Data is like oil. It only has a future value just sitting in a big pool. “Pure data,” as my fellow panelists said Friday night at API Days, has not proven to have much market play.

I agreed with them but it’s the wrong way to look at the matter. More so, it’s about how the data is processed and refined. Explore that dimension and it’s apparent that a data economy has emerged that has the virtual equivalence in power to oil and its impact everywhere.

But like oil, people don’t immediately equate data with everyday products or services. They know the data is there, but its uses are as infinite as space and its endless possibilities. How to understand the impact of data as an infinite concept is an intellectual exercise. That’s an important pursuit, but in our world, we need relevance to drive understanding.

The API has emerged as the means for connecting software and services. It serves as an intellectual vehicle for understanding how we can connect anything to make new things. And so it makes sense that the API itself is also discussed in an economic context. For example, the theme for API Days was all about the “API Economy.”

APIs are tangible because they are real. “Big data” is just a term. It has no meaning because it is not really anything at all. But an API is something that people use to connect services like Twitter, Facebook or Dropbox. The quantified-self movement relies on APIs to connect the data from our bodies to apps that give people new ways to measure their health. Netflix supports more than 1,000 devices with its API. About 20,000 developers use the Netflix API.

In an oil-based economy, industrial processes help make gasoline for cars or fibers for clothing. Data-driven processes help developers build software. And APIs connect that software to create new types of services that span the physical and virtual world.

3SCale Co-Founder Steve Willmott presented at API Days. His theory: software is eating the world and APIs are eating software. But by itself software has limited value. Connect it and the software turns things into programmable nodes.

By itself, data is irrelevant. The enterprise model has demonstrated that software on-premise has limited value when isolated in silos. But connect it with APIs, and transformations can occur that just were not possible before.

But are we just using the concept of an economy to describe anything that is data related? The Internet economy, the API economy, the app economy — the list goes on. All of these concepts have merit and relevance. But it is data that is the most important driver. I use the term “API Economy” quite a bit but to show its relevance to a world that is connecting things. Behind it all, it’s data that drives changes to the way we live and work.

So, yes, I agree that pure data has almost no value. But thinking of data in the context of APIs is more relevant to the way we work and live.

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