SECTION 4 20 API Vendors to Watch

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1 18 The API Economy SECTION 4 20 API Vendors to Watch The following list of vendors is not meant to be exhaustive, but it includes 20 primary vendors (listed alphabetically) that we have identified as being focused on the emerging API management market at large, and that we believe have the potential to shape the market in coming years. The vendor list includes both startups and established industry veterans hailing from several IT markets such as SOA platform vendors, data and application integration vendors, platform-as-a-service (PaaS) providers and integration platform-as-a-service (ipaas) providers. Absent in this watch list (for now) are vendors that publish and consume APIs for specific development ecosystems, such as IoT middleware vendors and MBaaS vendors. For the time being, all these markets are still somewhat independent, but all are in the process of converging. The architecture, components and capabilities for various SOA-based application and services development, PaaS, ipaas, API management, IoT middleware and MBaaS are similar. Vendors in each market will attempt to broaden their footprint by adapting their platforms to enable a common framework capable of serving the needs of multiple markets. 451 Research will keep a close watch on this convergence as it occurs. You will note that several of the vendors in this watch list have already begun to make moves in this direction. 3scale FOUNDED: 2007 TOTAL FUNDING: $4.0m (estimate) Most API management platforms available today target API providers or publishers that want to generate business opportunities by exposing their APIs to third parties. Other API management tools help application developers improve the quality of APIs to make it easier for developers to understand how to use the API and properly track its use. 3scale s API Management Platform enables such capabilities. Its APItools offering is designed for developers that struggle to manage multiple APIs from multiple publishers in a single application. This is a relatively new twist in the market serving the consumers of APIs (rather than just publishers) with a tool that enables them to track and comply with the contractual variables tied to APIs from multiple publishers. We expect this to trigger a new round of innovation on the part of other API management vendors to better address API consumers dilemma. Akana FOUNDED: 1998 TOTAL FUNDING: $41.0m SOA Software renamed itself Akana in March 2015 because the firm has expanded its offerings beyond its SOA platform origins. When APIs emerged as critical cloud services enablers, the company recharged its strategy to include API management with new products such as API Gateway, Community Manager and OAuth Server. In 2011 it announced its API Management platform, which has been driving much of its recent engineering and marketing efforts. Akana has been doing well in the market as the result of its API management strategy and platform. It continues to accumulate customers and deepen relationships with those already established.

2 RESEARCH Its API catalog will help it open up new opportunity in enterprises that have developed, created and are using internal services and APIs for data and application integration but have lapsed in the use of consistent SOA development practices. An internal catalog may help establish fundamental SOA principles without much cost or effort. Akana is preparing its platform to support big-data analytics and DevOps. Apiary FOUNDED: 2010 TOTAL FUNDING: $1.6m Apiary s strategy to sponsor, build out and productize the Blueprint API description language is gaining traction in the market. It is nicely designed, easy to use and reasonably priced. Its agile development approach to API lifecycle design is consistent with how enterprises are exploiting agile programming techniques and gradually moving toward DevOps and continuous integration practices. Both such IT practices are on the rise in nearly all enterprises, and Apiary s product portfolio is likely to complement such efforts. Once the firm matures a bit and proves itself in the market, it should represent a strong acquisition target; likely acquirers would be those that seek to bolster their application development, DevOps, continuous integration or API management offerings with stronger design tooling. Apigee FOUNDED: 2004 MARKET CAP: $428m Apigee went public on April 23, 2015, opening at $20/share. Its stock at the time of this writing is trading below the opening price. It is the first of the API management pioneers to go public. Apigee has crafted through experience a succinct and realistic two-part strategy. First, develop a sound API management technology platform that is attractive to application and integration developers. Then, position it to help businesspeople build digital channel partner relationships, and generate action from analytic insights derived from API data flow. The latter analytic strategy can potentially help generate a perpetual revenue stream, if in fact analytics insights drive incremental API calls. The company has strong partnerships with notable firms such as Accenture, Equinix and SAP. It recently entered the IoT market with its Apigee Link offering. Apigee is among the leaders in the API management space. Axway FOUNDED: 2001 MARKET CAP: $408m Axway, a B2B integration vendor, acquired Vordel in 2012 to add API management capabilities to its Axway 5 Suite that was composed of electronic data interchange (EDI), managed file transfer (MFT), and operational intelligence tooling and services. Vordel added an API Gateway for access and an API Portal for development, among other capabilities. Its traditional MFT- and EDI-based business model has been slow to adapt to cloud-based technologies, and it lacks an ipaas offering that many of its rivals have embraced.

