API management software Market Research Report: By Deployment Model (On-Premises, Cloud, Hybrid), By Organization Size (Small and Medium-Sized Enterprises (SMEs), Large Enterprises), By Industry Vertical (Financial Services, Healthcare, Retail, Manufacturing, Technology), By Type (Full Lifecycle API Management, API Gateway, API Analytics), By API Protocol (HTTP, HTTPS, SOAP, REST) and By Region (North America, Europe, South America, Asia Pacific, Middle East and Africa)- Forecast to 2032.

API Management Software Market Overview

API management software market size was estimated at 9.94 (USD Billion) in 2022. The API management software market industry is expected to grow from 11.56(USD Billion) in 2023 to 45.11 (USD Billion) by 2032. The API management software market CAGR (growth rate) is expected to be around 16.34% during the forecast period (2024-2032).

Key API management software Market Trends Highlighted

Market Drivers

Cloud migration, proliferation of APIs, and increased automation are driving market growth. Organizations seek solutions to manage and optimize their API ecosystem efficiently.

Opportunities for Exploration

Advanced security features, AI-powered analytics, and integration with low-code/no-code platforms present opportunities for vendors to expand their offerings and cater to evolving customer needs.

Recent Trends

API gateway modernization, cloud-native architecture, and open-source adoption are shaping the market. Vendors are focusing on providing flexible and scalable solutions that meet the demands of modern application development environments.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

API management software Market Drivers

Rising Demand for Digital Transformation

The increasing adoption of digital technologies and cloud-based applications have increased the demand for API management software. Businesses are in need of solutions to manage and integrate their APIs in a secure manner to support their digital transformation initiatives. This is one of the major market drivers of the API management software Market, as businesses are trying to operate more efficiently, together and improve customer experience through appropriating use of APIs.

Growing Adoption of Cloud-Native Applications

The shift towards cloud-based applications and microservices architecture has accelerated the adoption of API management software. Cloud-native applications rely heavily on APIs for communication and integration, driving the need for tools to manage these APIs effectively. This market driver has propelled the growth of the API management software Market, as organizations seek solutions to support their cloud-native environments and ensure seamless API connectivity.

Increased Regulatory Compliance Requirements

The need for API management software to ensure compliance with stringent data privacy and security regulations such as GDPR and CCPA is a critical market driver. Organizations need to implement robust API security to ensure compliance of APis with a whole range of data protection regulations. Therefore, the fact that companies need applications that can mitigate risks associated with lax API security contributed to the growth of the API management software Market.

API management software Market Segment Insights

API management software Market Deployment Model Insights  

The Deployment Model segment significantly impacts the API management software Market as it offers three primary models to the businesses such as on-premises, cloud, and hybrid. Every deployment model is equipped with a specific advantage and disadvantage that tailor to the unique needs and preferences of the enterprises. The on-premises deployment model involves the installation and managing of the API management software on the business’s own infrastructure.

This model ensures user control, enabling the operations to secure enterprise data and ensure adherence to internal policies.However, on-premises deployment requires large capital investments to purchase, maintain, and update servers and install software. The cloud deployment model is typically subscription-based and utilizes the cloud service provider to enable the enterprise to access the API management services. This award-winning deployment model is lauded for its minimal total cost of ownership, scalability, and flexibility of services.

However, enterprises must consider the downstream implications of the security and operational risks of cloud computing and vendor lock-in of this model.The hybrid IDM deployment effectively combines both on-premises installation of the software along with subscribing to the cloud services. This deployment model ensures a cost-effective solution that delivers minimal risk and optimal user control. The cloud deployment model will increase its already high market share as the most substantial growth is expected to occur because of the rapid adoption of cloud computing services.

More specifically, organizations are recognizing the cost-effectiveness and scaling viability of utilizing the available cloud services rather than employing on-premises options.Furthermore, organizations’ increasing embracement of the different aspects of microservices and containers will further the adoption of cloud-deployed API management services. The deployment model segmentation of the API management software Market can provide significant insights and information for enterprises to effectively maximize the adequacy of their decisions and actions.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

API management software Market Organization Size Insights  

The Organization Size segment of the API management software Market includes Small and Medium-Sized Enterprises (SMEs) and Large Enterprises. The Large Enterprises segment had a larger share in the API management software Market revenue of 65% in 2023. The growth is due to the increasing adoption of API management software by large enterprises to enhance the efficiency and security of their API operations.

