Using an API versus Open Source

Many businesses don’t consider the benefits of an Application Programming Interface (API) to generate attention for their software or web services, gain backing of other companies and even lower their own customer support costs.  I often raise this approach with clients since I advised Intuit on setting up its Intuit Developer Network program a few years ago.

Here is a very simplified explanation for business people (not programmers!) of the difference between offering your company’s software as open source and making it available through an API. (Scroll to the bottom to see the differences between Closed Carl, Open Oscar and API Annie.)

Offering an API enables companies to test the waters by opening their products in some respects, but retaining legal and technical control over their use.  An API strategy often can be a middle ground between a fully proprietary approach and an open approach (e.g., making the software open source).

As I mention above, using an API can reduce a company’s customer support costs, because other companies who use the API can add and support their own extensions and functions.

If you are looking to use an API for another company’s product or web service, you may not see it advertised as an API.  Often, it will be licensed as part of a Software Development Kit (SDK), which may be part of a free or fee-paid developer program.

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