Published on 11 October 2010
As a potential buyer of a SaaS application, one of the first considerations that come to mind is integration. How will it integrate with existing apps? How will it integrate with new apps? How can it integrate with social media? How can I import existing data? How painful will the integration be?
These issues are often undervalued by SaaS vendors and they don't realize that these can be a major roadblock to the adoption of their applications.
Some businesses prefer to buy a fully integrated suite of apps, such as NetSuite or Zoho, but many of us just want to choose and buy application by application. This is where having an open API and demonstrating integration capabilities can make or break a sale.
In simple terms, an API is a technology that enables a set of apps (or websites) to integrate with each other. In a heterogeneous application environment, APIs make things work together. As a business owner you probably don't care about APIs, but then think about the flow between CRM, billing, invoicing, tax reporting… it should be straightforward. Not always!
There are many reasons why clients want APIs and many reasons why vendors should offer them. Whether it's for enabling channel partners and integrators to glue a set of apps to respond to their clients' specific needs or for making it easier for clients to integrate a new SaaS app with their legacy applications, APIs are a must have.
APIs can also be important in case a vendor goes bust or if you simply want to change providers, as they can ensure the data export capabilities to take the data out.
As APIs facilitate the work of channel partners it can also cut the cost of acquiring new customers for SaaS vendors.
After thinking about the needs and benefits of APIs, it is amazing that many SaaS companies still don't have an open API as part of their development roadmap. Saas vendors should offer open APIs to integrate with other products and make the life of their clients easier and safer. As John Musser, founder of ProgrammableWeb.com, recently said: "Not having an API in 2010 is like not having a web site in 2001."
Vendors who already have a solid API strategy in place should seriously consider the advantages of API management tools in order to get the most out of these services.
Avid users of cloud computing are familiar with the idea of moving data and functionality from private, closed systems to shared infrastructures. Tomorrow, your apps and services will be leveraged even further by additional cloud components, social and mobile apps, in innovative ways that can add exponential value to your apps and brand. This will create new opportunities for your clients to use your services, and APIs will be the core of the next generation of SaaS businesses.
Guillaume Balas, CMO of 3scale, explains that "APIs are the glue of cloud computing. They provide new channels for SaaS businesses to empower existing and new partnerships, drive innovation, reach customers and grow new revenue opportunities".
In a fast moving and competitive market of business software, vendors must make sure that their technology is indispensable in the value chain of interconnected business apps. Otherwise someone else will "eat their lunch".
There are a handful of companies that understand the power of well-managed APIs and have developed technologies to help others launch, manage and grow their API businesses. 3scale has anticipated this market very well and has responded with an offering that helps companies such as Skype and Wine.com, as well as SaaS vendors to manage entirely their API infrastructure. Through a well-thought API strategy, they add magic sauce to APIs and provide the exposure, control and scale API needs to truly help companies grow revenue.
So if you are a business looking to buy a new SaaS solution, please do ask the vendor about their API strategy. It must be part of your evaluation list. If, as a SaaS vendor, you are lacking behind, you should add this as a top priority on your development roadmap. However, if you're already in the API game, you can greatly benefit from getting it managed more efficiently.