Introduction

As organizations make the move toward the cloud, they are increasingly shifting away from monolithic applications to a distributed, microservices-based architecture. A vital component of this architecture is a web of APIs that connect data from one system to another, both within and outside the organization’s application and infrastructure landscape; a downside of this approach is the proliferation of APIs. The solution is to bring a strategic approach to the management, administration, use, reuse, and governance of APIs, with the ultimate objective of building a synergy between the technology layer and the overarching business strategy that drives the organization.

The need for API gateways in a modern organization

API gateways are basically tools that connect front-end applications with a catalogue of backend services. They help organizations manage a common set of tasks that are needed in the use of API services, such as authentication, security management, lifecycle management, and usage management.

There are three main drivers for the need of API gateways in a modern technology-based organization:

1. As the number of APIs multiplies, so does the complexity that arises. This complexity can come in many forms, e.g., a lack of end-to-end connection visibility that makes applications function, the inability to monitor the movement of data from one point to another, and knowing who is calling what API services.
2. Ensuring end-point security and point-to-point security is implemented in a consistent way to protect organizations from a range of cyberattacks, such as SQL inject, DDoS attacks, etc. API gateways strategy can help organizations realize a trustless security paradigm for the entire technology layer.
3. Most organizations are becoming more like the top tech companies of today, which are based on a “service-oriented” approach that may involve many partners to enable value for a customer, and where this value needs to be partitioned amongst the partners in an equitable way.

API gateways are the answer to these challenges and have become an organizational need-to-have rather than a nice-to-have.

Business benefits of API gateways

The benefits of API gateways include:

1. Improved governance: API gateways enable businesses to make their internal and external APIs discoverable through a comprehensive catalogue of services, ensuring that the developers do not spend time on building APIs with similar functionalities. Moreover, a centralized funding and a data-domain approach can orient the organization’s technology spend toward high priority needs that generate greater value.
2. Better security: API gateways make visible the APIs being used in the application landscape. In addition, they also help the development teams ensure that the basics are being taken care of, such as the implementation of role-based access controls (RBAC) or verifying that encryption, masking and key validation routines are in place. Also, a birds-eye view on API services’ calls and transaction logs helps fight DDoS and malware attacks.
3. Usage monitoring and monetization of APIs: API gateways can help businesses control the use of APIs to differentiate service levels as part of a range of offerings, leading to commercialization of the APIs – including models such as freemium – and monetization of the organization’s efforts. Organizations can realize subscription-based billing, monitor the usage and implement a limit to call-backs, bring tiered usage policies into the market, and build revenue sharing models in collaboration with developers.
4. Compliance benefits: By making use of API gateways, organizations can build applications that can be compliant with multiple and disparate standards in various areas of operation. This is a result of the ability to observe and log transactions that demonstrate proof of operations, and proactively facilitating an interface between DevOps teams when things go off-track.
5. Use-case development: API gateways are an enabler of innovation. For instance, they can help organizations implement open banking standards, integrate with other partners in the ecosystem, and bring cohesion by achieving interoperability between digital systems within the organization’s perimeters. For instance, in the financial services industry, organizations can seamlessly connect multiple products to card services like VISA and MasterCard, integrate their financial services with others, use third party marketplaces to set embedded finance and insurance models into motion, and connect to core banking infrastructures like Swift.

So what is the right approach to building one, and do businesses need a one-off effort or an incremental approach to bring their API gateway to existence?

What is the right approach to building an #APIGateway and do businesses need a one-off effort or an incremental approach? Read on to know more.

A future roadmap for your API gateway

API gateway implementations are an ongoing initiative that must progress in sync with the larger business vision. However, there is a tried and tested maturity model that helps businesses realize value fast, and at scale. Here are the four stages of this maturity model that should define a roadmap for the future of API gateway within an organization:

1. Laying the foundations: This stage is marked by the presence of a catalogue that exhaustively lists all the APIs that are being used. Governance routines have been defined, and a few key metrics have been implemented.
2. Building the controls: This stage is defined by the presence of API architectural blueprints from a data perspective, and the implementation of the governance processes that had been defined in the previous stage.
3. Industrializing the ecosystem: Next comes the implementation of billing and metering functionalities, monetization of the API catalogue, and the creation of various products with different pricing and usage characteristics. Automated testing, document generation, and operational monitoring have been implemented too.
4. Futuristic visions: Once the API services ecosystem has been established, organizations can proceed to build next-generation features like live traffic analysis, analytics tools, and the ability to deliver different SLAs to multiple cohorts of clients with their own business needs.

Operating along this maturity model can help a firm streamline their technology layer to their own business needs and emerge as a leader in their industry.

Conclusion

As the complexity associated with business technology increases, so does the effort of doing business digitally. API gateway implementations are critical to aligning the business goals of the organization with its technological goals, and bringing resonance to digital operations. Implementing such systems will also, inevitably, call for a technology partner that can not only deliver targeted results, but bring their own experiences with other, similar clients. CIOs must act now, and kickstart the move toward digital excellence by making use of API gateways that help businesses move along a technological progression rather than a mere swing through the motions.