3 20 The API Economy CA Technologies FOUNDED: 1976 MARKET CAP: $13.7bn CA Technologies bought API management vendor Layer 7 Technologies in April 2013 for $155m. CA s strategy was to use Layer 7 to extend the functionality of both its existing identity and access management portfolio, including SiteMinder, and its DevOps family, including the LISA Service Virtualization suite. CA envisioned five applications for Layer 7 s technology: to secure management of cloud, mobile and IoT initiatives; to externalize and monetize API assets; to expand API developer networks; to use API governance to enforce SLAs; and to secure API businesses through authentication, authorization, auditing and threat protection. The technology has now been rebranded as CA API Management. Cloud Elements FOUNDED: 2012 TOTAL FUNDING: $3.1m Cloud Elements offers a one-to-many approach to API design and deployment. It enables developers to use a single API to connect applications to many of the leading SaaS providers in various categories such as documents, CRM and finance. It offers a layer of abstraction that minimizes the number and types of APIs and connectors developers have to use for application integration with, and across, like cloud services. Its technology combines API management and integration capabilities that take the redundancies out of integrating with multiple services of similar categories. It may represent a new architectural approach to hybrid IT integration strategy overall. Dell Boomi FOUNDED: 1984 TOTAL FUNDING: Taken private in 2013 for $25bn Dell acquired the SaaS integration vendor Boomi in November 2010 to help foment its cloud strategy. At the time, Boomi s platform had some API management capabilities, but they were limited to Web services publishing. In 2012, the company introduced Atom Workers, which helped ensure predictable performance levels for real-time data transfers. This was followed in 2013 with capabilities to monitor, measure, secure, throttle and scale published APIs. It recently announced that Boomi has extended its AtomSphere ipaas with a set of API lifecycle management capabilities. Dell Boomi API Management offers features that enable users to create, publish and centrally manage APIs on-premises or in clouds. Dell is reacting to both the explosive use of APIs by enterprises and the actions of its rivals. The new API Management release will help Dell Boomi maintain its market leadership position as the ipaas market evolves and converges with the API management market. It also exposes the larger Dell Software group to new opportunities in hybrid cloud integration, mobile application integration and IoT projects.

4 RESEARCH DreamFactory FOUNDED: 2005 TOTAL FUNDING: $13.3m DreamFactory s Services offering is an open source REST API platform, essentially an open source backend for HTML5 and mobile applications. It is designed for developers to connect mobile, desktop and IoT devices to any enterprise or public data source, without having to do the serverside work to build their own security or user management systems, and without having to customcreate their own REST APIs. As part of its strategy, DreamFactory is pitching its services platform to become the default backend for the growing number of mobile applications that enterprises are looking to create. It has made a good start developing the platform, building installers for key platforms and getting itself into a range of enterprise software marketplaces. DreamFactory does not want to become a SaaS vendor of the platform and instead is hoping its larger partners, such as Microsoft and IBM, will drive adoption. It has recently finished building installers for PaaS environments including IBM s Bluemix and Cloud Foundry. IBM FOUNDED: 1911 MARKET CAP: $167.5bn IBM originally entered the API management market in April 2012 with its Cast Iron API Cloud. Its current API Management V4.0 offerings are composed of a family of products designed to create, manage and securely share APIs. They include a developer portal for self-service application development and onboarding; means to curate existing internal or external APIs in a catalog; utilities to manage applications and API plan subscriptions; and analytics and operational metrics to track API usage and performance. IBM API Management capabilities can be found in its Bluemix PaaS, WebSphere and DataPower offerings. IBM prefers to operate independently and has not as yet worked with other API management vendors in the market to co-develop any interfaces/integrations to its DataPower products. Informatica FOUNDED: 1998 MARKET CAP: Taken private in 2015 for $5.3bn In June 2014, Informatica acquired StrikeIron primarily for its data quality management technology. A residual benefit, which the integration vendor did not pick up on immediately, was the value found in StrikeIron API management capabilities. The company has since added StrikeIron s API framework to its Informatica Cloud ipaas to improve how APIs can be published and consumed. The offering provides more comprehensive data-integration capabilities, includes process orchestration and enables composite service creation (integrating multiple APIs into a composite service). Informatica isn t interested in competing with other API management providers. On the contrary, it is positioning to add value to platforms that manage APIs. As one would expect, the vendor believes that publishing and consuming APIs requires strong integration capabilities with data sources. Its approach complements the functionality of other API management platforms that offer features for API cataloging, packaging and marketing; developer community management and portal; and API measurement including reporting, billing and chargebacks. There may be some capability overlap in the areas of API design, definition and development, but it will likely be inconsequential.

