyal client base, who takes customer service a step further by automatically informing customers if they expect an increase in traffic, so customers can prepare themselves for potential delays.
HBO launched HBO GO, after recognising a decrease in the number of customers who watched timetabled programs as they air; instead choosing to record shows on DVRs to watch later. Following this, they observed how their customers were utilising the new service; they discovered that a high proportion of their subscribers tended to watch their programs on mobile devices during a commute, or while on holiday. That led them to develop HBO NOW.
The brands that are most successful are the brands that put customer experience at the forefront of their mission. It’s vital that companies observe how consumers experience their products. Customers have the tools – literally- at hand to compare services all of the time and with the continued increase of ‘on-demand’ services, they are creating a new ‘on-demand’ economy.
Is your business ready?