Reducing API costs by 50%
IBM achieves big productivity wins by implementing a centralized API management solution
Three software developers looking at screen

IBM communicates with hundreds of business partners using APIs that represent thousands of different business functions. The IBM Chief Information Officer (CIO) organization relied on the IBM API Connect® solution to build an enterprise-scale centralized API management system to manage API discovery and use and control access with a consolidated catalog.

The IBM CIO organization established its API Economy platform for the company in 2014 to provide a security-rich API hosting platform designed for continuous availability for use by IBM employees, customers and partners. The platform enables the creation, marketing, tracking and management of APIs for internal use and is built using IBM API Connect, an enterprise solution for centralized API management that stores APIs and their documentation. API Connect manages subscriptions via access credentials and has a consolidated API catalog.

Initially, the API Economy platform managed APIs for the IBM CIO organization exclusively. But over time, it evolved to support company-wide and third-party APIs. Currently, the platform supports two API services: Blue API, providing internal APIs for IBM business applications, and API Hub, providing IBM APIs for IBM clients and IBM Business Partners. When developers are building new applications, they’ll first check within an API catalog to find an API and subscribe to it. Once subscribed, they receive API keys, which are secret client IDs, to call the API.

API consumers use the API catalog and API documentation to find and use APIs, while API providers configure, test and publish APIs and documentation to the API catalog and the API configuration to the gateway.

“To have an effective API Economy, there needs to be a cultural shift at an organization level, more than just a technological shift. When a provider builds an API, rather than doing so at a project level, they should onboard it into a common catalog (like Blue API) for others to access and use,” says Kyle Frohling, manager of the API Hub for the IBM CIO organization. “Additionally, you need a dedicated team behind the API Connect service to ensure an effective transition to an API Economy. Due to the cultural shift, it takes guidance, process advocates and enablement to transition teams from one-off solutions to a centralized solution.”

Frohling adds that the developers taking advantage of the platform come from across all IBM organizations, globally. “You would think most developers understand APIs, but in practice, there are teams that are mature and that understand development and IBM practices, while others require API support,” he says. “As a result, there must be education and training material to provide guidance about the service, its value and how to get started. Interaction with the API development team early in the process is also key to adopting the right API practices. Another lesson learned is to make the API Connect solution as self-service as possible.”

3M–4M

API calls a month

> 50%

faster delivery time for enterprise solutions

The CIO established its API Economy platform for IBM in 2014, to provide a secure and continuously available API Hosting Platform for creating, marketing, tracking and managing APIs for IBM internal use and for use by our customers and partners. Kyle Frohling Manager—API Hub, CIO End to End Client Experience IBM
Improving efficiency and resilience

The IBM API Economy platform is a 24x7 service and keeping it constantly available in all situations is a top priority. In early 2023 the organization moved to the IBM API Connect Reserved Instance on IBM Cloud® approach from its previous on-prem hosted model, which allowed the team to reduce costs substantially.

“The Reserved Instance is in a single region across three availability zones—three physical data centers,” explains Frohling. “We could lose an entire building and it would continue to function because the other buildings would still have their own network connection, power or an API Connect instance. We have been a major influence on the reserved instance and how they operate. We are the biggest API Connect Reserved Instance on IBM Cloud user. They have been good at collaborating with us to evolve their service, to be more resilient and redundant, based on the experience we had with Kyndryl.”

The IBM CIO organization found a 50% reduction in the total cost of using a centralized enterprise solution, versus an individual project-based API management solution, by taking individual project costs and consolidating them into a central pool supporting a shared service. Using the centralized API management system, consumers browse, find and subscribe to APIs from a centralized API catalog. Providers can create, test and publish APIs with version and lifecycle management—all on a highly available platform with 24x7 support. The centralized API connect management system goes hand-in-hand with IBM’s productivity objective by using a standard service and reducing the amount of effort needed for support.

“We have also observed over 50% faster solution delivery time. Given our centralized internal catalog of 800 APIs, developers can quickly access it, review what is available and use the APIs versus trying to discover APIs manually,” says Frohling. “It is much quicker to put a solution together with existing APIs versus trying to build them yourself. Today, we process USD 14 billion a year in IBM revenue through our APIs as part of our Q2C [Quote to Cash] process.”

Frohling adds: “There is always hesitancy in leveraging a common service versus doing things yourself. We have made substantial progress, especially in CIO, but we need to keep improving the guidance and make it easy for developers to use this common service to gain value at an enterprise level. API reuse has a different impact at a project level. If every team supports their own solution, it is not just a matter of capital cost but total labor cost. Our alternative is to reinvest the labor cost associated with 300 projects and use a common solution, easily seen at an enterprise level but which is not always obvious at a project level. The value is obtained at the enterprise level.”

There is about 50% reduction in the total cost of ownership by using an enterprise solution, a centralized API Connect management system, versus an individual product-based API management solution. Kyle Frohling Manager—API Hub, CIO End to End Client Experience IBM
The numbers speak for themselves

IBM has also added customization and automation into the API life cycle management and publishing process, making it easier for providers to publish an API and its documentation into the gateway—resulting in huge wins for the company and its users.

“We currently support about 1,000 published APIs, 200 on API Hub and 800 on Blue API. Last year, we had 300 – 400 million API calls a month, approaching a steady state of 400 million,” says Frohling. “We are approaching 2,000 unique API consumers. About three to four new APIs are published monthly from any of 250 different teams. These numbers continue to grow every month.”

As for future enhancements to the platform, Frohling says: “We currently use the API Connect Reserved Instance service on IBM Cloud to host our platform and our customizations run on Cirrus, the CIO’s OpenShift hybrid cloud platform for internal workloads. We are working toward leveraging the IBM Cloud Pak for Integration on Cirrus. That will be a substantial effort for us but will allow us to move workloads to where they are most appropriate at any given time and contribute to cost savings by using an API Connect instance that is part of the IBM Cloud Pak for Integration on Cirrus.”

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About the IBM CIO organization

The Chief Information Officer (CIO) organization leads IBM’s internal IT strategy and is responsible for delivering, securing, modernizing and supporting the IT solutions that IBMers use to do their jobs every day.

The CIO strategy encompasses creating an adaptive IT platform that makes IT easier to access across the enterprise, accelerates problem-solving and serves as an innovation engine for IBM, catalyzing business growth.

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Produced in the United States of America, October 2023.

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