Published May 20, 2021Updated Oct 26, 2022
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API stands for Application Programming Interface and is a term used to describe specifications that allow applications to communicate with one another.

APIs enable exchange of information, and can be a major source of value (utility, market dependence and revenue) to organizations. APIs are significant components in the evolution of applications because the technical ecosystem is built on top of APIs and leverages them to function and provide many services in use today.


APIs can be divided into three groups:

  • Public APIs, also known as a Open APIs, are available to users with minimal restrictions. An example of this API is Google Maps, which allows users to take advantage of Google’s expansive and detailed map software in a number of ways. Developers can leverage this software and integrate with it in their applications by following the Google Maps API documentation.

  • Private APIs, also known as Internal APIs, are used primarily within a company to share resources and facilitate the business (e.g. Company Warehouse API for managing inventory with code).

  • Partner APIs require rights or specific licenses for use. These APIs are popular in software-as-a-service platforms (e.g. AWS API).

Benefits and Risks of Using APIs

The main benefits of using APIs are:

  • Cost savings through the elimination of the need to build and maintain local physical infrastructure and services.

  • Opportunities to leverage the expertise of other vendors instead of having to reinvent solutions for common problems (authentication, payment processing, maps, etc.).

  • Possibilities to build new businesses and products based on the exchange of data between users and various online services offering API access to independent developers.

The main risks associated with using APIs are:

  • Little to no control over the impact of vendor-only changes including business infrastructure, version updates, and data collection.

  • Nonsecure APIs can become gateways to hacker attacks. As soon as they are breached, other dependent systems become vulnerable. It is commonly predicted that API abuses will become the most frequent vector of attack in the coming years.

  • APIs can be abused by the clients themselves. One example is excessive requests to the API, which is what rate limits are meant to prevent.

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