5 Types of APIs And How They Differ

API stands for an application programming interface that is like a communication channel between different software systems.

“They let one system send data to another, making it easier to build and connect different parts of a software application,” said Bryant Schuck, product manager lead at Checkmarx, an application security testing company.

APIs play a crucial role for small business owners, developers, and engineers, as well as API designers and architects.

For instance, API software enables business owners to connect their accounting software with their CRM systems, their e-commerce platforms with their inventory management systems, or their websites with payment gateways. This integration reduces manual work, boosts efficiency, and streamlines business operations.

So, what are the major types of APIs, and how do you choose the one that fits your project and business needs?

Table of Contents Table of Contents

1. Key Takeaways
2. APIs for Small Business Owners
3. APIs for Developers and Engineers
4. APIs for Designers and Architects
5. Five Types of APIs and How They Differ
6. Major API Protocols
7. API Architecture
8. Major API Use Cases for Business
9. How to Choose an API Solution
10. The Bottom Line
11. FAQs

Show Full Guide

Table of Contents

1. Key Takeaways
2. APIs for Small Business Owners
3. APIs for Developers and Engineers
Show Full Guide
4. APIs for Designers and Architects
5. Five Types of APIs and How They Differ
6. Major API Protocols
7. API Architecture
8. Major API Use Cases for Business
9. How to Choose an API Solution
10. The Bottom Line
11. FAQs

APIs for Small Business Owners

APIs help small business owners compete more effectively in today’s digital world by enabling them to access, integrate, and leverage a wide range of tools, services, and functionalities to meet their business needs and drive growth.

Bryant Schuck told Techopedia:

“APIs are a game-changer for small businesses. They can speed up development by using third-party APIs instead of building everything from scratch. For example, a mapping app can use Google Maps API. Plus, APIs offer a flexible architecture, which is key for a growing business, especially when security and data consistency are top priorities.”

APIs also allow small businesses to integrate different software systems and services.

Justin Carlson, sales solution engineer at Hyland, a provider of intelligent content solutions, added:

“Designing a new application and making externally accessible APIs a core feature adds a lot of value. As a small business or startup, you are limited in how quickly you might be able to grow your product, but with a strong API set, you also give the ability to others outside of your organization to extend your product or drive value in other ways you may not have been able to develop internally yet.”

In the modern software world, web APIs are the way to go, but there is no perfect answer for which type of web API to use.

“REST APIs are the most common and probably the safest option, but before making any decision on a type of API, a lot of research and understanding should go into the different options,” he said.

APIs for Developers and Engineers

APIs also play a crucial role in modern software development, enabling developers and engineers to build scalable and innovative solutions that can work together to meet the ever-changing needs of users and businesses.

To select the best APIs for their projects, software developers should follow a systematic approach and clearly outline the functionality required from the APIs, said Taylor Dolezal, head of ecosystem at the Cloud Native Computing Foundation, an open-source software foundation that promotes the adoption of cloud-native computing.

Dolezal said this approach includes the following steps:

APIs for Designers and Architects

In addition, APIs can simplify the work of API designers and architects by providing a standardized way for them to design, build, and manage software interfaces.

APIs enable different systems to communicate seamlessly, allow API designers and architects to reuse code and functionalities, and make it easier to integrate new technologies into existing systems.

Five Types of APIs and How They Differ

APIs can be categorized into different types based on their accessibility and use cases, according to Dolezal. They include:

Public APIs

Public APIs, also known as open APIs, are freely accessible to the public without any restrictions. These APIs are often preferred by businesses as they allow third-party developers to bring new and creative ideas to enhance user experience. Companies may even customize their APIs to cater to developers, encouraging innovation.

The developer community generally approves of making APIs public as it leads to a higher number of integrations being developed. Such integrations make both the API and the application it shares data with more valuable and useful.

Taylor Dolezal said:

“Public APIs are designed to be accessible by external users and developers with minimal restrictions and facilitate third-party services and applications.”

Web APIs

Web APIs allow various applications to communicate and interact with one another over the internet. These APIs provide a way for developers to access and use the functionality of a web service or application by making requests and receiving responses in a standardized format, typically using hypertext transfer protocol (HTTP).

“Web APIs enable transferring machine-readable data and functionality between web-based systems using HTTP,” Dolezal said. “Examples of web APIs include REST, SOAP, and GraphQL APIs.”

Partner APIs

Partner APIs aren’t available for public use. Access to these APIs is restricted, and users need specific licenses to use them.

These APIs are commonly used by business partners, such as a business and its clients, for a paid online service.

Another instance of a partner API is a recurring subscription service. If a business wants more control over data access and usage, partner APIs are a good option.

“Although partner APIs are shared externally, they’re only shared with business partners,” Dolezal said. “They facilitate business-to-business interactions and are more controlled than [public] APIs.”

Private APIs

Private APIs, also referred to as enterprise APIs or internal APIs, are exclusively used within a single company.

Their primary purpose is to connect different services within the company and enhance workflows.

Here’s a private API example: a company’s intranet may rely on a private API. These APIs aren’t accessible to the general public and aren’t documented for public use. They are primarily intended for facilitating data transfer between internal systems and aren’t typically beneficial for external developers.

“Internal or private [APIs] are used by organizations to enable different internal systems to communicate and share data,” according to Dolezal. “They help to improve an organization’s products and services.”

Composite APIs

A composite API is an API that combines multiple APIs into a single interface.

This type of API allows developers to access various functionalities or data from multiple sources through a unified endpoint rather than integrating each API individually.

This simplifies development, reduces complexity, and enhances efficiency by providing one interface for interacting with different services or resources.

