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value.</div></div></div><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--align-left mdc-c-link-container--display-column___X0HDD_2734c4f mdc-u-grid-gutter-sm"><a data-component="mdc-c-link" href="#" class="mdc-c-link-icon___SEKyg_2734c4f" role="button" aria-label="Share on linkedin" data-layer-event-prefix="CTA Link" data-layer-action="click" data-layer-category="share" data-layer-subcategory="social" data-layer-subcategory2="linkedin" data-layer-text="Share on LinkedIn"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mdc-c-icon--radial___y3csX_2734c4f mdc-c-icon--size-xl___3BEee_2734c4f mck-linkedin-thin-icon"></span></a><a data-component="mdc-c-link" href="#" class="mdc-c-link-icon___SEKyg_2734c4f" role="button" aria-label="Tweet on X" data-layer-event-prefix="CTA Link" data-layer-action="click" data-layer-category="share" data-layer-subcategory="social" data-layer-subcategory2="twitter" 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data-component="mdc-c-background-image" class="mdc-c-bg-image___GJdv1_2734c4f background-image-default-blog"></div></div></div></div></div><div class="mck-o-container"><div class="mck-o-container--wrapped mck-o-container--mobile-spacing mdc-u-grid mdc-u-grid-gutter-xxl"><div class="mdc-u-grid mdc-u-grid-col-1 mdc-u-grid-col-md-12 mdc-u-grid-gutter-xxl"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_2734c4f mdc-u-grid-gutter-xxl BlogEntryContent_mck-c-blog-entry-content__authors-and-tags-wrapper__xvLOB"></div><div class="mdc-o-content-body"><p><span class="BlogEntryContent_mck-c-blog-entry-content__display-date__vCR9M"><time dateTime="2021-07-30T00:00:00Z">July 30, 2021</time></span><em>By <a href="/our-people/sven-blumberg">Sven Blumberg</a>, Timo Mauerhoefer, Chandrasekhar Panda, and <a href="/our-people/henning-soller">Henning Soller</a></em></p> <p>APIs have proliferated in numerous industries, becoming a critical interface for connecting systems and data. In the process, APIs are instrumental in the development of solutions across diverse areas such as geospatial positioning, the integration and information exchange of industrial machines, and web and mobile apps. Thanks to this ubiquity, many IT leaders regard APIs as not just a means of communication but also a channel of their own.</p> <p>As with every new channel, companies must identify best practices and unique selling propositions. Indeed, in many cases APIs have become victims of the <a href="/capabilities/mckinsey-digital/our-insights/ten-antipatterns-that-are-derailing-technology-transformations">typical antipatterns of technology</a>—such as being chosen out of context.</p> <p>Within the world of APIs, a few myths have taken hold. IT leaders must separate fact from fiction to make the right strategic choices. Typically, we see companies offer as many APIs as possible to the outside world in an effort to monetize APIs on their own. However, we also see that true leaders in this space use APIs more broadly and are more selective in their offerings (exhibit).</p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-inline-module-container mck-o-md-center"><div class="mdc-u-grid mdc-u-grid-gutter-lg mdc-u-grid-col-sm-1 mdc-u-grid--align-start mdc-u-mb-3 GenericItem_mck-c-generic-item__sGwKL"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_2734c4f mdc-u-grid-gutter-xs GenericItem_mck-c-generic-item__content__gq1m0"><div class="mck-c-eyebrow mdc-u-ts-10"><span> </span></div></div></div><div class="mck-u-inline-module-border-top mck-u-inline-module-border-bottom"><picture data-component="mdc-c-picture" class="Exhibit_mck-c-exhibit__image__pyIDm"><source media="(min-width: 768px)" srcSet="/~/media/mckinsey/business%20functions/mckinsey%20digital/tech%20forward%20blog/the%20right%20apis%20identifying%20antipatterns%20of%20api%20usage/svg-the-right-apis-exhibit-v2.svgz?cq=50&cpy=Center"/><img alt="By being more strategic with their API offerings, companies can generate more value for both customers and their organization." src="/~/media/mckinsey/business%20functions/mckinsey%20digital/tech%20forward%20blog/the%20right%20apis%20identifying%20antipatterns%20of%20api%20usage/svg-the-right-apis-exhibit-v2.svgz?cq=50&cpy=Center" loading="lazy"/></picture></div><div class="mck-u-sr-only"></div></div> <h2>Common myths about APIs</h2> <p>Because each myth has its own truths and traditions, we’ll discuss them one by one.