How Businesses are Using APIs for Competitive Advantage

By  //  January 25, 2021

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An API is a computing interface that allows applications to share information and data with each other. They have had a huge impact on the digitization of business operations and the use of software applications in our lives.

While there are many successful companies founded in the digital age to compete with informal companies, both sets of companies are using APIs to collect customer information for use in different areas when running the companies.

However, even though companies are already implementing APIs, most of them have not yet reached the APIs’ full potential. This is because they most often use their information internally while allowing external organizations to build services using the data.

Adopting APIs is the only solution that can change this. It helps in opening up ways through which businesses can pursue growth and build a competitive advantage.

Take for example companies such as Facebook, Uber, Airbnb, and PayPal. These companies use APIs to drive their operations. They have grown exponentially in the past few years while driving their competitive advantage using APIs.

The media industry has not been left behind. Media companies are using APIs to enhance their customers’ experience and streamline how they deliver content. Even though there are multiple news APIs developed today, these featured news APIs have made a difference for media companies.

How APIs are Driving Competitive Advantage; Gathering Customer Behavior Information

We have seen that companies are implementing APIs to help in running their daily operations. This means that customers transacting with the companies have to interact with these APIs in one way or another. When they do so, companies that have implemented smart APIs collect a lot of information that they can use in different areas of their companies.

For example, Airbnb will most likely know where a customer is and for how long they are there when they book an apartment. They will also know when they are most like to go on holiday or their most favorite holiday destination. Airbnb can use this information or even allow other companies to use it the way they want.

Predicting Consumer Behavior

Smart companies are using APIs to collect data related to their customers and the customers’ behavior. When analyzed, this data can be used to improve customer experience, address changing customer demands, and even offer products that they are most likely to purchase.

Applications can also use the information on social networks such as Instagram to predict the social behavior of users and offer adverts based on what they find.

This is all done using APIs. This predictive advantage gives these companies an edge over others. They are most likely going to attract partners and as the data grows over time, the value of the companies grows as well.

Meeting Customer Demands

As seen above, companies using APIs are able to collect information about the behavior of their customers. As technology advances, user demands change every now and then. Companies are able to analyze the collected information and learn more about the changing demands.

They also reap the benefits of predicting customer behavior. Smart companies, once they learn about these demands, implement solutions that address the changes in demand, making sure that their customers are able to get what they are looking for.

In addition, they are able to easily adapt to changes in technology by versioning their APIs to make sure that no matter what their customers are using, they (customers) can have a remarkable user experience.


There are hundreds of companies in the world today without remarkable physical assets but their value continues to grow every day. This is because they use APIs and other management tools that implement APIs to accumulate a lot of data and information that is useful in not only running their companies successfully but also running other external companies. These APIs, the data they collect, and the streamlining of business operations they bring offer a competitive advantage to the companies implementing them.