How APIs enabled enterprise to open up

Key takeaways

  • From USBs to HTTP, the concept of open architecture has been a driving force in innovation.
  • Commercial pressures once dictated that technologies were kept secret – now, open architecture and APIs are considered to offer competitive advantage.
  • Developments in cloud computing can help bring open architecture software packages together on single platforms.

“How open is your architecture?”

That’s a question we often ask when undertaking a technology review of an organisation. For a business to operate competitively in 2016, an open architecture approach to technology can help ensure future stability and success.

It doesn’t matter whether it’s used internally, such as a retailer company’s point-of-sale systems, or externally as part of a company’s own product or service offering. There is much to be gained for businesses that take the open architecture road.

For organisations using a number of different open architecture-based finance, accounting and business applications, PwC has developed a cloud-based platform to connect software together, helping them to speak a common language.

What is open architecture?

Spanning hardware and software, open architecture is the ethos that accessibility breeds innovation. It grants controlled access to a technology platform, encouraging others to use it, to build on top of it and perhaps improve it, all the while increasing its prospects of widespread adoption.

Common examples of open architecture in hardware are USB plugs and ports. An acronym for Universal Serial Bus, USB is a publicly documented standard governed by the not-for-profit USB Implementers Forum. Anyone can build a USB-compatible device, so long as they use the Forum’s set of predefined standards.

When this open approach to hardware is integrated with software, the technology can become commoditised. This is what happened with USB, which works in exactly the same way, no matter who makes it or what software uses it.

As a result, hardware manufacturers the world over have incorporated USB compatibility into their products, giving rise to USB-compatible computers, power-plug boards and even guitar amps.

Open software and the internet

The other part of the open architecture equation is software. Like its physical counterpart, open architecture software features openly published standards and again, can often be overseen by a not-for-profit foundation.

The most ubiquitous open architecture software is probably the hypertext transfer protocol (HTTP), which powers the World Wide Web.

Planet of the APIs

Open architecture software comes in another form, the application programming interface (API). Designed to facilitate simple methods of interaction, APIs have exploded in importance in the digital economy, aided by the rise of new web industries such as social media and cloud computing.

The cloud computing industry, in particular, provides a good example of effectively deployed APIs, such as Google Cloud, Microsoft Azure and Amazon Web Services. Through open APIs, these platforms offer access to considerable storage and computer processing capability, all of which are themselves open architecture hardware platforms.

The computing arms race

To truly understand APIs, it pays to learn how they came about in the early stages of the personal computer industry. While a culture of hardware add-ons and modularity had helped create the market in the 1970s, by the early 1980s there was significant commercial pressure to keep the inner workings of computing technologies both secret (so outsiders did not know exactly how they worked) and proprietary (modifiable only by the creator or patent holder).

Perhaps the most famous example of shifting from an open to closed architecture approach came from Apple in the 1980s. Its early breakthrough computer model, the Apple II, had multiple expansion slots for integrating third-party hardware. By 1984, however, this modularity was dramatically reversed with the Apple IIc, which featured no expansion slots at all.

Playing in a walled garden

Companies believed a ‘walled garden approach’ to computer research and development would assist in the arms race to develop faster, better technology. After all, a firm that retained full control over its software or hardware products could make strategic decisions without having to consider the positions of a broader community of stakeholders. Even more enticing was the prospect of lock-in, which guarantees sizable market share by keeping customers within a product ecosystem.

But while closed architectures had several business advantages, there were important innovation opportunities in granting limited access to outside parties – through what would eventually become closed APIs. Perhaps the key strength, ironically, was the reduction of competition.

Without the requirement to keep everything a secret, partnering companies could improve software through the use of closed APIs. This freer approach also allowed software to better interact with other software, expanding the functionality of both systems.

Lost in translation

As dominant hardware and software manufacturers emerged, the initial trickle of closed API access gradually gave way to fully open APIs, allowing large amounts of software and hardware to begin interacting in a standardised fashion. But it was a rough start for open APIs. Many companies began to enable their software to interact with other programs, but they all spoke different languages.

Think of the playing field like countries wanting to work together. France wanted to work with Russia, Russia wanted to work with France but France didn’t speak Russian very well and vice-versa. They got there in the end, but the journey took a long time.

This is what happened with the emergence of open APIs. Suddenly everyone had one but you had to speak the language. With the internet beginning to take a more substantive role in active life, a new method of communication became standardised and thus the REST API was born.

The REST is history

The REST API was the brainchild of Roy Fielding, who wrote about REST in his doctoral dissertation at University of California, Irvine, in 2000.

REST provides a base framework for a common web language for everyone to speak. With REST APIs, both France and Russia now spoke English and the translation approach was simplified and facilitated over the internet. Sure, they both had accents, but the communication was much more practical and efficient.

As organisations around the globe have designed their hardware in increasingly open architecture formats, this has, in turn, enabled the design of open architecture software and open APIs leveraging REST.

The end result is software distributed over the web, built to a standard, simple, consistent approach to communicating electronically.

Collaboration has helped shape the digital economy as we now know it. Future innovation depends on improving this collaboration, bringing software products together using common languages in a new era of openness.

PwC’s Next is a cloud-based finance and accounting cloud platform that connects compatible software suites within a single dashboard using API technology. To learn more about Next, visit the website.