The API Economy Meets the Agile Enterprise – and Why We’re Acquiring Layer 7 Technologies

Last week CA Technologies announced its intent to acquire Layer 7 Technologies, a global leader in Application Programming Interface (API) management and security.


I’m personally very excited about this acquisition and the value the Layer 7 business will bring to our company and our customers. Layer 7 is named a leader in The Forrester WaveTM: API Management Platforms, Q1 2013*.  It also is the only API management vendor to have been named to Deloitte’s Fast 500 list of fastest growing companies in both 2011 and 2012. Layer 7 is a successful, growing business with differentiated, market-leading technology that’s highly complementary to our existing offerings. We believe we can scale the business even faster than Layer 7 is growing today and generate lift for our existing businesses in the process. Especially exciting to me is this: with the Layer 7 technology in our portfolio, CA Technologies is in the best position to manage and secure a whole new market and business model for some of the largest organizations in the world.


APIs are protocols that allow software applications or parts of applications to communicate with one another – and yes, they’ve been around for as long as there’s been programming. Over the past few years, however, there’s been an explosion in the quantity of APIs as the reliability of network technology has improved, giving rise to cloud-based applications, mobile device use and demand for mobile apps. In the mobile world alone, IT analysts are predicting that over a billion advanced smartphones and tablets are going to be bought worldwide next year, and all of these devices will be hammering against APIs to access various applications and data.


There were over 8,000 APIs available to consume over the public internet as of December, double the number just a year earlier. APIs are becoming critical to the business models of companies such as Google, Facebook, Amazon, Twitter, and Netflix, generating substantial amounts of revenue and yielding valuable strategic control points. APIs are becoming the medium of exchange of the new economy, and Layer 7 is a leader in enterprise-grade API management and security.


In addition – other organizations recognize the potential of the API economy. Intel recently bought Mashery in an attempt to bolster its position in the market. You can read Dimitri Sirota’s take on that deal here. Dimitri is a co-founder and chief strategy and marketing officer for Layer 7.


The rise of the API economy has created a new revenue channel for many businesses, allowing them to externalize and deliver valuable data, content, and services that can be leveraged by others in creating new applications that often serve a whole new set of customers.


The Layer 7 technology lets companies wrap existing application components with APIs and then share those components as well as to expose new capability through APIs. It handles the security of the APIs themselves, orchestrates the management of the API requests that are flooding in, and allows you to recruit and cultivate a robust ecosystem of external developers, encouraging the developers to use your newly exposed APIs.


For an application owner, exposing technology via industrial strength APIs has several immediate benefits. It disconnects the base functionality of the wrapped application from the function that’s being delivered to the end customer — whether a request is coming from an application in another part of your organization, or coming in from a customer using a mobile device. It also makes it easier to swap out technology, and to move workload components between on-premise systems and cloud-based systems, as long as the API instructions remain the same. 


Even if you want to keep functionality accessible only to employees and internal systems, there are still compelling reasons to leverage APIs as a core architectural design point. Amazon, for example, exposes a substantial percentage of its internal systems as APIs to others within the company. If a team at Amazon is building an application that needs to handle online payment processing, it knows that there’s likely an internal API available. This discipline of exposing everything – even internal function — as an API has been one of Amazon’s major competitive differentiators and is one of the reasons the company has been so successful in growing Amazon Web Services.


Using APIs in enterprise applications is not simple, and it opens the enterprise up to a range of new risks. Layer 7 not only makes it much easier to expose applications as APIs, it also specializes in managing the associated risks. Organizations from around the world have used Layer 7 solutions to join the API economy, including Best Buy, Cisco, Adobe, Lilly, and Northern Trust. CA Technologies uses Layer 7 for our own APIs, so we know first-hand the power of the technology. For our customers and partners, Layer 7 solutions are a natural complement to the market-leading CA SiteMinder and CA CloudMinder franchises, which are widely used today by enterprises to secure access to internally and externally facing web applications.


Layer 7 will also become an important part of our DevOps story. Back in 2011, CA Technologies acquired a company called ITKO, which had a killer application for DevOps called LISA. LISA scans your environment to analyze the behavior of all of the pieces of the application and all of the other systems from 3rd parties that the application needs to interact with in production. Then it creates a simulated version of all of those application pieces, allowing the various development teams, all working in parallel, to simulate the behavior of all of the other pieces, whether those pieces are internal systems or third party systems exposed via API. Once the application is released to deployment, managing the API information-what the application has to do when it receives an API call, and what developers need to know to use the updated API-can be handled by Layer 7.


