Trend 3 API consumption - API Economy Trends for 2025

More organisations are making use of APIs from external sources than ever before. 

And an ever-expanding suite of APIs is available to choose from. These APIs offer direct functionalities or access to datasets and are used as components that help the API user (that is, the API consumer) build out their digital product (or automated workflow) to enable transactions or tasks to be performed. For example, instead of a business building direct capabilities into their website or app to enable customers to make payments, they integrate a payments API to provide that functionality.

These APIs are often referred to as product-as-an-API, or Product APIs, as they are sold as complete products, each with user guides, resources, service level agreements, pricing, and so on.  API consumers then integrate these APIs into their value chains, pay for them accordingly, and access support when things don't work as intended.

2024 observed trend: API consumption increases in importance while API product management undergoes rethink

Throughout 2024, however, there was a key contradiction in the management of these Product APIs: while use continued to grow as they became increasingly essential components in the digital value chains of API consumers, some API providers themselves were investing less in the developer relations and product management teams that supported adoption and use.

By the end of 2024, this had impacted on the API providers enough that they were cautiously returning to reinvestment in developer relations and product management, but with new expectations for these roles. It is unclear, however, if API providers really understand the potential of their API offerings and how to build teams that can offer them as products. And API consumers are not pushing back enough to argue that poor API product management has become a business risk for them^1. We expect some shifts in 2025 to address this contradiction as stakeholders seek a new balance.

Consumption demand of APIs

According to Gartner, 71% of digital businesses they surveyed are consuming APIs created by third parties. These create a security and complexity risk that will grow with the inclusion of AI-related integrations. New tooling is needed to help manage these external components alongside internal API tools (see API Economy Trend 2). Consumption gateways from services like lunar.dev, Kong, and Portkey are emerging as one new mechanism to provide greater management over external APIs used in internal production use cases.

The landscape of API products

The API Landscape from apidays currently lists  Product APIs across a range of industry sectors.

How do API product providers support external developers?

API Providers that invest in developer relations and product managers regularly create content to support adoption and to assist paying API consumers to solve their challenges. Industry leaders like Kristen Womack and Taylor Barnett-Torabi demonstrate examples of how product managers and developer relations leads create content that supports API consumers in their video content, for example.

Tools providers that focus on API developer relations like Strapi are communicating upcoming changes for developers like in this post by Theodore Kelechukwu Onyejiaku and by publishing developer-focused content from lead developers like Miracle Onyenma.

API expert Bruno Pedro has written a book on API product management and thought leaders and product manager experts like Emmanuel Paraskakis regularly share best practices for API product management, like this top 15 hints list on his LinkedIn page:

AI for API consumption

One of the holy grails of API consumption management has been the idea of swapping out API usage based on pricing to deliver the best service at the best price point. The go-to example tends to be email API providers. API consumers may want to use a cheaper bulk email API service for marketing emails, but a higher per-send priced email API for high-value customers or to send legal and regulatory notices.  (Although in lunar.dev's API consumption survey in 2024, only 15% of survey respondents identified cost-effectiveness as a key issue in API consumption. Of those, 57% wanted the flexibility to scale their API consumption up and down as needed.)

AI-enhanced API workflows could potentially be built for this type of use case².

Potentially, agentic AI could also be used to assist internal developer relations teams and customer support to know where to look in the API provider's knowledge base when responding to API consumer queries, or could pre-empt what content needs to be developed by identifying the most common error messages or issues raised by current developers. Last year, for example, APIMatic released an AI Copilot feature aimed at supporting developers more quickly navigate documentation, access code snippets and so on³. From a business point of view, AI might help identify what premium APIs are being underused by customers and could possibly assist in identifying use cases and content development needs to encourage consumers to take advantage of these functionalities.  Abhijit Dey, VP at Axis Bank, and a leader on APIs for open banking recently wrote a post describing how AI can enhance the work of product managers in four key ways: by fostering innovation and creativity, by encouraging a human-centric approach, facilitating cross-disciplinary collaboration and leading the evolution of tools.

