API Landscape

The API market took off mainly with players focused on the Ops (& Sec) persona, i.e., the API Gateway/API Management vendors. The primary use-case was B2B integrations, monetization, and essentially offering API-as-a-product. Gartner came up with their APIM Magic Quadrant and highlighted the traditional runtime/gateway players such as Apigee, MuleSoft, Axway, IBM, CA/Layer7, etc. Public cloud providers soon joined in the frenzy, with Google acquiring Apigee, and AWS and Azure providing their own APIM solutions. As the use-cases evolved to more internal APIs and distributed E-W APIs, the data plane also evolved into more form-factors such as distributed API gateways by vendors such as Kong, etc. and micro-gateways in the form of service mesh. API Security also emerged as an essential segment that started to see several start-ups and heavy venture investments. This segment is represented as the inner most circle in the below image.

On the other hand, there were a few players that focused on a different set of personas related to APIs, i.e. the Dev & the Architects. These vendors, mostly start-ups such as Postman, RapidAPI, SmartBear, Stoplight, etc. primarily focused on API testing, API spec management, API Design, etc.. Soon enough Gartner realized that the solutions on the Dev front are significant enough to not be excluded from the APIM MQ, and sure enough Postman and SmartBear appeared for the first time in Sept 2021 Gartner MQ, although they have nothing on the runtime/gateway front. This segment is represented as the outer most circle in the image below. Meanwhile, market consolidation and M&A continued on both sides, e.g. Kong acquiring Insomnia to cater to the API design and dev, RapidAPI acquiring Paw client, as well as RedHat acquiring 3scale (with RedHat itself being acquired by IBM), CA acquiring Layer7 (with CA itself getting acquired by Broadcom), Dell acquiring Boomi, etc..

Both these market segments today have several vendors and the total market size in both these segments is significant ($4.4B and $1.5B total by 2025). There is, however, another significant market ($1.5B by 2025) that brings these two ends of APIs together in a comprehensive & collaborative manner. And this is the ‘API collaboration layer’ (represented by the middle circle in the image). There is no established market leader yet, but vendors in both the Ops and Dev front are slowly moving into this space (e.g. Postman’s recent blog by their CEO). What these vendors have started to realize is that as the runtime and data plane starts to commoditize with almost no differentiation coming from one vendor offering to another, and where the competition is only about performance and scale, budgets are going to shift to the middle / collaboration layer.

This (i.e. collaboration layer) is, therefore, a white space where we can expect to see more players coming in to establish a leadership position. This will require integration and support for multiple API runtimes thereby accelerating the speed at which the data plane standardizes / commoditizes. There will also need to be several integrations with all the popular developer tools and offerings therefore ensuring that the developer behavior is not disrupted all of a sudden. Over time, there needs to be the go-to solution for end-to-end lifecycle implementation of APIs, across all stakeholders, for any enterprise.

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Below is a more detailed list of vendor in the different buckets mentioned above :