2024 Report

The State of API
Consumption
Management

Challenges & trends in consuming
Third-Party APIs

Introduction

We’re excited to present the inaugural report on API Consumption Management, which examines third-party API usage trends and the challenges companies face in 2024.

The API market has evolved tremendously in recent years, with a primary focus on ingress traffic and API providers. As API usage matures, and AI usage is soaring, software architecture needs to catch up. Consequently, more companies are becoming reliant on egress traffic and APIs, necessitating a more strategic approach to API consumption management and tools.

The results indicate that organizations aren’t prioritizing the strategic monitoring and management of their APIs, and they lack the appropriate tools to do so. As a result, too much time and effort are hidden in the everyday work of developers, with 36% of companies claiming they spend more time troubleshooting APIs than developing new features.

This report surveys over 200 companies, providing a snapshot of the state of API Consumption Management from the consumers’ point of view.

The results indicate that organizations fail to prioritize strategic  management of their APIs, and lack the appropriate tools to do so. As a result, too much time and effort are hidden in the everyday work of developers. Additionally, the complexity of maintaining third-party APIs often leads to security risks, hindered performance, and higher operational costs, underscoring the need for dedicated tools.

This report offers insights for refining third-party API governance and management strategies, examining the entire API journey. We hope these findings advance innovation in API management practices for the entire API community.

Eyal Solomon

CEO & Co-Founder of Lunar.dev

What you’ll find in this report

To gain better insights into the current trends shaping third-party API management consumption, we commissioned a survey of 200 software professionals and managers*. This survey aimed to clarify their current API usage, challenges, and priorities.

This survey report examines responses regarding:

  • Challenges in consuming and troubleshooting APIs.

  • Resources and developer productivity challenges.

  • Most consumed APIs by provider verticals.

* The survey is based on responses from decision makers in software engineering, including VPs of R&D, architects, senior developers, developer leads, development managers, senior engineers, integration engineers and platform engineers in companies from 100-1,000 Employees. All responses were collected during February 2024.

Key Findings

  • 01

    57% reported lacking the flexibility to scale their third-party API consumption as needed, as well as the lack of performance stability under varying loads.

  • 04

    88% of companies report that third-party API related issues require weekly attention. 33% reported requiring attention multiple times a week.

  • 02

    Companies lack a proper full journey API stack to deal with various complexities of third-party integrations and API consumption, and as a result patching several solutions or home-grown middleware.

  • 05

    60% of respondents reported spending too many weekly hours troubleshooting third-party API issues. 36% reported spending more time on troubleshooting than on developing new features.

  • 03

    66%  of companies may be exposed to security risks by under-prioritizing API management, as only 33% reported considering Third-Party API Maintenance and Optimization a "high Priority".

  • 06

    83% reported top methods to troubleshoot API issues are mainly around monitoring, overlooking optimization opportunities. 42% reported that the primary advantages of implementing optimization for API usage, regard cost-effectiveness.

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01
Teams reported the lack of flexibility to scale

Figure 1

Prominent Challenges When it Comes to Scaling API Consumption

Flexibility to scale up
or down as needed
57%
Performance stability under varying loads
55%
Data processing capabilities
38%
Ability to handle high traffic volumes
36%
Cost-effectiveness
of scaling
15%

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57% Report Scaling Flexibility is a challenge

When asked about the main challenges in scaling third-party APIs, over 50% of engineering teams cited performance, stability, and lack of scaling flexibility.

As products scale and consumption increases, more issues arise, particularly during peak traffic events. To handle these traffic surges, companies need greater flexibility, but they are often constrained by rate limits and costs.

While organizations are projected to increase their PaaS spending by 21.5% in 2024, interesting to see that cost-effectiveness of scaling was only reported by 15% as a barrier.

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According to the Treblle Survey of 2023, "The Anatomy of an API":

“Most problems with APIs happen on the client side. Based on HTTP response codes,
client-related errors occur 4x more often than server-related errors."

