Apigee CEO sees a booming API Economy

Chet Kapoor of API management firm Apigee says all companies will need to digitise more and faster

A quite recent buzz-phrase added to the IT lexicon is “The API Economy”. Cheerleaders of digitally-led change hail it as the real-time exchange of data via application programming interfaces to fuel insight, transactions and communications.

Love it or loathe it as a term, there’s no disputing that it’s changing business and Chet Kapoor, CEO of Apigee (see what they did there?) is at the heart of the action. His 11-year-old, Palo Alto-headquartered company went public in April this year and is seen as a leader in managing APIs.

So why all the fuss?

“Every business needs to be a digital business and if it does not become a digital business it will become extinct,” Kapoor tells me. “That’s true of everything from music and media all the way through to mining because customers, partners and employees want to interact with connected experiences much like they do in their personal lives, and that hasn’t happened on the business side.”

Unless companies operate faster they will be squished by smarter rivals and the only way to operate at optimal speed is by having software components talk to software components with us dumb human beings keeping out of the way most of the time.

“Capitalism doesn’t have to change its character but the way it interacts has to be different,” Kapoor says. “Business has to work at app-store speed but the old will never get you the new so you have to build a system of engagement.”


The Uber effect

Kapoor says that “oil tanker” businesses with big turning circles will experience what digital-native car services like Uber are doing to the mainstream taxi business.

“To not get Uber-ised by some new upstart you will have to leverage what you’re good at. Every business will be a digital business and an API-based business. The disruption is not just in technology but in the three Cs: culture, community and code.”

Kapoor is an integration veteran having served companies like WebMethods and BEA Systems, the company that was once known as “the operating system of the web”. But he says the old model for integration no longer serves.

“This is different. The internet does not run on a bus, nor does it run on a broker and the reason it doesn’t is because of the sheer scale of the internet today. And the scale of the internet today will be small potatoes compared to the internet of the future with [emerging trends] like the Internet of Things.”

Increasingly, companies will need to automate pretty well everything, Kapoor believes.

“You can’t transact and learn and put everything in a data lake and analyse it: you have to do it all in one cycle because for some of our customers information that is even 15 minutes old is too old.”

This change will make developers the new organisational stars.

“If software is going to take over the world, developers will make that happen. Developers used to rule and then all of a sudden they stopped. We’re not confused: we know what pays your pay cheques comes from today’s customers, but the future is digital and the pace at which [organisations are] paying attention to developers is not moving fast enough. They don’t realise how disruptive all this will be.”

Kapoor is convinced that the sudden declines of companies like Nokia, BlackBerry and Blockbuster will occur again and even faster, and the only solution will be rapid development and change management.

He describes Apigee as a platform player and maker of the new economy’s digital picks and shovels but sees more opportunities to “go up the stack to lead by example”, applying the API management platform to business analytics, security and more.

He’s also suspicious of the notion - rampant since Dell agreed to buy EMC - that the world will move to a smaller number of IT power players operating at massive scale.

“It’s obvious easier for an enterprise to buy from one large company than 17 companies but the spend that enterprises have with large vendors is actually decreasing,” he contends.

Kapoor is also sceptical of the idea that a bright company today seeking to innovate will go to one of the giants for help.

Apigee might be “inside the tornado” of change but that hasn’t made it resistant to some buffeting on the stock market. However, Kapoor sees other advantages of being a public company.

“The markets have gone through a tough time,” he says. “We raised money but there are other ways to raise money and everyone at Apigee can now draw a straight line to the metrics we publish every quarter.”


Working with Steve Jobs

Raised in Kolkata, India, Kapoor came to the US’s west coast aged 18 and he says that affords some useful perspective for Apigee.

“We run it like a global company and the advantage of being brought up in India and [coming to] the US is we think globally and act locally.”

Seventy Apigee staff are located in Bangalore and London is also becoming a sizeable hub.

Early in his career Kapoor worked for NeXT Systems and he jokes that although he sat just 20 yards away from Steve Jobs he was really the gopher “who got coffee for the guy who made his coffee”.

He was one of a handful of college kids at NeXT and the “phenomenal experience” taught him a lesson in mentoring: find a set of people that you want to go work for and then pay them to hire you because your first two to four years is going to steer your career.

“I grew up with Bill Gates at Microsoft and Steve Jobs and [the journalist-turned-VC] Stewart Alsop said Gates gave people what they wanted and Jobs gave people what they needed.”

He says that it’s wrong to try and copy any company’s thinking though:

“Absolutely not! We go out of our way not to emulate - you have to clear your own path.”

But one lesson remains.

“You need to love the problem you’re solving, the people you’re doing it with, and have fun doing it. Then you have a shot at making a difference.”