Even without AI support, customer success roles could aim at supporting consumers to identify new value opportunities from greater use of APIs. This doesn't always have to be from a "do you want fries with that?" upsell mindset. One challenge with Product APIs is that they expose a specific set of functionalities that make sense from a domain design perspective. But use cases might need APIs across multiple domains to enable a complete workflow. We are seeing a little of this approach taken in open banking now that lead banks are monetising their corporate APIs. There is more work to do for banks in skilling up the corporate account managers to understand how to sell APIs, but in our conversations some are working with their corporate customers to describe the functionalities of APIs and encourage use.

New tooling to support API consumption: workflow management

New tooling to support API workflows and assist API consumers to weave together functionality across multiple APIs is emerging. Specifications and standards are also doing their part: the OpenAPI Initiative's Arrazzo specification for example, and related tooling already blooming around this spec, enables this kind of daisy-chaining of multiple APIs into one workflow⁴. API providers are also addressing these  workflow needs. Adyen is leveraging Postman to enable workflow management. And as part of our Open Banking/Open Finance Quarterly Trends report, we track a growing number of leadership banks that have included pages in their developer portals that describe, for a given use case, which endpoints in which APIs would be needed as part of the workflow.

Business impact of API consumption

According to the 2024 lunar.dev API consumer survey which surveyed 200 companies, 36% of companies report that they spend more time troubleshooting APIs than developing new features.

More than 50% of survey respondents are troubleshooting APIs in retail/ecommerce, travel/hospitality, advertising and financial services. 60% of companies claim they spend too much time troubleshooting APIs (averaging 1-2 hours a week). Additionally, 88% of companies report troubleshooting API issues on a weekly basis, with 33% documenting issues a few times a week. This equates to paying for the API at least twice: once to access the functionalities, and equivalent of 2-3 weeks additional developer time a year (not including the lost productivity from task switching) to maintain the API internally.   

The contradiction in not supporting dev relations, product managers and customer success roles

While this reliance on external APIs has grown, some tech businesses have gone through a period of staff layoffs. In the Developer Relations Agency survey in 2024, of the 310 surveyed, 18% said their organisations had lost dev relations members due to lay offs, while 12% expect team sizes to shrink in the future. 

Across 2024, TechCrunch tally more than 150,000 tech workers laid off by 542 companies. This has occurred while many complain of the deterioration of the user quality of apps and digital services, including API quality.

We have argued, and raised this point in keynotes over the past several years, that these layoffs are immoral. For the past ten years, in the tech industry, many of us have given complicit approval of ever-increasing founder and C-level pay increases, that are now completely perverse. Forbes, citing the Economic Policy Institute non-bipartisan thinktank, reported in December 2024:

"In 2023, chief executives earned 290 times the salary of an average worker, a significant increase compared to 1965, when their compensation was only 21 times that of a typical employee."

Many developers and other workers went along with this, definitely we all as a society did not push back, and I believe there were two reasons for this: 

• The myth of the entrepreneur: where we don't push back on this type of wage inequality because many of us covet that maybe one day we can turn our side hustle or business into one of those scaling companies where we can extract that kind of salary. 
• The social contract between employers and employees: I think just a big driver was an implicit social contract where we all looked the other way to these gross overpayments in return for job security and having regular employment. Last year saw many larger tech companies break that implicit promise: Stripe, Spotify, eBay, Google, and others all let staff go, including developers, developer relation teams and product managers, even though their profits were increasing. Forbes estimates Patrick Collison, cofounder of Stripe and CEO as worth $7.2 billion, for example. This year, while they have said they plan to grow headcount by 17% (which may be PR misdirect, it will be interesting to see if TechCrunch or anyone else follows up on this claim later in the year), for now Stripe are laying off 300 workers in January 2025, including from product roles. Those 300 workers have helped contribute to Stripe's success. Why can't they be supported through retraining to be ready for that 17% headcount growth or be supported to become independent contractors specialising in API integration success, for example, working with Stripe customers to make best use of the Stripe APIs? Investing in these staff through these changes would not even reduce Collison's worth by any noticeable amount. All other changes being equal, if Collison personally invested in that outcome, I imagine it would be no more than $100 million at maximum, his end worth would still be $7.2 billion⁵.