</p> <h3>1. Open APIs are better than internal APIs</h3> <p>When open APIs were introduced, many people assumed that increasing the pool of possible app developers would be beneficial. In our experience, the opposite is true: open APIs carry the risk of providing an unwanted interface to outsiders who are either developing a new customer front end for a service provided by your back end or even taking malicious actions. IT leaders must carefully evaluate whether each API provides a service to the outside world that could undermine their company’s customer interface and thereby erode a competitive edge. Similarly, APIs should be evaluated for the potential risks of providing such functionality to external parties.</p> <h3>2. More open APIs are always better</h3> <p>Similarly, we have seen numerous companies measure their success by the number of open APIs online. Such an approach has proven to be very dangerous because it offers the possibility for other entities to provide core functionality and services without ever touching a company’s core customer interface—essentially diverting customers before they engage with the company that is offering the underlying services. Similarly, providing open APIs that are not used or not usable also leads to additional cost because IT has to ensure compatibility and handle maintenance.</p> <h3>3. More APIs are always better</h3> <p>We have often seen statements such as “If some APIs make us strong, more APIs make us stronger.” Despite the fact that APIs provide a standardized integration pattern, the massive proliferation of APIs is as disadvantageous as the growth of web services and even point-to-point interfaces in legacy architectures. To support agile development and facilitate testing of implemented applications, companies need to limit complexity and the total number of interfaces. Therefore, minimizing the number of APIs and optimizing their use are much more important than creating a multitude of them.</p> <h3>4. APIs don’t need any branding</h3> <p>APIs often don’t have a brand, making one geoposition API as good as another, assuming the output is the same. However, an offering can indeed be more personalized—for example, through branding an API’s navigation or payment specifically when it is integrated into a broader application. Attaching your APIs to products, apps, and services that are considered valuable and advanced will also increase your brand value, and vice versa.</p> <h3>5. APIs should be commercialized on their own</h3> <p>The first commercialization options for APIs were based on the fact that their individual usage could be commercialized (for example, paying <em>x</em> cents per usage of a geoposition API). In many cases, we have seen that such simple monetization is not fulfilling an API’s primary purpose—particularly when it comes to increasing sales. In most cases, the potential brand recognition and sales of products and services are much more valuable than the commercialization of an individual API.</p> <h3>6. APIs just need to be offered</h3> <p>Observers often hypothesized that the use of APIs is all about supply: once the business recognizes the value an API could generate, developers will then figure out a way to integrate the functionality into the existing landscape. In reality, the presentation and usability of APIs are big differentiators in the market. The creation of an API portal is essential to enable the users of the APIs (the third-party developers) to harness them easily.</p> <h2>Key learnings</h2> <p>These antipatterns show that developing an effective API strategy requires companies to navigate numerous pitfalls. Developing the right set of APIs, both open and internal, is not easy. Typically, the development of a clear future state of to-be-provided APIs, along with a road map, is helpful to ensure reusability and rationalization from the start. Clear guiding principles should be employed when designing the target picture of the APIs:</p> <ul> <li>All open APIs should be assessed by their risk of exposure and the possibility of circumventing the customer front end.</li> <li>Possibilities for cobranding open APIs should be explored.</li> <li>APIs should never be channel specific.