Mark O’Neill, vice president analyst at research firm Gartner, told Techopedia:

“Composite APIs bring APIs together. When a developer is using an API, they’re normally not just using one API. They might be using one API to pull inventory data, and they might be pulling another API to get tax information, and another one for payments, and so on.

 

“So you could create a composite application by using multiple APIs together. That’s very common because most applications these days use multiple APIs. In fact, they can use very many APIs.”

Major API Protocols

“The main API protocols, each suited for different needs, include REST, which is great for web services; GraphQL, which is awesome for complex queries; SOAP, which is known for its security features; and gRPC, which ensures efficient data exchange,” said Schuck.

REST

The representational state transfer (REST or RESTful) protocol is a set of principles and instructions for constructing web services that enable various software applications to interact over the internet.

REST APIs are frequently used to seamlessly connect web services, mobile applications, and a variety of software systems. These APIs use standard HTTP methods to perform a wide range of actions on resources.

REST API protocols offer a straightforward and scalable method that simplifies communication and data exchange between different applications via the internet.

SOAP

Simple object access protocol (SOAP) is a communication protocol that lets applications running on different operating systems communicate over the internet.

It uses the extensible markup language (XML) to establish the format of the messages that are shared between these applications.

A commonly used protocol for web services, SOAP enables the integration of different platforms and systems.

GraphQL

GraphQL is a language used for querying APIs and also serves as a runtime for executing these queries using a company’s current data.

The advantage of GraphQL is that it enables clients to request only the necessary data, making it a more efficient and adaptable alternative to traditional REST APIs.

As such, GraphQL is popular among developers and organizations for building modern web and mobile applications.

gRPC

Google remote procedure call (gRPC) facilitates communication between various services by providing a modern open-source RPC framework.

gRPC uses a language-agnostic protocol and supports multiple programming languages, making it efficient and versatile for building distributed systems.

REST vs. SOAP vs. GraphQL vs. gRPC Comparison Table

API Architecture

API architecture pertains to the structure and design of the interfaces that let various software systems communicate with each other. It consists of the rules, protocols, and tools used to develop and integrate APIs within software applications and systems.

The types of API architecture include:

Monolithic APIs

Monolithic APIs refer to a type of API architecture where all the functionality and services are bundled together into one large and tightly-coupled system. In this architecture, the API’s various modules and components are interconnected and rely on one another.

Microservices APIs

The architectural design of a microservices API involves organizing an application into individual services that are small and have loose connections. These services are responsible for distinct business capabilities, and they can be created, implemented, and scaled separately.

Unified APIs

A unified API architecture refers to a design approach where multiple APIs are consolidated into a single, unified interface. A unified API aims to simplify the integration and interaction between different systems, services, or applications by providing a standardized and consistent way to access their functionalities.

Unified APIs are a new kind of API in use today that act as a translator of APIs into a standardized one, said Romain Sestier, co-founder and CEO of StackOne, a provider of embedded integration platform as a service.

Sestier told Techopedia:

“They integrate many of the third-party tools that your customers are already using, making it easier to integrate with several tools at the same time. With unified APIs, you are not just integrating with one platform but with an entire category of software at the same time. For example, instead of integrating with one CRM, you’re integrating with all of the CRMs on the market.”

“This makes it much more cost-effective, and it means that small business owners using unified APIs have a disproportionate advantage on the market because they can now have a super broad ecosystem of integrations on day one,” Sestier added.

Major API Use Cases for Business

APIs are essential to software development and digital services by enabling developers to build new products that cater to the changing needs of users, and they’re used across many domains, according to Dolezal.

For example, payment APIs, through integrations with PayPal and Stripe, enable e-commerce sites to process payments. In addition, social media APIs provided by Facebook and X (former Twitter) permit social media functionality integration into other applications.

“Also, cloud service APIs, such as those from AWS and Google Cloud, enhance cloud storage and computing,” Dolezal said. “Maps and location APIs, such as Google Maps, provide detailed geographical data and mapping features to applications. And communication APIs, such as Twilio or SendGrid, make sending SMS, email, and other forms of communication easier.”

How to Choose an API Solution

When selecting an API, a business must consider several factors, said Dolezal. First, it must evaluate whether the API works well with the company’s specific technology stack, needs, and use cases. Organizations should also check the API’s uptime history and performance metrics to ensure it is reliable and performs well according to their standards.

“Companies should also assess the API’s security features and ensure it complies with relevant standards,” he added. “Also, consider the API’s pricing structure and whether it fits your budget. Lastly, look for good-quality documentation and an active developer community as these are good indicators of a well-supported API.”

When it comes to choosing the right APIs for their projects, software developers and engineers need to understand the use cases for their APIs and the broader industry trends, according to Carlson. He said:

“The most straightforward answer is to simply pick the technology you think is best. This is a key factor, but it does not take long to realize that there are a lot of opinions about which one is ‘best.’ One thing I like to keep in mind is that the purpose of an API is to allow other programs to communicate with your program.”

Carlson explained:

“Choosing an amazing technology for an API stack may not be helpful if no one is calling it because it’s difficult to understand or program against.”

“Similarly, many process automation tools now have out-of-the-box capabilities to call REST APIs without having to write any code, which significantly increases the likelihood that your API will be consumed,” he added.

The Bottom Line

Whether you’re a small business owner or a developer, it’s critical to evaluate your requirements before you select an API.

It’s also important to understand the benefits and shortcomings of various API types and protocols. This enables you to tailor your API to suit your needs rather than adapting your strategy to accommodate a convenient or popular protocol.

FAQs