02
Companies opt for external solutions to manage integrations

Figure 2

How Companies Deal with Rate Limits or Exceeding Usage of Third-Party API

Fix the code in the service that originated the request
54%
Utilize an exiting code wrapper that handles external API calls
51%
We’ve developed a service that routes external API traffic from our services
40%
Rely on purchased external solution
40%
Rely on an open-source solution
8%

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Companies Patch API Rate Limit Solutions

Companies lack a proper full journey API consumption management tool, and as a result patch several solutions or home-grown middleware to deal with rate limits.

Respondents reported dealing with rate limit and usage problems using multiple solutions: developing ad hoc in-house fixes, building dedicated services, or modifying the code that originated the request (54%).

However, 40% of companies lack the proper tooling, time, or resources to prioritize internal solutions, leading them to explore external options for better API traffic visibility and control.
Only 8% rely on open-source solutions.

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Lack of Clear Ownership for API Management

When asked who resolves API integration issues, 36% of respondents pointed to the platform team, another 36% to the integration team, and 32% to application engineers. It seems that while platform and integration teams set the tone, engineering will implement it.

Many companies chose multiple options, including team leads, DevOps, and individual contributors, highlighting the lack of clear ownership.

API consumption impacts various areas, including product, business, and engineering productivity. In the future, building a comprehensive proactive API consumption strategy will require a clear owner.

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Figure 14

Internal Owner for Resolving API Integration Problems

Platform team
36%
Integration team
36%
Application Engineer
32%
Backend Engineer
26%
Senior Engineer
21%
DevOps Lead
19%
Architect
13%
Team Lead
10%
DevOps Engineer
8%
IC
3%
VP RnD
3%
Guild
3%

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03
Companies are at risk of unmanaged API consumption

Figure 3

Prioritizing Maintenance and Optimization of Existing Third-Party API Integrations

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66% O companies may be exposed to risks by under-prioritizing API management 

Companies that aren’t currently managing their third-party APIs effectively may be jeopardizing the performance of their product and consequently business performance as well. This lack of concern is perhaps why API10:2023 - Unsafe Consumption of APIs is now on the OWASP top ten.

95% of companies that currently integrate third-party APIs in their products consider the maintenance and optimization of these integrations either a moderate (62%), or high (28%) suggesting that although most consider it a priority, some may not be prioritizing it sufficiently.

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“By using APIs companies can innovate faster and narrow their focus to core business logic. It’s clear that developers today rely heavily on APIs - and with those benefits come challenges. This survey clearly shows that as API consumption scales - cost, performance, security and reliability become hard to manage. It is clear new components are required to navigate the API consumption jungle.”

Iddo Gino

ounder of RapidAPI, Developer Tools Advisor and Investor

04
Top challenges concerning consumption management

Figure 4

Top Concern Related to Caching, Throttling, and Delayed Queues for Managing Third-Party APIs

Scalability Challenges
29%
Integration Complexity
23%
Maintenance Costs
20%
Security & Compliance issues
11%
Internal skills gap
10%
RnD Time velocity
7%

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29% Report Scalability Challenges as a Top Concern Related to Troubleshooting

The top concerns for engineering teams around troubleshooting - caching, throttling, and delayed queue to manage integrations, are scalability challenges (29%), integration complexity (23%) and maintenance costs (20%).

Of those that require attention once a week the majority are using APIs related to retail & eCommerce (80%), travel & hospitality (66%), advertising (65%) and financial services (51%).

88% of companies encounter problems with third-
party APIs that require troubleshooting on a weeklybasis (Figure 5), either once a week (54%), a few
times a week (33%) or on a daily basis (1%).

