API development and Microservices are often confused with each other. This is a big misconception and a potential conceptual block during software development since they actually work together to boost the performance of a platform. 

Why is this important to know? The answer is simple: it will help you make better decisions when designing and developing your software application. Without that information, companies can expect some very challenging and expensive mistakes to say the least…

In case you’re unfamiliar with the terms “API” or “Microservice”, let’s break it down:

What is an API? (Application Programming Interface)

An API is essentially a toolbox full of routines and protocols that developers use when building software applications. There are several benefits they offer, but the key one is that they allow users to interact with software systems by exchanging and communicating information. 

Specifically, a developer would use an API to integrate certain functions and services into an application rather than creating one from ground zero. 

What are Microservices?

On the other hand, microservices are collections of independent services that are then used to design and operate the software with the help of APIs. Each microservice communicates with the other using APIs and offers unique benefits and capabilities that are highly beneficial to the platform.

For example, think of the shopping cart feature in an e-commerce store. When you add an item to your cart, the front-end application sends a request to the shopping cart microservice. The microservice then updates the cart and sends back a response to the front-end application that your item has been added.

By breaking down the functionality of the shopping cart into its own microservice, it becomes easier to scale and maintain the application as a whole. 

In addition, software developers use microservices so they can take a more Agile or DevOps-focused approach which in turn leads to an architecture that provides greater flexibility and scalability.

APIs + Microservices = ???

While it's true that microservices and APIs fall under the same umbrella in the broad scope of custom software development, each has its duties that make them super useful to one another. For instance, APIs are specifically designed to feed functions and data to different applications whereas microservices handle organizing the application's internal architecture. 

Ultimately, what you will have in this case is an application with various features for users to interact with (thanks to your API development) and then the microservices will handle what’s going on behind the scenes which is what allows the application to function so smoothly.

Differences and Similarities

By now you know that microservices need APIs to materialize an application, but then what makes it fair for us to say they are their own entities?

The interconnectedness of microservices depends on APIs to communicate which one could argue makes them perform in unison. However, APIs act as the link that enables different components of the tech stack to interact seamlessly, which, when working for a large-scale enterprise, is often a non-negotiable for their platform. 

Whether you’re a software developer or not doesn’t matter, this is information everyone in a business should know. With that being said, here are 4 differences and 4 similarities you’ll find when examining APIs and Microservices:

Differences:

• APIs enable communication between different software applications, while microservices form the application.

• APIs give life to a platform (by providing functions and services to various applications) while microservices keep it standing. 

• APIs can be used in a wide variety of contexts and architectures, while microservices are specifically designed to be used in more of a decentralized architecture.

• APIs tend to be more lightweight and simple than microservices, which can be difficult and require more resources to function properly.

Similarities:

• Both APIs and microservices are used in custom software development.

• APIs and microservices both rely on communication between various software components.

• APIs and microservices work together to create a seamless and high-performing software application.

• Both APIs and microservices improve flexibility, scalability, and agility during software development.

FinTech Example

When it comes to custom software development, knowing what tools to use and when to use them is probably the greatest possible advantage that development teams can have. However, to do this effectively, the team needs tunnel vision on the end goal. 

When it comes to APIs and microservices, the two work together to do many things, for example, if a FinTech company was building a payment processor, these are some of the tasks the tools would perform:

• Communicating with banks

• Database analysis

• Keeping the database up to date

• Scheduling recurring tasks

• The transaction process

• Generating PDFs for invoices

• Sending emails

What you see here are the tasks that the payment processor would rely on using API and microservice integration. Note that while each function works autonomously, they rely on APIs to communicate with each other. 

APIs can be used to activate a variety of tasks which is critical, but alone, they would not be able to fully operate the payment processor. Since the platform will need functions such as initiating charges, establishing customer profiles, generating invoices, subscribing to services, processing returns, and managing inventory, the processor would need the 6 microservices to do so.

What it Means to Have a High Functioning Software

While the process of building a sophisticated software architecture/system is complex, it is one of the most rewarding things any business can do in 2023. Why’s that? It is estimated that around 30% of business is done online in the United States alone. Without capitalizing on that, it means companies are only going to be able to achieve a maximum of 70% of their potential revenue gains. 

Consumers connect with online services that make their lives easier. A solid IT infrastructure is critical for making those services accessible. More importantly, it helps performance by:

• Minimizing downtime

• Preventing errors

• Preventing bugs

• Boosts data and traffic capacity

• Enhances security

What Have We Learned?

So does your software architecture need to look just like a FinTech payment processor would? Of course not! Custom software development is just that: custom. This makes what you learned in this article about APIs and Microservices just another set of tools to add to your arsenal during your digital transformation journey. Curious about how this could benefit your company? Reach out to book a free 30-minute discovery meeting with one of our lead software experts to talk about how you can apply custom software to your business.

Written By Ben Brown

—

ISU Corp is an award-winning software development company, with over 17 years of experience in multiple industries, providing cost-effective custom software development, technology management, and IT outsourcing.

Our unique owners’ mindset reduces development costs and fast-tracks timelines. We help craft the specifications of your project based on your company's needs, to produce the best ROI. Find out why startups, all the way to fortune 500 companies like General Electric, Heinz, and many others have trusted us with their projects. Contact us here.