When do you need an API gateway?

Learn about the importance of API gateways and how to determine if your business needs one, the functions, and the benefits for seamless and secure API management

Sivaraj Lenin Sivaraj Lenin

The use of APIs has increased in recent years as companies have realized the potential of opening up their services and functionality to third parties. In today’s fast-paced business environment, APIs have become the de facto medium for companies and organizations to connect. They define how software components should interact and provide a standard solution for accessing business-critical data and functionality from other applications or services.

However, just as APIs have become more popular due to their associated benefits, it has also led to more complexity in API setups. This results in challenges in structuring and managing APIs. Moreover, with companies looking to adopt more API-first approaches, infrastructural changes are often necessary to address this increased complexity. it can be challenging to determine what changes to make and when to make them.

Keeping up with market trends is essential to remaining competitive, which is why it’s crucial to understand the importance of API gateways and determine if you need one. This article will help you do just that.

The rise of the API gateway

Modern businesses have come to rely on APIs as the building blocks of their business models. To facilitate seamless system integration for an agile and secure API system, it’s essential to ensure consistency in quality and availability when exposing these APIs internally and externally.

However, API management involves complex subsystems and complicated infrastructure. Not all systems require an API gateway, but it’s important to recognize the telltale signs of when they do. These include:

  1. Security — When you need to make sure your APIs are protecting the sensitive data in a reliable manner
  2. Scalability — When you need to power up your API’s performance by implementing performance features, such as, traffic management, caching data, etc.
  3. Complexity of managing usage — When you need to manage and monitor who is consuming your APIs and their subscriptions in a consistent way
  4. Interoperability — When you are spending too much time with the mediation and data transformation needs for incoming and outgoing requests to support different data formats and requirements
  5. Monitoring and logging — When you need a central cockpit for aggregated logging, auditing, and monitoring your APIs to maintain them all
  6. Developer experience — When you need to provide a consistent experience for developers when it comes to API documentation, API discover, try-out API, and onboarding governance
  7. Monetization — When you need an easy way to package, price, promote, and monitor your APIs throughout their lifecycle

What is an API gateway?

API gateways are middleware or software components that sit between client applications and back-end services. They act as the entry point for all API calls and incoming requests. API gateways provide a more straightforward, secure, and reliable API interface for complex subsystems by working as a proxy between the API system and its consumers.

The primary function of an API gateway is to route and transmit client requests to the appropriate back-end services. They also provide other capabilities, such as security, rate limit, caching, request/response transformation, monetization, and load balancing.

Furthermore, API gateways can also aggregate multiple API calls into one, reducing the complexity and number of connections made by applications. This can improve the overall API system’s performance.

What does an API gateway do?

An API gateway is a secure access point or management tool for APIs, abstracting away the intricate details of the API system and making it easier to interact with back-end servers or services.

When an API consumer or client makes a request to the API, the gateway handles the routing of these requests to the appropriate back-end servers. Once the back-end server has processed the request, the gateway receives a response, which is then forwarded to the client or API consumer.

Since the API gateway processes all API requests from a client, it efficiently manages API resources by determining the services needed in a request. It can also perform load balancing and request throttling to guarantee the system’s scalability, responsiveness, and availability. This facilitates a seamless user experience when interacting with the API system.

Security is vital for any system that handles sensitive data. API gateways supply a layer of protection by providing the authentication and authorization for back-end services, enforcing strict security policies to protect the system from unauthorized access, and ensuring that only authorized clients can access the data and services.

Furthermore, API gateways provide insight into how the system is being used and potential problems. An API gateway can provide detailed logs of all requests and responses, making troubleshooting issues and optimizing the system easier.

Why use an API gateway?

When APIs are exposed internally or externally, they create security concerns. It’s necessary to monitor and optimize their performance to maintain availability. Though API gateways are not new, their popularity has grown as more companies adopt APIs to transform their business offerings into digital solutions and generate revenue streams. As a result, the demand for more scalable and robust API management tools for managing these solutions has increased.

With API gateways, companies can streamline their back-end architecture and expose their data and services to both internal and external developers securely and efficiently. The main advantage of API gateways is the ability to create a flexible and scalable API system.