However, the CAGR of the SMEs segment is expected to be faster during the forecast period, with a 17.5% rate. By 2032, the segment is expected to contribute 40% of the API management software Market revenue, representing an equivalent market size of USD 18.04 billion.

API management software Market Vertical Insights  

The API management software Market is segmented by Industry Vertical into Financial Services, Healthcare, Retail, Manufacturing, and Technology. The Financial Services segment is expected to account for the largest share of the market in 2023, with a market value of USD 2.56 billion. The Healthcare segment is expected to grow at the highest CAGR of 17.34% during the forecast period.

The Retail segment is expected to account for a market value of USD 1.83 billion in 2023. The Manufacturing segment is expected to account for a market value of USD 1.67 billion in 2023.The Technology segment is expected to account for a market value of USD 1.54 billion in 2023. The growth of the API management software Market is attributed to the increasing adoption of cloud-based services, the need for improved API security, and the growing popularity of microservices architecture.

API management software Market Type Insights  

The API management software Market is segmented by Type into Full Lifecycle API Management, API Gateway, and API Analytics. Among these, the Full Lifecycle API Management segment held the largest market share in 2023 and is expected to continue its dominance throughout the forecast period. This is primarily due to the increasing adoption of cloud-based API management solutions, which offer a comprehensive suite of features for managing the entire API lifecycle, from design and development to deployment and monitoring.

The API Gateway segment is also expected to witness significant growth in the coming years, driven by the rising demand for secure and scalable solutions for managing API traffic. The increasing adoption of microservices-based architectures is also fueling the growth of the API Analytics segment, as organizations seek to gain insights into the performance and usage of their APIs.

API management software Market API Protocol Insights  

The API protocol segment plays a crucial role in the API management software Market. Among the commonly used protocols, HTTP dominates the market, accounting for over 50% of the revenue in 2023. Its widespread adoption stems from its simplicity, versatility, and ability to handle various request methods. HTTPS, an encrypted version of HTTP, is gaining traction due to its enhanced security measures, especially for sensitive data transmission.

SOAP, while still prevalent in certain industries, is gradually losing its market share due to its complexity and performance limitations.REST (Representational State Transfer) is emerging as a popular choice for modern APIs, offering flexibility, scalability, and ease of use. The market share of REST is projected to grow significantly in the coming years, driven by the increasing adoption of microservices architectures and cloud-native applications.

API management software Market Regional Insights  

The API management software Market is segmented by region into North America, Europe, APAC, South America, and MEA. North America is expected to hold the largest market share in 2023, while APAC is projected to grow at the highest CAGR during the forecast period. The growth in North America is attributed to the increasing adoption of cloud-based API management solutions by enterprises.

The presence of key players such as Google, Microsoft, and Amazon Web Services (AWS) in the region is also driving the growth of the market. APAC is expected to witness significant growth due to the increasing adoption of mobile applications and the growth of the e-commerce industry in the region.The rising demand for API security and governance solutions is also contributing to the growth of the market in this region.

Europe is expected to hold a significant market share, owing to the presence of a large number of enterprises and the increasing adoption of API management solutions by governments and public sector organizations. The growth in South America and MEA is expected to be driven by the increasing adoption of cloud computing and the growth of the digital economy in these regions.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

API management software Market Key Players And Competitive Insights

Major players in API management software Market are constantly innovating to stay ahead of the competition. They are investing heavily in research and development, making acquisitions, and expanding their partner ecosystem. For instance, in 2022, Google Cloud launched Apigee Registry, a new API registry service that provides a centralized, scalable, and secure way to manage and discover APIs.