5 22 The API Economy HP FOUNDED: 1939 MARKET CAP: $59.1bn The roots of HP s API management offerings are grounded within its communications industry portfolio of products and services. HP s API management platform provides cloud services enablement, M2M communications, network applications and call management. In 2013, it began to take what it learned in the carrier markets and offer its API management capabilities to enterprises that are now using APIs more frequently for purposes of messaging (text and content), charging and payments, and advertising and applications that include personalized recommendations (marketing). HP will still need to build out a different go-to-market approach if it is to upsell to existing enterprise customers or even attract new ones. API management is maturing nicely technically, but business users are still a bit confused and will require education and hand-holding to learn how to use APIs to craft business partnerships and generate new sources of revenue. HP will have to bolster its efforts in this regard. Managed Methods FOUNDED: 2007 TOTAL FUNDING: $3.5m Managed Methods tech-savvy team sees newfound opportunity in the SOA foibles of the past. It is not just trying to carve out a piece of the emerging API management market; it is approaching enterprises that already have invested in and are using Web services and APIs with a discovery tool. The firm is targeting IT and security professionals, helping them get a handle on current in-place Web services and API use before they expose IT infrastructure to risk when cloud services and mobile networks form hybrid clouds. All in all, it s a good strategy that can be backed up with upsell efforts to the rest of its API management portfolio. MuleSoft FOUNDED: 2006 TOTAL FUNDING: $131m MuleSoft is aggressively pursuing what it believes to be the most promising segment for growth among the various data, application and cloud-integration markets RESTful APIs. Throngs of developers seek to learn how best to design and develop them. MuleSoft is feeding the market a steady stream of resources and hoping to itself become a de facto firm for all things API. It made available its developer tooling for the RAML open source language; these tools (API Designer, API Console and API Notebook) are offered as a free service available on MuleSoft s APIhub and as an open source download. They are intended to assist developers in building REST APIs by standardizing design patterns and using plain English to describe them. This should help the firm continue its growth and drive revenue to its Anypoint offering. While MuleSoft has been hard at work crafting its API strategy, its ESB and ipaas rivals have been adding process orchestration, data-quality management and big data integration to their respective integration platforms all high-value capabilities beyond API management that MuleSoft may also have to address to maintain its established customer base.