</li> <li>APIs should pave the way for more business rather than being monetized on their own.</li> <li>The number of both open and internal APIs should be minimized while optimizing for reusability.</li> </ul> <p>Following these principles in the design of the future state can help avoid challenges later.</p> <p>Still, this planning exercise requires time and is often overlooked because of the sheer complexity of the existing interface landscape. Companies that take this time at the outset will be able to drastically reduce their number of APIs.</p> <p><strong><a href="/our-people/sven-blumberg">Sven Blumberg</a></strong> is a senior partner in McKinsey’s Istanbul office; <strong>Timo Mauerhoefer</strong> is an associate partner in the Frankfurt office, where <strong><a href="/our-people/henning-soller">Henning Soller</a></strong> is a partner; and <strong>Chandrasekhar Panda</strong> is a senior expert in the Abu Dhabi office.</p></div></div><aside class="mdc-u-grid-col-lg-start-11 mdc-u-grid-col-lg-span-2 BlogEntryContent_mck-c-blog-entry-content__side-bar__YsMpJ"></aside></div></div></div></div></div></div></main></div><script id="__NEXT_DATA__" type="application/json">{"props":{"pageProps":{"locale":"en","dictionary":{},"sitecoreContext":{"route":{"name":"The right APIs Identifying antipatterns of API usage","displayName":"The right APIs Identifying antipatterns of API usage","fields":null,"databaseName":"web","deviceId":"fe5d7fdf-89c0-4d99-9aa3-b5fbd009c9f3","itemId":"aca5f2b0-7105-4f44-942e-14aff7936a25","itemLanguage":"en","itemVersion":1,"layoutId":"ae753eb4-a035-40b4-83bf-4b4438df6742","templateId":"d929136a-019a-4786-8072-3e3a60b2f31c","templateName":"Blog Entry","placeholders":{"jss-main":[{"uid":"e18e4703-f541-45d8-89c1-d5d8407f1708","componentName":"BlogEntry","dataSource":"","fields":{"data":{"blogEntry":{"title":{"jsonValue":{"value":"The right APIs: Identifying antipatterns of API usage"}},"sEOTitle":{"value":""},"description":{"jsonValue":{"value":"Six common myths act as obstacles for companies looking to generate more value."}},"sEODescription":{"value":""},"displayDate":{"jsonValue":{"value":"2021-07-30T00:00:00Z"}},"body":{"value":"\u003cp\u003e\u003cem\u003eBy \u003ca href=\"/our-people/sven-blumberg\"\u003eSven Blumberg\u003c/a\u003e, Timo Mauerhoefer, Chandrasekhar Panda, and \u003ca href=\"/our-people/henning-soller\"\u003eHenning Soller\u003c/a\u003e\u003c/em\u003e\u003c/p\u003e\n\u003cp\u003eAPIs have proliferated in numerous industries, becoming a critical interface for connecting systems and data. In the process, APIs are instrumental in the development of solutions across diverse areas such as geospatial positioning, the integration and information exchange of industrial machines, and web and mobile apps. Thanks to this ubiquity, many IT leaders regard APIs as not just a means of communication but also a channel of their own.\u003c/p\u003e\n\u003cp\u003eAs with every new channel, companies must identify best practices and unique selling propositions. Indeed, in many cases APIs have become victims of the \u003ca href=\"/capabilities/mckinsey-digital/our-insights/ten-antipatterns-that-are-derailing-technology-transformations\"\u003etypical antipatterns of technology\u003c/a\u003e\u0026mdash;such as being chosen out of context.\u003c/p\u003e\n\u003cp\u003eWithin the world of APIs, a few myths have taken hold. IT leaders must separate fact from fiction to make the right strategic choices. Typically, we see companies offer as many APIs as possible to the outside world in an effort to monetize APIs on their own. However, we also see that true leaders in this space use APIs more broadly and are more selective in their offerings (exhibit).\u003c/p\u003e\n[[exhibit 1]]\n\u003ch2\u003eCommon myths about APIs\u003c/h2\u003e\n\u003cp\u003eBecause each myth has its own truths and traditions, we\u0026rsquo;ll discuss them one by one.\u003c/p\u003e\n\u003ch3\u003e1. Open APIs are better than internal APIs\u003c/h3\u003e\n\u003cp\u003eWhen open APIs were introduced, many people assumed that increasing the pool of possible app developers would be beneficial. In our experience, the opposite is true: open APIs carry the risk of providing an unwanted interface to outsiders who are either developing a new customer front end for a service provided by your back end or even taking malicious actions. IT leaders must carefully evaluate whether each API provides a service to the outside world that could undermine their company\u0026rsquo;s customer interface and thereby erode a competitive edge. Similarly, APIs should be evaluated for the potential risks of providing such functionality to external parties.