Did you know that, on average, organizations globally use about 110 different SaaS applications? These include everything from HubSpot to Salesforce, SAP, Microsoft 365, Google Workspaces, and more. And with the overall trend towards digital transformation, this number is expected to increase.
In addition to these, many organizations still use on-site, legacy systems. Now, the immediate question is how these organizations share their business data between applications. Just think of it, they must use a single customer’s data in their CRM, marketing platform, email automation platform, and more.
Sure, for a few customers it’s entirely manageable to move from application to application to find and use the data they need. The problem arises, however, when you multiply this number by hundreds or even thousands. Then suddenly, it becomes a lot harder to manage, if not impossible.
That’s where APIs come in. They make this possible and allow organizations to stay efficient despite having to manage vast amounts of data. But what is an API? How does it work? In this post, we’ll look at these questions in more detail and show you the difference between native and custom APIs.
What Is an API?
According to MuleSoft, an API is a software intermediary that allows two applications to communicate with each other. So, in simpler terms, it’s software that helps two different applications talk to each other. To illustrate this concept better, let’s look at a simple analogy.
Think of two different applications as the two different parts of a water heater. In between these two parts, there’s piping that feeds water from the reservoir to the heating element and back. This piping would then be the API that allows the flow of water, or in an application’s case, data between the two applications.
With this in mind, let’s look at a real-world example. When you check the weather on your mobile phone, it connects to the internet and sends data to a server where the latest weather information is stored.
This server then processes the request, retrieves the data, interprets it, and sends it back to your phone. The weather application on your phone then interprets the data it received and shows you the information you’ve requested.
The Difference Between Native and Custom APIs
Traditionally, if organizations wanted to integrate two or more applications and share data between them, they had custom integrations between these applications. These integrations were typically referred to as point-to-point integrations. Now, this could be a straightforward solution between two applications.
The problem is, as mentioned earlier, organizations nowadays don’t use only two applications. The difficulty of developing and maintaining point-to-point integrations increases exponentially as the number of applications increase. This, ultimately, leads to integrations that break easily and cannot scale.
APIs solve this problem by giving developers reusable integrations they can use for different applications with minimal development. Now, the question is, what’s the difference between native and custom APIs?
Native APIs are, as the name suggests APIs provided by a software vendor, and it’s built into a product. For example, HubSpot natively integrates with Salesforce which means the two platforms can communicate with each other effortlessly and no custom code is necessary for the integration.
Keep in mind, though, this is just one example and most of the popular software platforms on the market today offer several built-in, native integrations.
Conversely, a custom API is an API which requires custom code to be written by an organization’s developers to integrate two platforms. This would typically be the case where an organization needs to integrate legacy applications with newer platforms.
It could also happen where organizations need to access certain data endpoints which are not available in a platform’s native APIs. Despite these differences, these APIs fulfill the same roles and offer the same benefits.
The Benefits of Using APIs
Considering the above, it’s easy to see why APIs can be so beneficial for businesses. In fact, they offer several benefits which include:
Increases in productivity. Because APIs are reusable, developers don’t need to create custom integrations for every application or build custom applications for specific tasks. This saves them a lot of development time and effort which then translates into more productivity for an organization.
Costs savings. When developers don’t need to develop custom applications or custom integrations, organizations are able to save a lot of money. This is probably one of the main benefits of using APIs.
Improves collaboration. When organizations can share their business data across the entire enterprise, their employees don’t have to manually share information. This means they can collaborate better and more efficiently.
Improves customer service. By being able to access their customer data across the entire business, organizations are not only able to serve their customers better but can implement new and innovative strategies to interact with them. This is especially important nowadays when customers expect stellar customer experiences with more personalization.
Better analytics. In recent years, data has become increasingly important for organizations to gain insights into their customers and their business operations. By enabling organizations to gather and analyze data across their entire business, APIs give them increased analytics capabilities. As a result, they’re able to understand their customers better, improve their products, be more efficient, and generate more revenue.
Better marketing. Because of the improved understanding organizations have of their customers, they can serve them better. In simple terms, they understand what their customers want and expect. As a result, they’re able to adapt their marketing strategies to their customers’ preferences, which means they’ll market better, more efficiently, and more effectively.
More capabilities. When organizations can expose their functionality as APIs to external, third-party developers, these developers are then able to build added capabilities onto the product. This allows these organizations to not only build strong partnerships with external stakeholders but also allow them to incorporate new features and functionality into their products.
More innovation. As mentioned earlier, by using APIs, organizations will save their developers time and effort because they won’t need to build applications or custom integrations from scratch. In turn, this allows them to focus more on developing and incorporating new features into their products. Ultimately, these organizations will be able to innovate more which, in turn, gives them a competitive advantage.
Increased efficiency. Apart from saving developers’ time and money, organizations will also, as mentioned earlier, allow their employees to be more productive. In simple terms, this allows them to do more in less time which brings about significant increases in efficiency. And with improved efficiency, organizations will be able to take advantage of more opportunities and generate more revenue.
The Bottom Line
In an increasingly competitive and customer-centric market, it’s vital that organizations are as efficient as possible. If they are, their employees will be more productive, their business processes more efficient, and they’ll be able to generate more revenue.
To achieve this, it’s vital that they integrate all their applications and platforms to have access to their data across their business. And here, APIs play a key role.
Hopefully, this post helped illustrate what APIs are, how they work, and the differences between native and custom APIs. To learn more about APIs and integrations, visit our website for more details.
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