The API economy is reshaping the business models of large and small enterprises across all industries. Not only will Layer 7 allow us to take advantage of this tremendous secular growth opportunity, it will also give us an invaluable strategic position as the go-to vendor for the management and security of the next-generation of applications.


* The Forrester WaveTM: API Management Platforms, Q1 2013, Forrester Research, Inc., Feb. 5, 2013.

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Lonne Jaffe

On March 15, 2012, Lonne Jaffe joined CA Technologies as the senior vice president for corporate strategy. In this role, Lonne is responsible for the development of the CA Technologies long-term strategic objectives, for the analysis of trends and new developments in technology, and for providing guidance to the business to ensure the success of the company’s strategic initiatives. Lonne joins CA Technologies following over a decade of experience at IBM. Most recently, he was vice president of strategy in the IBM software group, where he led new acquisition-related and organic growth initiatives and product strategy for a division with more than $5 billion in annual revenue. In addition, Lonne led four IBM acquisitions in 2011. His previous assignments at IBM include: director of mergers & acquisitions in IBM software; and director of public sector software, where he oversaw the company’s multi-billion dollar software business for the government, healthcare, education, and life sciences industries, including M&A, software product development, sales, marketing, and business development. Lonne also served as the head of IBM’s U.S. Federal software services business unit. Prior to IBM, he worked at Goldman Sachs, Sony, Corporate Decisions, Inc., and Microsoft. Lonne holds undergraduate and advanced degrees from Harvard University.

This article has 4 comments

  1. Hello Lonne,

    Thank you for highlighting the API arena state and challenges, as well as the basis for Layer7 lead position in this playground.

    Your article has reminded me of a perception I have been looking into for some time:

    I believe that we gained market share and leadership in the IT Management sphere by combining and integrating many comprehensive solutions into big-bulk suite(s).

    Looking at the APP market (and following your article, the API market as well) I feel there is a signal that points to a new perception.

    Possibly the next winners in the IT Management arena will be those who pick, slice and match the big challenges into chunks of smaller yet directed solutions (in the form of small apps).

    So instead of software suites that can do many things, you would have specialized smaller apps that take care of specific repetitive tasks and serve specific roles.

    The winner in this imaginary new category will be able to quickly carve small chunk apps as well as mix and match small apps into a-bit-bigger app, when the need arises.

    All this would be dependent on a simple secure engine and standards APIs that allow all this mixing and matching. Layer7 and other CA solutions could potentially have an important role, becoming the glue for the new CA APP portfolio.

    If things turn out right for this concept, we could become the glue to small 3rd party APP innovators, by providing them the CA APP infrastructure that turnes their APPs into a corporate quality tool.

    IT professionals are under an ever growing pressure to provide results quickly, with minimal learning and implementation, and using small simple APPs to fulfill this need, could be very much appreciated…

    I can see that for us, this may look like a 180 degree turn around…but still worth looking into…

    I’d love to learn what are your thoughts about this concept…

    Yours,

    Jack.

  2. Hello Lonne,

    Thank you for highlighting the API arena state and challenges, as well as the basis for Layer7 lead position in this playground.

    Your article has reminded me of a perception I have been looking into for some time:

    I believe that we gained market share and leadership in the IT Management sphere by combining and integrating many comprehensive solutions into big-bulk suite(s).

    Looking at the APP market (and following your article, the API market as well) I feel there is a signal that points to a new perception.

    Possibly the next winners in the IT Management arena will be those who pick, slice and match the big challenges into chunks of smaller yet directed solutions (in the form of small apps).

    So instead of software suites that can do many things, you would have specialized smaller apps that take care of specific repetitive tasks and serve specific roles.

    The winner in this imaginary new category will be able to quickly carve small chunk apps as well as mix and match small apps into a-bit-bigger app, when the need arises.

    All this would be dependent on a simple secure engine and standards APIs that allow all this mixing and matching. Layer7 and other CA solutions could potentially have an important role, becoming the glue for the new CA APP portfolio.

    If things turn out right for this concept, we could become the glue to small 3rd party APP innovators, by providing them the CA APP infrastructure that turnes their APPs into a corporate quality tool.

    IT professionals are under an ever growing pressure to provide results quickly, with minimal learning and implementation, and using small simple APPs to fulfill this need, could be very much appreciated…

    I can see that for us, this may look like a 180 degree turn around…but still worth looking into…

    I’d love to learn what are your thoughts about this concept…

    Yours,

    Jack.

  3. Thank you for the explanation on Layer 7 ! This clarifies it for me.

    It definitely sounds as a very valuable add on to the CA Portfolio in the light of the Mobility tsunami forcing itself into the world of Enterprise Apps delivering the need for more and ultra strong security.

  4. Great overview!

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