API Management Software Market

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.

Figure 2 API Management Software Market  By Deployment Model (2023-2032)

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.

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.

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.

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.

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.