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Figure 5

Frequency of Troubleshooting
Third-Party API Issues

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Figure 6

Troubleshooting Required “Once a Week” by most heavily Used APIs

Retail and
eCommerce APIs
80%
Travel and Hospitality APIs
66%
Advertising APIs
65%
Financial Service APIs
51%

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05
Too much time spent on troubleshooting API integrations

Figure 7

Effort Devoted to Developing New Features versus Troubleshooting

Slightly more on troubleshooting API issues
36%
Slightly more on developing new features
30%
About the same time on both
30%
Significantly more on troubleshooting API issues than on developing new features
2%
Significantly more on developing new features than on troubleshooting API issues
2%

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36% of companies allocated more effort towards troubleshooting API issues than developing new features

When asked to compare their efforts on troubleshooting API issues versus developing new features over the past year, 36% of companies focused slightly more on troubleshooting, 30% focused slightly more on development, and 30% allocated equal effort to both.

This highlights the need for robust API consumption management and monitoring to reduce troubleshooting efforts and boost development productivity, allowing more time for feature development and product improvement.

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60% of Companies Spent Too Many Hours  Troubleshooting

60% Of respondents, reported that their companies are spending too many hours per week on troubleshooting third-party API issues, suggesting that for most companies, integrating third-party APIs is not as straightforward and hassle-free as it should be.

It therefore stands to reason they could free up the time wasted on troubleshooting and spend it on innovation.

This shows a need for a robust solution to streamline managing and optimizing their third-party API usage as they scale.

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Figure 8

Time Spent on Troubleshooting
Third-Party APIs

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06
Top solutions: monitoring vs.optimizing performance

Figure 11

Top Solutions Currently in Use

API managment
35%
API Gateways
17%
Resiliency library
14%
IPaaS
14%
Proxy (Squid,nginx)
14%
ServiceMesh
6%

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35% of Companies use API Management Tools (for ingress not egress traffic)

The top solutions companies are currently using include API management (35%), followed by API Gateways (17%).

These solutions focus on ingress traffic controls for the provider side, while Service Meshes focus on connectivity between services. It seems, therefore, that current tech stacks include solutions that are not focused on API egress controls, and that those that do offer them, do so merely as a feature rather than as a primary focus.

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38% of Companies Focus on End-point Monitoring

The top methods reported used to troubleshoot and maintain third-party APIs in the past year (Figure 9): Endpoint performance monitoring (38%), costs limitations/monitoring (35%) and monitoring breaking changes (34%).

Based on these findings, it seems that the majority of companies are not sufficiently ensuring they have proper visibility and monitoring of their third-party APIs.

When looking at the breakdown of respondents who identified load balancing across providers/ accounts/ tokens as a top method (Figure 10), individual contributors and managers mentioned this method at a much higher rate (31%) than directors (14%) and VPs (13%), pointing to it as an effective solution more than the executives who don’t deal with troubleshooting themselves.

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Figure 9

Top Methods Used to Troubleshoot and Maintain Third-Party APIs in the Past Year

Endpoint performance monitoring
38%
Costs limitations/monitoring
35%
Monitoring breaking changes
34%
General visibility of API traffic content
34%
Orchestration across services
20%
Prioritization queue
17%
Load balancing across providers/accounts/tokens
17%
Delayed queue
16%
Specific logs/metrics/traces
16%
Caching
15%
Unified retry logic
14%
Throttling/ rate limiting
13%
Figure 10

Load Balancing across providers/accounts/tokens by Job Seniority

Individual contributor + Manager
31%
Director
14%
VP
13%

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Figure 11

Top Solution Methods used:

Monitoring Related
83%
Rate Limiting and
Queue Management
38%
Service Management
and Orchestration
33%
Error Handling
and Retry Logic
13%
Caching
13%
General and Misc
0.05%

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Monitoring solutions clearly out-win all others

83% reported top methods to troubleshoot API issues are mainly around monitoring, overlooking optimization opportunities. The top advantage identified by respondents suggests there is a rise both in awareness and urgency for managing third-party APIs cost effectively.

