How APIs became the building blocks for software

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APIs have been around for decades, but it’s only in the last few years that we have seen the API economy arrive in full force. To understand the significant roles APIs play today, it’s important to understand their history and the context in which they have originated.

The early days

In the 1970s, companies like IBM dominated the relatively small market by developing and selling mainframe computers. They created and sold entire systems — fully integrated hardware and software. As the market grew, however, more companies popped up that specialized in creating operating systems — separate from the companies developing the hardware. Thus the market bifurcated to operating system companies and hardware companies. 

With the maturation of operating systems and market expansion, new companies popped up developing applications for these operating systems. The market was large enough to support independent software vendors that created specialized applications. This era led to the creation of many applications that we still use today, and made application development a profitable business.

As you can see — a pattern clearly emerges. As the market expands — the product unit gets smaller. Where once companies created entire computers with hardware and software, companies proceeded to develop just the software and later just small parts of that software — individual applications.

APIs now, in a mature market

Now, APIs are emerging as a new smaller product unit. The market has reached a vast enough scale that there are companies focusing on creating and selling APIs that support ap...

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