\u003c/p\u003e\n\u003ch3\u003e2. More open APIs are always better\u003c/h3\u003e\n\u003cp\u003eSimilarly, we have seen numerous companies measure their success by the number of open APIs online. Such an approach has proven to be very dangerous because it offers the possibility for other entities to provide core functionality and services without ever touching a company\u0026rsquo;s core customer interface\u0026mdash;essentially diverting customers before they engage with the company that is offering the underlying services. Similarly, providing open APIs that are not used or not usable also leads to additional cost because IT has to ensure compatibility and handle maintenance.\u003c/p\u003e\n\u003ch3\u003e3. More APIs are always better\u003c/h3\u003e\n\u003cp\u003eWe have often seen statements such as \u0026ldquo;If some APIs make us strong, more APIs make us stronger.\u0026rdquo; Despite the fact that APIs provide a standardized integration pattern, the massive proliferation of APIs is as disadvantageous as the growth of web services and even point-to-point interfaces in legacy architectures. To support agile development and facilitate testing of implemented applications, companies need to limit complexity and the total number of interfaces. Therefore, minimizing the number of APIs and optimizing their use are much more important than creating a multitude of them.\u003c/p\u003e\n\u003ch3\u003e4. APIs don\u0026rsquo;t need any branding\u003c/h3\u003e\n\u003cp\u003eAPIs often don\u0026rsquo;t have a brand, making one geoposition API as good as another, assuming the output is the same. However, an offering can indeed be more personalized\u0026mdash;for example, through branding an API\u0026rsquo;s navigation or payment specifically when it is integrated into a broader application. Attaching your APIs to products, apps, and services that are considered valuable and advanced will also increase your brand value, and vice versa.\u003c/p\u003e\n\u003ch3\u003e5. APIs should be commercialized on their own\u003c/h3\u003e\n\u003cp\u003eThe first commercialization options for APIs were based on the fact that their individual usage could be commercialized (for example, paying \u003cem\u003ex\u003c/em\u003e cents per usage of a geoposition API). In many cases, we have seen that such simple monetization is not fulfilling an API\u0026rsquo;s primary purpose\u0026mdash;particularly when it comes to increasing sales. In most cases, the potential brand recognition and sales of products and services are much more valuable than the commercialization of an individual API.\u003c/p\u003e\n\u003ch3\u003e6. APIs just need to be offered\u003c/h3\u003e\n\u003cp\u003eObservers often hypothesized that the use of APIs is all about supply: once the business recognizes the value an API could generate, developers will then figure out a way to integrate the functionality into the existing landscape. In reality, the presentation and usability of APIs are big differentiators in the market. The creation of an API portal is essential to enable the users of the APIs (the third-party developers) to harness them easily.\u003c/p\u003e\n\u003ch2\u003eKey learnings\u003c/h2\u003e\n\u003cp\u003eThese antipatterns show that developing an effective API strategy requires companies to navigate numerous pitfalls. Developing the right set of APIs, both open and internal, is not easy. Typically, the development of a clear future state of to-be-provided APIs, along with a road map, is helpful to ensure reusability and rationalization from the start. Clear guiding principles should be employed when designing the target picture of the APIs:\u003c/p\u003e\n\u003cul\u003e\n \u003cli\u003eAll open APIs should be assessed by their risk of exposure and the possibility of circumventing the customer front end.\u003c/li\u003e\n \u003cli\u003ePossibilities for cobranding open APIs should be explored.\u003c/li\u003e\n \u003cli\u003eAPIs should never be channel specific.