Additionally, an API gateway can provide observability into API traffic and performance, contributing to critical debugging and troubleshooting insight. API gateways facilitate a direct API observation system that allows API traffic to be passively logged, traced, and monitored. This enables businesses and engineering teams to better understand how APIs isolate and remediate potential performance and security issues before they become customer problems.

Furthermore, an API gateway can help standardize API creation and consumption, making it easier for developers to work with multiple APIs. API gateways provide a common blueprint for developers and design architects to ensure consistency in API design and implementation. Consequently, APIs and the resources they expose can be designed, maintained, adopted, and consumed consistently.

Do I need an API gateway?

An API gateway is a key component of any services-based architecture as it simplifies the management of the API ecosystem by making it more efficient, secure, and easy to use. Therefore, API gateways are beneficial for client-facing APIs, simplifying the API experience for users or scaling API approaches for optimal performance.

By abstracting away the details of your individual API resources, an API gateway makes it easier to consolidate cross-cutting concerns, saving time and effort when you need to configure or implement changes to your API.

Each API service would need to be individually configured without an API gateway to provide security, optimization, and other critical functions. This can be time-consuming and error-prone. Additionally, monitoring and logging activity without an API gateway can be challenging, as each microservice would have to be manually configured.

If you’re looking for a reliable API system that can easily scale operations to meet client demands, an API gateway is an invaluable tool.

API gateway versus API proxy

Like an API gateway, an API proxy acts as an interface between API consumers and back-end services. An API proxy exposes URL endpoints for existing APIs so users can access them via these proxy endpoints. Requests coming through these proxy URLs are routed to the configured API endpoint, which processes the requests and sends them to the proxy, then returning them to the caller. Additionally, API proxies can transform data and handle routing and basic security.

However, API proxies are limited in their capabilities in comparison to API gateways. API gateways provide much richer functionality and customization than API proxies, such as rate limiting, API monitoring, caching, end-to-end security, load balancing, authentication, mediation (e.g., SOAP to REST), monetization, and authorization — among others.

While it’s possible to use API gateways as simple API proxy servers, an API proxy can’t perform all the functions of an API gateway. For example, API gateways allow you to combine multiple existing services to create an API, which is something a proxy can’t do.

Consider using an API proxy if you’re building a simple API and want to add some basic security policies. However, it’s insufficient for any enterprise API approach. To handle enterprise APIs at scale, you’ll need an API gateway.

What API gateway should I choose?

A good API management strategy must include an API gateway. An API gateway is the only entry point for traffic from all APIs, providing a unified interface for managing, securing, and monitoring all API traffic. As such, a good API gateway must have robust features and capabilities such as:

  • Suitable security methods that can authenticate and authorize all API traffic
  • A mechanism for auditing and logging all API traffic
  • An ability to monitor, analyze, and optimize all API traffic for optimal API performance
  • The flexibility to support a variety of API architectures and deployments
  • The ability to scale to support a large number of API calls
  • Competitive pricing

Software AG’s API management tools offer complete visibility and control over your APIs, making them stand out from the competition. The Software AG platform can manage your APIs across its entire lifecycle and various landscapes. Some of the platform’s features include controlling your API security by protecting APIs, data, and microservices with authentication and necessary access control. It also offers threshold setting capability to measure, limit, and control API usage.

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Furthermore, our tools allow you to group microservices with reusable policies to manage and monitor who’s using your APIs and microservices with increased transparency. These features make it easy for developers and enterprise solutions to understand how their API works and manage their evolving API ecosystem.

Software AG’s API management tools provide the right features to enable companies to innovate rapidly when managing APIs and microservices so they can go to market faster.


Most businesses involving digital service-sharing solutions have multiple services exposed to users through various distributed API endpoints. This makes it a challenge to manage these APIs and ensure reliability. Companies using APIs must continuously evolve with their API ecosystem to offer secure, reliable, and agile integration with optimal performance.

API gateways provide many benefits to companies, providing the core infrastructure with a way to simplify API management so they can focus more on building application logic and innovating rapidly.

To manage your API’s effectively, check out Software AG and learn more about our API management tool.