Global API Management Market By Deployment Type (Cloud, On-Premises, and Hybrid), By Component (Solutions and Services), By Application, By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032

Report Overview

In 2022, the Global API Management Market was valued at US$ 4.5 billion. Between 2023 and 2032, this market is estimated to register the highest CAGR of 28%.

API stands for Application Programming Interface, and commonly, it refers to any software with a distinct function. APIs enable organizations to expose application data and functionality to internal departments, external business partners, and third-party developers within an organization. They enable services and products to communicate with each other and use each other’s data and management through documented interfaces.

Developers don’t necessarily need to know how to implement the API. It just uses interfaces to communicate with other goods and facilities. The use of APIs has grown so rapidly over the past decade that many of today’s most popular web applications wouldn’t be possible without them.

Drivers

Increasing Need for APIs to Increase Digital Transformation

The growing need for APIs to integrate and manage various systems and applications is driving the growth of the API management market. With the digital transformation and increasing use of cloud-based services, APIs play a vital role in connecting various systems, data sources, and applications. It thereby facilitates information exchange and enables enterprises to develop new digital services. An API management platform provides tools to design, build, document, secure, publish, and manage APIs to help your organization stay ahead of the competition.

Changing Requirements of Consumers

The API management market is mainly driven by the increasingly popular API-based availability. In addition, companies around the world are implementing strategies to manage their application developer interfaces to respond quickly to changing customer requirements. This is the key factor expected to drive the growth of the global API management market. Through API management, organizations across industries focus on providing enhanced in-store or out-of-store information, as well as modified recommendations, item support, gender-based offers, location, and the behavior of customers.

Increasing Urbanization

Growing demand for API connectivity-based sustainability solutions and technological advancements are driving market development during the forecast period. People are moving from the countryside to the city, creating a need for new buildings and, therefore, new approaches are formed. The world is undergoing rapid urbanization as major cities drive economic growth.

Restraints

Lack of Skilled Professionals

In existing infrastructures, it is important to install new API solutions. A skilled developer is crucial in implementing a bug-free API management solution. Such developers must have a good knowledge of software development. They must be up to date with recent trends in API management techniques. The amount required to hire these skilled professionals is very high. The time invested in training these professionals is also a lengthy procedure.

This proves to be a crucial factor in restraining the growth of the market. Management of various cloud systems for different platforms is becoming a challenge for the major players in the market. This is expected to hinder market growth during the forecast period.

COVID-19 Impact Analysis

COVID-19 had a Positive Impact on the API Management Market

In the wake of the COVID-19 outbreak, organizations were rapidly reorganizing their business processes and adapting to digital transformation. With a digital-first strategy, APIs have become a priority to accommodate new business models such as content sharing and remote communication. Businesses have been forced to reassess the economy and supply chains since the COVID-19 outbreak. APIs provide manufacturers with information about units produced, defects, and other relevant factors to help overcome supply chain disruptions. As a result, API policies can be customized to meet real-time scenarios while meeting future needs.

To a certain extent, the COVID-19 pandemic disrupted the delivery of raw materials worldwide, particularly in low and middle-income countries. Various industries, such as manufacturing, construction, healthcare, etc., were adversely impacted.

Deployment Type Analysis

On-Premises Segment is Dominant

Based on type, the market for API management is segmented into cloud, on-premises, and hybrid. The On-premises segment led the overall market in the API management industry in 2022 with a 48% market share, and it is expected to continue to lead during the forecast period. Since API management solutions are deployed on-premises, they are easily accessible by clients due to their physical presence in data centers.

A new generation of cloud solution providers is developing applications and solutions that are impacting the market for on-premises software and solutions. As a result of the growing cost of maintaining on-premises solutions, such as hardware and computing devices, the demand for the on-premises deployment type is also likely to grab the market during the forecast period. Critical data of users is stored in this mode of deployment in organizations that deal with business functions that require critical access to the data.

Financial services and banking industries handle the financial information of their customers. Hence, these industries are likely to opt for on-premises API management solutions. Hybrid API management allows consumers to take advantage of the benefits of a SaaS environment in addition to the increased control provided by on-premises solutions. In the traditional cloud model of API management, all API calls are redirected through the cloud gateway.

Component Analysis

The Solution Segment is Dominant

By component, the market is further classified into solutions and services. The solutions segment dominated the market with a 63.4% market share in 2022. More and more apps and smart devices need to be made available through APIs so companies can create personalized app practices for customers, internal users, and partners. Organizations in all industries need a strong API management software solution to measure the feat of API-centric businesses.

There are three subsegments present in the solution segment: API analytics, API platform, and API security. Due to the seamless integration of systems and components with applications and devices, API management software solutions are in high demand. The API Platform is the digital backbone that provides a unified set of capabilities for API development and management to support the company’s API strategy. The API platform allows developers to securely manage the entire API lifecycle across the entire API context.

The Analytics API is designed to collect a variety of analytics data for use by different teams, but this data is often used for analytics in non-real-time scenarios. One of the key differences between API Monitoring and API Analytics is the alert mechanism built into API Monitoring. API security is a term referring to practices and products that prevent malicious attacks on the application of API.

