June 17, 2021

A Simple API Definition and How APIs Work

You’re finally ready to take that much-needed vacation. You log into an online travel service and it immediately presents multiple flights you can choose as well as hotel and car rental options. You see the package you like, pay with your credit card, and in just a few minutes, you booked all your plans. You even have links to excursion options you can add on later.

All this fast activity that turns you into a travel-planning wizard was made possible by Application Programming Interfaces (APIs). As you worked your way through the online processes, you interacted seamlessly with various applications, including your browser and website forms. You also connected with data pulled from external applications, which in this case were databases hosted by airlines, hotels, and car rental companies. Then there’s the link with your credit card company so you can pay the fees.

As you moved nimbly from one step to the next, you likely did not realize you were interfacing with multiple applications. That’s because APIs took care of all the integration for you in the background.

In this article, we dive into the details about APIs, including a definition of an API and an explanation of how APIs play such a crucial role in enabling applications to communicate with each other. These vital exchanges take place not only among websites and internal applications used to run daily business operations, but also when business partners need to exchange information with each other via integrated applications.

What Is the Definition of an API?

An API is a piece of software within a system that defines how other components or systems can use that system. The API defines the types of requests that can be made, how to make them, and the data formats that must be used. As the acronym suggests, an API consists of three components:

  • Application refers to the primary service you access, whether it’s a website application, a spreadsheet, a mobile app, a kiosk, or your company’s internal ERP application. The application lets you access information and input data to complete a specified task. For an application to execute transactions, it needs to interface with you and other applications it relies on to run certain functions and grab the required data—such as a back-end database.
  • Programming refers to the software code that allows the service you are using to communicate with you and other applications. The code translates your requests into a language that other applications can understand so they can fulfill the request—for example, asking an ATM to withdraw cash. The ATM uses the API code to check with the bank database to make sure you have sufficient funds.
  • Interface is the view you see when you interact with the main application. This could be a set of fields into which you key data, or it could be a touchscreen or a keypad. It could also be the chip reader on a credit card processing device or a barcode scanner. All these graphical user interfaces enable you to communicate with applications.

What Are the API Types?

A key attribute of APIs is their ability to enable developers to accelerate software development. They achieve this by simplifying the code required to add functionality to an application or to build applications by using services provided by a third-party application.

Developers typically work with three main API types:

Private APIs

Private APIs are for use within an organization. They integrate the IT systems that run the business with customer-facing applications that allow customers to interact with the business, as when purchasing products or requesting service.

Partner APIs

Businesses that integrate software connections to exchange data can set up shared Partner APIs. An example is a hospital and an insurance company, which integrate their systems in order to process claims.

Public APIs

Public APIs are part of the “API economy” and expose an organization’s digital services in a controlled way. They are made available to third-party developers (sometimes for free, sometimes for a subscription fee) to allow them to tap into the data or functions that an application provides. The application owner may offer access to open portions of an application for use by other organizations in cases where the access benefits both parties.

With all of these APIs, there is no source code that developers have to worry about. They simply connect their application through the API to leverage the data or a function of that application. APIs thus serve as an abstraction layer between two systems.


A Business Leader’s Guide to APIs

How Do APIs Work?

Application programming interfaces consist of technical specifications pertaining to data exchange options between applications. The applications communicate through a user interface, following a process where the application that needs the functionality of the other application calls that application’s API and specifies how the functionality should be provided. Assuming the request is authorized, the target application receiving the request returns the requested functionality.

As specialists from Red Hat note, APIs are sometimes considered contracts. The documentation is essentially an “If-Then Agreement” between two applications: “If Application A sends a request structured in a specified way, then this is how Application B will respond.”

An API’s documentation also includes information on how to work with the API and the function calls that request application actions. These can include, for example, requests to start or finish a data exchange session, or to store or retrieve an object from a server.

How Are APIs Used?

Another way to view APIs is according to their use-cases. Web APIs are the most common use-case and provide readable data and functionality among web-based systems and application servers. These APIs typically use the Hypertext Transfer Protocol (HTTP) and make it possible for any desktop or mobile device to tap into a web application.

Another use-case is Database APIs, which enable applications to query databases and pull data, run standard reports, and create custom reports. Operating System APIs tell applications how to use the resources and services of operating systems. For example, these APIs make it possible for applications to run quickly by accessing RAM and saving files to hard drives. Additionally, there are Remote APIs, which enable one device to access application functions running on another machine.

What Standards Do APIs Follow?

A key attribute of APIs is their ability to standardize data exchanges among diverse systems and hardware platforms. These exchanges are made possible by a common set of API protocols accepted as standards by the software developer community:

  • Remote Procedure Call (RPC) specifies client-server interactions.
  • Service Object Access Protocol (SOAP) contains syntax rules for requests and responses.
  • Extensible Markup Language (XML) defines rules for encoding documents.
  • Representational State Transfer (REST API) sets constraints for creating web services and providing system interoperability.
  • Web Services Description Language (WSDL) describes network services and procedure information.
    GraphQL queries data and manipulates the language that fulfills the query requests with data.

Universal Description, Discovery and Integration (UDDI) plays a unique role. It enables businesses to list themselves in a registry on the Internet and find other businesses to set up e-commerce interoperability.

The Business Value of APIs

In addition to making it easier for applications to talk to each other so end users can work more efficiently and customers can place orders more quickly, APIs enable businesses to tap into advanced technologies that add value to the business. These include the Internet of Things (IoT), artificial intelligence, robotics, workflow automation, mobility and social media. Whether they’re gathering business intelligence to run more efficient business operations or communicating key information to customers, APIs make all businesses run more smoothly.

APIs are a vital component of the products we build at 3Pillar Global. Whether you are struggling with your current APIs, or planning an API strategy, be sure to download the Business Leader's Guide to APIs. To learn how we can help your product development efforts, contact an expert today.

Read More Insights on Platform Modernization

This growing series of posts gives business leaders an excellent view of the modernization process from beginning to end.