\u003c/li\u003e\n \u003cli\u003eAPIs should pave the way for more business rather than being monetized on their own.\u003c/li\u003e\n \u003cli\u003eThe number of both open and internal APIs should be minimized while optimizing for reusability.\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eFollowing these principles in the design of the future state can help avoid challenges later.\u003c/p\u003e\n\u003cp\u003eStill, this planning exercise requires time and is often overlooked because of the sheer complexity of the existing interface landscape. Companies that take this time at the outset will be able to drastically reduce their number of APIs.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e\u003ca href=\"/our-people/sven-blumberg\"\u003eSven Blumberg\u003c/a\u003e\u003c/strong\u003e is a senior partner in McKinsey\u0026rsquo;s Istanbul office; \u003cstrong\u003eTimo Mauerhoefer\u003c/strong\u003e is an associate partner in the Frankfurt office, where \u003cstrong\u003e\u003ca href=\"/our-people/henning-soller\"\u003eHenning Soller\u003c/a\u003e\u003c/strong\u003e is a partner; and \u003cstrong\u003eChandrasekhar Panda\u003c/strong\u003e is a senior expert in the Abu Dhabi office.\u003c/p\u003e"},"hidePromoBar":{"boolValue":false},"hideDek":{"boolValue":false},"mobileReady":{"boolValue":true},"selectedModalSubscriptions":{"targetItems":[]},"hideFromSearchEngines":{"boolValue":false},"parent":{"id":"689474C64F0B4DFDBE98D4577332C352","name":"Tech Forward","title":{"value":"Tech: Forward"},"description":{"value":"Our short takes on key technology and architecture topics"},"url":{"path":"/capabilities/mckinsey-digital/our-insights/tech-forward"},"heroImage":{"alt":"Tech: Forward","src":"/~/media/mckinsey/business functions/mckinsey digital/tech forward blog/tech-arch-blog_1536x864.jpg","description":""},"heroBackgroundColor":{"targetItem":{"displayName":"Deep Blue"}},"heroImageTopOffset":{"value":""},"horizontalCropPosition":{"targetItem":{"displayName":"Center"}},"heroImageRenderStyle":{"targetItem":{"displayName":"Half Height Hero"}}},"ancestors":[{"displayName":"Tech Forward","name":"Tech Forward","id":"{689474C6-4F0B-4DFD-BE98-D4577332C352}","template":{"id":"{D47350B4-752D-4AEB-9F9E-0478AC2A95EB}"}},{"displayName":"Digital Insights","name":"Our Insights","id":"{31935431-A57E-4C69-98DD-6246DDE4D12C}","template":{"id":"{85FF0530-7883-480F-9A4C-82123F72FFD8}"}},{"displayName":"Digital","name":"McKinsey Digital","id":"{5E53683D-3533-4DAD-A9EE-A8303E316C02}","template":{"id":"{414C6C64-AD35-440E-9668-CF39D8A18CCF}"}},{"displayName":"Capabilities","name":"Capabilities","id":"{6B4AAC92-FD7E-4AE2-80E6-6D4D4CE32BB6}","template":{"id":"{85FF0530-7883-480F-9A4C-82123F72FFD8}"}},{"displayName":"Home","name":"Home","id":"{367E4041-0C4A-4A6D-99D7-7D83F5A73EA7}","template":{"id":"{85FF0530-7883-480F-9A4C-82123F72FFD8}"}},{"displayName":"McKinsey","name":"McKinsey","id":"{258857D0-50FA-4C3E-8C11-55EDFF84A992}","template":{"id":"{061CBA15-5474-4B91-8A06-17903B102B82}"}},{"displayName":"Content","name":"content","id":"{0DE95AE4-41AB-4D01-9EB0-67441B7C2450}","template":{"id":"{E3E2D58C-DF95-4230-ADC9-279924CECE84}"}},{"displayName":"sitecore","name":"sitecore","id":"{11111111-1111-1111-1111-111111111111}","template":{"id":"{C6576836-910C-4A3D-BA03-C277DBD3B827}"}}],"promoDetails":{"_1clickSubscription":{"targetItems":[]},"promoBarTitle":{"value":""},"promoBarDescription":{"value":""},"promoBarCallToActionLink":{"queryString":"","className":"","anchor":"","linkType":"internal","url":"","text":"","targetItem":null},"promoBarRenderStyle":{"targetItem":null}},"authors":{"targetItems":[]},"blogEntryTags":{"targetItems":[]},"heroImage":{"alt":"The right APIs: Identifying antipatterns of API usage","src":"/~/media/mckinsey/business functions/mckinsey digital/tech forward blog/the right apis identifying antipatterns of api usage/standard-the-right-apis.png","description":""},"thumbnailImage":{"src":null},"showCaption":{"boolValue":false},"heroImageTopOffset":{"value":""},"horizontalCropPosition":{"targetItem":null},"heroBackgroundColor":{"targetItem":{"key":{"value":"Deep Blue"},"value":{"value":"deep-blue"}}},"heroImageRenderStyle":{"targetItem":null},"relatedPosts":{"targetItems":[]},"contentType":{"targetItem":{"displayName":"Blog post - 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