Interestingly, 38% of respondents use rate limiting and queue management techniques, indicating a moderate focus on managing API traffic compared to the monitoring related solutions. But, without integrating these methods with robust error handling, their effectiveness might be limited.

Looking forward, as API integrations become more complex, it’s likely that companies will need to balance their strategies. Incorporating more preventative measures alongside monitoring could lead to fewer disruptions and more resilient API systems. This shift will require further investment in advanced API management tools and education.

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42% Report Cost-effectiveness is the Primary Advantage of Optimization

The top advantage identified by respondents suggests there is a rise both in awareness and urgency for managing third-party APIs cost effectively.

The primary advantages of implementing optimization techniques such as caching, throttling, and delayed queue for managing third-party APIs include cost-effectiveness (42%), faster response to organizational needs (35%) and improved integration with existing systems (29%).

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Figure 12

Primary Advantages of Optimization Through Caching, Throttling, and Delayed Queue for Managing Third - Party APIs

Cost - effectiveness
42%
Faster response to organizational needs
35%
Improved integration with existing systems
29%
Reduced dependence on external providers
29%
Greater control over customization and features
28%
Enhanced security and data privacy
24%

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Bill Doerrfeld, Editor in Chief for Nordic APIs stresses the importance of looking at the entire API journey end to end:

“As the API economy matures, it will be interesting to see how this new category of API consumption management evolves to enhance and streamline software development. I recommend technology leaders keep an eye on this evolving space to learn the practices required to finally see the entire API journey.”
Figure 13

Confidence in the Ability of Advanced API Management Tools to Reduce Overhead Costs

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Unlocking Smart Cost-effectivness

We asked respondents, to what extent they agree or disagree with the notion, that since advanced API management tools help manage errors in production – having access to such tools could significantly reduce their overhead costs.

Although almost half of the respondents (47%) somewhat agree with this statement, only 6% strongly agree. This may be an indication that a significant portion of companies are not confident that existing API management solutions in the market (which are mostly associated with ingress management for the APIs companies provide) would help to reduce their overhead costs of third-party API consumption.

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Recommendations

API Consumption Management built for Scale and the AI Era.

The following are recommendations for scaling companies based on the findings in this report

  • Streamline monitoring and maintenance:
    To reduce time spent fixing API integrations, organizations must develop a comprehensive egress API consumption strategy, mirroring the existing inbound API security practices.

  • Gain flexibility: 
    To scale API consumption flexibly as needed, organizations must implement a centralized control plane for managing and governing all outbound data traffic. This must be done to increase awareness of third-party API consumption with minimal footprint.

  • Once and for every end-point:
    Evaluate and implement tactics for optimizing API usage like caching, client-side rate limiting, and circuit breaker implementations for existing and future integrations with API Consumption tools.

  • Cost-effectiveness is seen as a top advantage: Organizations should consider investing in egress management tools to gain visibility into patterns to optimize costs and identify potential bottlenecks.

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Share the 2024 Status of API Consumption Management

The discussion and researched information around API Consumption Management is still in its early days though it impacts many companies.

By sharing this report, you contribute to the conversation around third-party API challenges and trends, empowering more professionals to make informed decisions. Together, we can drive innovation and efficiency in the industry.

Here are a number of tweets you can use to share the survey:

  • Dive into the 2024 State of API Consumption Management report! Uncover the latest trends and challenges in consuming third-party APIs. Download it now and stay ahead of the curve! #APIManagement #TechTrends

  • Read the 2024 State of API Consumption Management report. Essential insights for anyone dealing with third-party APIs. Check it out! #APIs #TechInsights

  • 🚀 The 2024 API Consumption Management report is here! Get the lowdown on key trends and challenges. A must-read for tech professionals. #TechReport #Innovation

Methodology

To get more insight into current trends shaping
third-party API management, we commissioned a survey of 200 software professionals administered by an independent global research firm.

