API
Application Programming Interface – an interface through which different software systems communicate and exchange data.
APIs are the backbone of modern software development. Every app on your phone, every online shop and every cloud application uses APIs to talk to other systems. Without APIs the connected digital world we have today would be impossible. For businesses, APIs are key to digitalisation: they connect legacy systems with new applications and enable automation.
What is API?
An API (Application Programming Interface) is a defined interface that specifies how software systems communicate. It defines which requests can be made, what data is needed and in what format responses are returned. APIs hide a system's internal complexity and expose only the needed functions. Think of an API like a waiter: you order (request), the waiter passes it to the kitchen (server logic) and brings back the result (response). Modern APIs typically use REST or GraphQL as architecture style and JSON as data format.
How does API work?
Typical API flow: 1) The client sends an HTTP request to a defined endpoint (e.g. GET /api/products). 2) The server validates the request and checks authentication (e.g. API key or OAuth token). 3) The server processes the request, possibly queries a database and builds the response. 4) The server returns the response in JSON with an HTTP status code (200 success, 404 not found, 500 server error). API documentation (often via OpenAPI/Swagger) describes all endpoints, parameters and response formats.
Practical Examples
Stripe / PayPal API: E-commerce shops use payment APIs to accept cards, PayPal and other methods without being PCI-DSS compliant themselves.
Google Maps API: Sites and apps embed maps, routing and geocoding – millions of sites use this API daily.
OpenAI API: Companies integrate GPT models into their apps for chatbots, content generation, translation and analysis.
Odoo REST API: ERP data (customers, orders, stock) is synced with online shops, CRM and logistics via API.
Weather API (e.g. OpenWeatherMap): Logistics companies fetch real-time weather to adjust routes and delivery times.
Typical Use Cases
System integration: ERP, CRM, shop and accounting exchange data automatically without double entry
Mobile apps: iOS and Android apps use the same backend via APIs and share business logic
Partner integration: Suppliers, logistics and marketplaces are integrated into your value chain via APIs
Automation: Processes like invoicing, stock updates or customer communication run automatically via APIs
AI integration: AI models are integrated into existing software via API without changing the core app
Advantages and Disadvantages
Advantages
- Modular architecture: Systems can be developed, deployed and scaled independently
- Reusability: One API is built once and used by many applications
- Technology freedom: Frontend and backend can use different technologies as long as the API contract is stable
- Scalability: APIs enable load balancing, caching and horizontal scaling
- Ecosystem: Public APIs let third parties build on your platform
Disadvantages
- Dependence on third parties for external APIs (availability, pricing, deprecation)
- Security risk if not secured properly: abuse, data leaks, DDoS
- Versioning and backward compatibility need careful planning when APIs change
- Complexity grows with the number of APIs – API management and monitoring become essential
Frequently Asked Questions about API
What is the difference between REST API and GraphQL?
How do you secure an API properly?
What does developing an API cost?
Related Terms
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