Earlier this year, workers in other industries have been able to fight back against planned closures and retrenchments leading to company leadership to reinvest in workers and expand their operations. In Detroit, workers and consumers have fought back and managed to gain commitments to reopen factory plants and commit to the building of new factories, generating new employment growth rather than retrenchments. Last year in the United States, the Automotive Workers Union, was able to not only reverse decisions to close some plants but also expanded factories and built-in retraining and hiring processes so that those working in unprofitable or outdated areas of the industry were offered retraining and shifting to new areas of work. In 2023, the Writers Guild of America were able to secure new commitments amid the increasing use of AI.

There is no reason that could not have happened with tech companies, and supporting product management roles is one area that could occur. Weirdly, it is some of the largest tech companies that are taking the retrenchment route, while API product management in other industries, including banks, healthcare, agriculture, sustainability data, telecommunications, and other industries is growing as these business models adapt to selling APIs and fostering their ecosystems. This could be the next competitive advantage for smaller and sector-specific players (what Jennifer Riggins calls "accidental tech companies"): while larger tech focus on return to shareholders and C-suite salaries, smaller companies and sector-specific API providers could win new market shares by providing quality API products.

There is growing recognition of the need for product management and developer relations work. The Developer Relations Agency saw an increase amongst those who knew their budget allocation, with 13% of survey respondents indicating a budget between $100K-500K, with 53% indictaing their budget will remain the same or increase in 2025.

In the second half of 2024, there were also a few signs of hope for API developer relations. Matthew Reinbold's tracking of API positions vacant advertised throughout 2024 found increases in product management and developer evangelist positions, in the second half of 2024, for example.

There is no doubt that API product management and developer relations may require a shift in some approaches. According to the Developer relations agency, one-third of all developers do not audit their developer experience, and 47.4% of developers craft their own SDKs rather than use well-developed industry tools that are widely available. Product management may also require some rethinking, leading to an increase in the recent emergence of books like Bruno Pedro's and training programs like API Masters which seek to provide core skills and alter industry roles in API consumption support.

The ways that API consumers are troubleshooting issues with their APIs indicate opportunities to improve existing tooling, create new API consumption tools and enhance API provider practices.

For example, lunar.dev's study found 38% of companies focusing on endpoint monitoring, 35% tracking costs, and 34% monitoring breaking changes. These finding suggest the need for new tooling or features that assist API consumers to gain greater observability of their third-party API usage.

2025 predictions

Developer relations and API product management roles will go through some shifts to become more specific in the way they provide support and show impact as a swing back to supporting API consumption of API products grows. There will be a growing range of training programs targeting developer relations and product managers to ensure they are creating and tracking the business value they generate. In specific sectors, including banking and health, we expect to see customer sales support and account roles to start supporting customers to make use of their APIs in new ways. AI usage will increase amongst developer relations and product managers, but those that are best able to leverage AI will be those who use it to analyse data and identify opportunities to strengthen customer relations, not those who try and use AI to create content directly. 

Next steps in managing API consumption

If you are consuming multiple APIs for production use cases, including internal automation workflows, consider use of API consumption gateways to help you manage your third party APIs. Consider working with other API consumers to ensure API providers are offering the types of supports that do not increase your developer costs for troubleshooting the APIs you are already paying for. Share data on the costs of your API consumption integrations with API providers and more widely to ensure API providers create quality APIs for consumption.

For API providers, re-evaluate the impact you want your developer relations and API product managers to have on your business. Set new metrics for what you expect from how teams support API consumers. Consider how AI can help you support your developer relations and product management teams. Look to differentiate from big tech and larger API providers by offering higher quality APIs with better support.

For API tools providers, focus promotional efforts on explaining how your tooling can better support consumption of APIs. Review the lunar.dev survey, especially the final sections to identify opportunities for new product features focused on consumption.