The survey is based on responses from decision makers in software engineering, including VPs of R&D, architects, senior developers, developer leads, development managers, senior engineers, integration engineers and platform engineers.

Respondents hailed from companies in the US (80%), UK (10%), Germany (5%) and Scandinavia (5%), ranging in size from 100-1,000 Employees, or with R&D teams of 50-500 developers.

All responses were collected during February 2024.

Demographics

Country, Industry, Company Size and Job Seniority

Participants Breakdown by

Industry

Education
13%
Retail& eCommerce
13%
Software Development
10%
Travel % Hospitality
10%
Financial Services
9%
Information Technology
9%
Transport & Logistics
8%
Transport & Pharma
5%
Insurance
3%
Manufacturing
3%
Media
3%
Agriculture & Mining
3%
Banking
3%
Telecom
3%
Construction
1%
Energy & Utilities
1%
Food
1%
Professional Services
1%
Public Services
1%

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API Consumption Breakdown by

Most Used Types of APIs

Advertising APIs
48%
Travel & Hospitality APIs
20%
Financial Services APIs
20%
Retail & eCommerce APIs
17%
IT products APIs
16%
Transport & Logistics APIs
15%
CRM APIs
13%
Messaging APIs
12%
Insurance APIs
7%
HR- tech APIs
7%
Open banking APIs
5%
AI/LLMsAPIs
3%
Cloud providers
3%
Other
1%

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Figure 15

Industry

United States
76%
United Kingdom
11%
Germany
6%
Sweden
3%
Denemark
2%
Norway
2%
Figure 17

Company Size (of people)

2%
100-
199
35%
200-
499
59%
500-
999
3%
1,000-
4,999

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Figure 18

Job Seniority

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Figure 20

Number of Developers

1%
26-49
18%
50-100
30%
100-49
37%
150-300
14%
300-500

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Figure 21

Company's Approach to Application and Deployment

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Third-Party APIs Used in Production Environment

Figure 22

Transport & Logistics APIs

Google Maps Platform
78%
HERE Technologies
52%
Mapbox
33%
ShipEngine
33%
FourKites
26%

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Figure 23

Travel & Hospitality APIs

Google Travel Platform
80%
Booking.com
63%
Google Maps
57%
Expedia Group
37%
Sabre
17%
Amadeus
11%

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Figure 24

Retail & eCommerce APIs

Google Maps Platform
70%
HERE Technologies
57%
Mapbox
53%
ShipEngine
50%
FourKites
3%

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Figure 25

Insurance APIs

Insurity
75%
Cover API
67%
Cape Analytics
58%
SureQuote
42%
Lexis Nexis Risk Solutions
33%

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Figure 26

Financial Services APIs

PayPal
89%
Stripe
57%
Finicity
49%
Intuit
34%
Plaid
26%

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Figure 27

AI/LLMs APIs

Amazon AI Services
83%
Open AI
83%
Google Cloud AI Platform
67%
Microsoft Azure Cognitive Services
50%
IBM Watson
33%
Claude
17%
Cohere
17%

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Figure 28

CRM APIs

Salesforce
83%
Zoho CRM
50%
HubSpot
46%
Microsoft Dynamics 365
42%

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Figure 29

HR-tech APIs

Workday
83%
BambooHR
58%
Zenefits
42%
Namely
42%
Greenhouse
8%

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Figure 30

Messaging APIs

Twilio
71%
Nexmo
62%
Sinch
43%
Facebook Messenger
24%
Plivo
19%

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Figure 31

Advertising APIs

Google Ads API
75%
Facebook Marketing API
58%
Amazon Advertising API
49%
Twitter API
11%
Bing Ads API
6%

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Figure 32

Open Banking APIs

Partner APIs
89%
Plaid
33%
Finicity
33%

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Lunar.dev offers a full management suite to monitor and optimize usage of any third-party API. Its reverse-API proxy enables full L7 visibility and advanced controls for every API.

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