6 RESEARCH Oracle FOUNDED: 1977 MARKET CAP: $189bn Oracle s approach to API Management was based on its Oracle API Gateway, Enterprise Repository, Service Bus and SOA Suite that provided lifecycle management of APIs. In November 2014, Oracle announced that it will extend its API Management offering with an API Catalog that provides the ability to simplify the publication of APIs that are developed in Oracle SOA Suite and other sources. It integrates with Oracle Mobile Suite, a portfolio of products for mobile enablement. The API Catalog harvests services in Oracle Fusion Middleware to allow one-click publish and manage re-use across other consuming applications. It is SOAP- and REST/JSON-compliant. In February 2015, Oracle released its API Manager, a product that extends its Service Bus functionality providing a portal to manage APIs and browse analytics. Red Hat FOUNDED: 1993 MARKET CAP: $13.67bn Red Hat views API management from two perspectives. At a base level, the company believes it should enable capabilities for design and development, and secure access and control based on policies via an API gateway. At a higher level, when it is used to nurture a community of developers and establish business relationships as part of the API Economy, other capabilities will be needed to manage API uses and monetize APIs as products. Red Hat s apiman open source project kicked off in January 2015 to address the former. In February 2015, the company created a partnership with 3scale to address the latter. Red Hat admits that it is late to the API management market, but it reports several proof-of-concept projects currently under way with 3scale. Indeed, its customers are drawing Red Hat into the API market as part of the broader discussion of the evolution of SOA and the JBoss Middleware platform. Restlet FOUNDED: 2012 TOTAL FUNDING: $4.0m Restlet (the company) is bringing Restlet (the open source API framework for Java) to market after roughly 100,000 developers have had a chance to use it over the past 10 years. This is much along the same lines as Apigee with its support for the Blueprint API description language and MuleSoft with its backing of RAML. The difference with Restlet is that it s attempting to enable the framework with a broader spectrum of API lifecycle management capabilities than most other rivals. Moreover, it wants to extend API publishing and consumption capabilities directly to nontechnical business users. It believes that more of them are being charged with building greater value from information and application assets, and APIs are the tools needed to expose such assets as consumable services. However, many business personnel are just now being exposed to the API learning curve something Restlet (like HP) needs to be aware of and make efforts to flatten its slope and guide their ascendance.

7 24 The API Economy SmartBear Software FOUNDED: 1999 TOTAL FUNDING: Undisclosed SmartBear offers management software that supports the application-delivery processes of development, testing, API readiness and user-experience monitoring across desktop, Web and mobile platforms. Overall, API management vendors are building out their platforms to address as many of the capabilities required to manage API lifecycles as possible (e.g., design, develop, test, integrate, deploy, manage, monitor and retire/archive). Testing is not glamorous, but it is essential to enable quality code, especially under the range of use cases to which various APIs will be subjected e.g., Web services, mobiles devices, hybrid cloud architectures, social media and analytics, and IoT. That means testing calls for unique capabilities and skills that API management vendors don t have the time, resources or capital to duplicate. That s why many are partnering with third parties to enable high-quality API testing. SmartBear s skills in application quality management, and its unique focus on API testing in particular, make it the go-to vendor for such purposes for now. In March 2015, SmartBear acquired the Swagger API open source project from Reverb Technologies. SmartBear is now the company behind the two most widely adopted API open source initiatives, SoapUI and Swagger. Talend FOUNDED: 2006 TOTAL FUNDING: >$100m Talend is making headway on several fronts in preparation for an IPO (or perhaps another liquidity event) sometime in It is expanding beyond its ESB and big data integration roots to enter new markets. It recently launched Talend Cloud, an ipaas based on Talend s Unified Platform. The Version 1.0 offering will enable data integration as a service that include its Flow Builder (a Web-based integration design tool), support for batch and bulk data integrations, data-preparation tooling along with initial support for big-data integrations, and a marketplace designed to attract open source communities by offering integration-flow templates to popular SaaS offerings (e.g., for CRM, marketing, HR and others). Version 1.2 is planned for late summer 2015, and will accommodate customer feedback and enhancement requests, and include smarter data-preparation and mapping capabilities. Version 2.0 is targeted at the end of 2015 or perhaps into 2016, and is expected to enable real-time integrations and include Talend s initial foray into API management. At a high level, Talend s API management capabilities will include an API Studio for development; a Portal for documentation, publishing and marketing; a Gateway for exchange and policy enforcement; and an API Manager that will include API lifecycle management, billing and metering, partner administration and analytics.

8 RESEARCH WSO2 FOUNDED: 2005 TOTAL FUNDING: $20.5m WSO2 s product strategy is to create a unified application development and deployment framework via several related and interconnected open source platforms one that provides a common platform for cloud DevOps, application service governance, cloud integration, runtime management, IT delivery, API management and mobile enablers. In 2012, it added API management to its open source software and App Factory PaaS. Its API Manager enables API monetization, chargeback capabilities and analytics through monitoring. API Manager seems to be opening new doors for the firm that may attract considerable upsell potential. Its App Factory can appeal to organizations seeking an integrated suite of application development and DevOps capabilities and can help manage development projects to rapid completion.