By services market is further classified into integration and implementation, consulting, training & education, and others. API assimilation is the joining between two or more applications through their APIs that allows those systems to interchange data. API integration and implementation allows sharing of data among application in a given ecosystem.

API consulting is an operation of converged and integrated infrastructure without interruptions. API training & education interfaces connect the databases of educational institutions with their students, the public, and researchers. Also, API has significant applications in healthcare industries too.

Application Analysis

BFSI Segment is Dominant

Based on application market is classified into aerospace and defense, BFSI, automotive, transportation, healthcare and Lifesciences, and others. The BFSI segment is dominant in the market. BFSI service providers are starting to standardize API monetization and open banking capabilities. This move will improve the customer and bank experience and transform business operations.

The integration of financial data with other services will change as banks continue to adopt API technology. This supports low-cost banking. In the automotive industry, an API is a link that allows vehicle applications to interact with other applications and software platforms.

Advanced driver assistance system “ADAS” for example, a platform might expose APIs to applications that perform specific functions, allowing those applications to receive information about the current environment around the vehicle and make decisions based on the information. Using APIs as part of an electronic health record system can make it easier for patients to obtain important health information.

Key Market Segments

Based Deployment Type

• Cloud
• On-Premises
• Hybrid

Based on Component

• Solution
• API Platform
• API Analytics
• API Security
• Services
• Integration & Implementation
• Consulting
• Training & Education
• Others

Based on Application

• Aerospace and Defense
• BFSI
• Automotive
• Transportation
• Healthcare and Lifesciences
• Other Applications

Opportunities

Increasing Use in BFSI

The API management industry is also boosted due to growing healthcare industries, automotive industries, and BFSI in several emerging economies. The rapidly increasing geriatric population, rising per capita incomes, high API requirement, and spiking need among individuals are driving the need for enhancing the automotive industries and BFSI in these nations.

Therefore, the governments in these economies are increasing their investments to improve BFSI facilities & infrastructure. Owing to the high number of applications of API in healthcare industries, automotive industries, and BFSI, the rising investment in this industry is slated to offer growth opportunities in the market.

Trends

Competitive Landscape of Manufacturers

Manufacturers are now more inclined toward raw material procurement at competitive pricing.  Some independent manufacturers hire third-party suppliers to sell their products. API manufacturers are increasingly focused on product innovation and differentiation as they are steadily moving toward consolidation through mergers & acquisitions, joint ventures, and collaborative partnerships. Such trends are currently being witnessed in this market, thereby bolstering the demand for API management in the process.

Regional Analysis

North America Region Holds Lucrative Market Share

North America is estimated to be the most lucrative market in the global API management market, with a market size of 37.6%. In North America, the advancements in R&D facilities and the technological adoption rate is greater. As such, the market for API management is anticipated to grow.

Furthermore, an increasing amount of mobile users paired with the penetration of e-commerce also boosts several emerging economies such as Brazil, India, South Africa, and China. The rapidly increasing geriatric population, rising per capita incomes, high API management demand, and increasing API management systems in healthcare and BFSI are driving the need for enhancing the API management industries in these nations.

Key Regions and Countries Covered in this Report

• North America
  • The US
  • Canada
  • Mexico
• Western Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Portugal
  • Ireland
  • Austria
  • Switzerland
  • Benelux
  • Nordic
  • Rest of Western Europe
• Eastern Europe
  • Russia
  • Poland
  • The Czech Republic
  • Greece
  • Rest of Eastern Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia & New Zealand
  • Indonesia
  • Malaysia
  • Philippines
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Colombia
  • Chile
  • Argentina
  • Costa Rica
  • Rest of Latin America
• Middle East & Africa
  • Algeria
  • Egypt
  • Israel
  • Kuwait
  • Nigeria
  • Saudi Arabia
  • South Africa
  • Turkey
  • United Arab Emirates
  • Rest of MEA

Market Share & Key Players Analysis

Emerging key players are focused on a variety of strategic policies to develop their respective businesses in foreign markets. Several API management market companies are concentrating on expanding their existing operations and R&D facilities.

Furthermore, businesses in the API management market are developing new products and portfolio expansion strategies through investments and mergers, and acquisitions. In addition, several key players are now focusing on different marketing strategies, such as improving consumer facilities, which boosts the growth of target products.

Recent Developments

• In March 2022, Google launched two new products to help fleet operators improve delivery efficiency and maximize fleet efficiency: Google Street View Platform, Last Mile Fleet Solutions, and Cloud Fleet Navigation API through Google Cloud.
• In July 2022, Microsoft introduced its API management service with Azure Private Link Support.

Market Key Players

Listed below are some of the most prominent API management company players.

• Google Inc.
• IBM Corporation
• Amazon Web Services
• Microsoft Corporation
• Akamai Technologies, Inc.
• WSO2
• Broadcom Inc.
• Axway Software
• TIBCO Software Inc.
• Software AG
• Torry Harris Business Solutions
• Cloud Elements, Inc.
• Mashape Inc.
• Workato
• Kong Inc.
• Tray.io
• Other Key Players

Report Scope