This launch strengthens Google Cloud's position as a leading player in the API management software Market.Leading API management software Market players are also focusing on expanding their global reach. For example, in 2022, Apigee announced a partnership with Salesforce to offer its API management solutions to Salesforce customers worldwide. This partnership is expected to help Apigee expand its reach into new markets and increase its market share. Other leading players are also pursuing similar strategies to expand their global presence.

The API management software Market is expected to witness a number of significant developments in the coming years. One of the key trends is the increasing adoption of cloud-based API management solutions. Cloud-based solutions offer a number of advantages over on-premises solutions, such as scalability, flexibility, and cost-effectiveness. As more organizations move to the cloud, the demand for cloud-based API management solutions is expected to grow significantly. Another key trend is the growing adoption of AI and ML technologies in API management.

AI and ML can be used to automate a number of tasks, such as API discovery, documentation, and testing. This can help organizations to improve the efficiency of their API management processes and reduce the cost of owning and operating APIs.Another key trend in the API management software Market is the growing adoption of low-code/no-code API management platforms. These platforms make it easy for developers to create and manage APIs, even if they don't have extensive coding experience.

This is expected to make API management more accessible to a wider range of organizations and individuals, which is likely to drive the growth of the market in the coming years.One of the leading companies in the API management software Market is Google Cloud. Google Cloud offers a comprehensive suite of API management solutions, including Apigee Registry, Apigee Edge, and Apigee Insights. Apigee Registry is a cloud-based API registry that helps organizations to discover, manage, and version their APIs. Apigee Edge is a cloud-based API gateway that helps organizations to secure, monitor, and analyze their APIs.

Apigee Insights is a cloud-based API analytics platform that helps organizations to understand how their APIs are being used and identify opportunities for improvement.Another key player in the API management software Market is Microsoft. Microsoft offers a comprehensive suite of API management solutions, including Azure API Management, Azure Application Gateway, and Azure Monitor. Azure API Management is a cloud-based API management platform that helps organizations to design, build, and publish APIs. Azure Application Gateway is a cloud-based API gateway that helps organizations to secure, monitor, and analyze their APIs. Azure Monitor is a cloud-based monitoring platform that helps organizations to monitor the performance and health of their APIs.

Key Companies in the API management software Market Include

• Layer7


• Oracle


• WSO2


• Tyk


• Nginx


• Mulesoft


• Stoplight


• Apigee


• Axway


• Kong


• Microsoft


• RedHat


• SAP


• Google


• IBM

API management software Market Developments

The API management software market is projected to grow from USD 11.56 billion in 2023 to USD 45.11 billion by 2032, at a CAGR of 16.34% from 2024 to 2032. The increasing adoption of cloud-based services, the growing need for data security and privacy, and the rising demand for APIs in various industries are driving the growth of the market.Recent developments in the market include: In March 2023, Google Cloud launched Apigee Registry, a new API registry service that helps organizations manage and govern their APIs. 

In February 2023, Microsoft Azure announced the general availability of Azure API Management Premium, a new tier of API management service that offers advanced features and capabilities. In January 2023, Amazon Web Services (AWS) announced the launch of Amazon API Gateway WebSocket APIs, a new feature that allows developers to create and manage WebSocket APIs using AWS API Gateway.These developments indicate the growing importance of API management software in the digital landscape and the increasing investment by major players in the market.

API management software Market Segmentation Insights

1. 
   

   API management software Market Deployment Model Outlook

   
   




1. On-Premises


2. Cloud


3. Hybrid

1. 
   

   API management software Market Organization Size Outlook

   
   




1. Small and Medium-Sized Enterprises (SMEs)


2. Large Enterprises

1. 
   

   API management software Market Vertical Outlook

   
   




1. Financial Services


2. Healthcare


3. Retail


4. Manufacturing


5. Technology

1. 
   

   API management software Market Type Outlook

   
   




1. Full Lifecycle API Management


2. API Gateway


3. API Analytics

1. 
   

   API management software Market API Protocol Outlook

   
   




1. HTTP


2. HTTPS


3. SOAP


4. REST

1. 
   

   API management software Market Regional Outlook

   
   




1. North America


2. Europe


3. South America


4. Asia Pacific


5. Middle East and Africa