Internal vs External APIs - What is the Difference?

Posted on May 13, 2024

APIs are an important part of modern software development, allowing communication between different systems and services. However, not all APIs are the same. Internal APIs and external APIs have different purposes and characteristics that affect their management and security needs. In this article, we will look at the main differences between internal and external APIs, focusing on their definitions, purposes, advantages, and disadvantages. By understanding these differences, organizations can better design, implement, and manage their API strategies to help their applications succeed and stay secure. Learn whether internal or external API fits your use case.

Key Takeaways

  • Internal APIs are tailored to an organization's needs and used to connect internal systems and components, improving efficiency and collaboration among internal teams.
  • Internal APIs offer better security due to limited access within the organization's network, customization to fit specific workflows, and granular permissions for different teams or users.
  • Disadvantages of internal APIs include limited exposure for innovation and collaboration, potential for stagnation, and overlooked security flaws due to lack of external scrutiny.
  • External APIs provide functions or services to external developers and third-party apps, enabling revenue generation, brand awareness, innovation, scalability, and security monitoring.
  • Risks associated with external APIs include security threats, dependence on third-party adoption, increased complexity, ongoing maintenance, and compliance with laws and regulations.

Internal APIs

Internal APIs are used within an organization to help communication between internal systems and applications. They are made to improve efficiency, productivity, and collaboration among internal teams by allowing access to internal resources and data.

What Is An Internal API?

Internal APIs are not exposed to the public or external developers. They have specific functionality tailored to the organization's needs. These APIs are often used to connect components in microservices architectures, enabling different parts of the system to communicate with each other. Compared to external APIs, internal APIs may have less strict security measures as they are only accessible within the organization's network.

For example, consider a large e-commerce company with various departments such as inventory management, order processing, and customer service. You can use the API to:

  • Allow the inventory management system to update product availability in real-time, which can be accessed by the order processing system to prevent overselling.
  • Enable the customer service department to get order information from the order processing system to assist customers with their questions.


The main advantage of internal APIs is better security due to limited access. Since they are not publicly exposed, the risk of unauthorized access or data breaches is reduced. Organizations have better control over functionality and data access, as they can define specific permissions for different internal teams or users.

Characteristic Description
Limited access Internal APIs are only accessible within the organization's network, reducing security risks.
Customization Internal APIs can be made to fit the specific needs and workflows of the organization.
Granular permissions Organizations can define specific access rights for different internal teams or users.


Internal APIs offer flexibility to meet specific organizational requirements. They can be made to fit the specific needs and workflows of the company, leading to increased efficiency and productivity. By using internal resources, organizations can reduce costs associated with developing and maintaining APIs, as they do not need to invest in external infrastructure or services.

For instance, a financial institution can develop internal APIs to:

  • Integrate various internal systems, such as customer relationship management (CRM) and loan processing, to make workflows easier and reduce manual data entry.
  • Allow secure access to customer data across different departments, enabling faster decision-making and improved customer service.


However, internal APIs also have some disadvantages. Due to their limited exposure, there is less potential for innovation and collaboration with external developers or partners. Internal APIs may receive limited resources for development and maintenance, as they are not directly generating revenue or facing external competition.

Low visibility within the organization can lead to duplication of efforts or lack of awareness about existing APIs. Limited use cases and potential for stagnation are also concerns, as internal APIs may not evolve as quickly as external ones due to a lack of feedback and external pressures.

Another potential disadvantage is that security flaws may be overlooked by developers who are familiar with the internal environment. Without the scrutiny of external security researchers or users, vulnerabilities may go unnoticed for longer periods.

Disadvantage Description
Limited exposure Less potential for innovation and collaboration with external parties.
Limited resources Internal APIs may receive less funding and support for development and maintenance.
Low visibility Duplication of efforts or lack of awareness about existing APIs within the organization.
Potential for stagnation Internal APIs may not evolve as quickly as external ones due to a lack of feedback and external pressures.
Overlooked security flaws Vulnerabilities may go unnoticed for longer periods without external scrutiny.

External APIs

What Is An External API?

External APIs provide functions or services to external developers and third-party apps. Companies expose their APIs to the public to:

  • Make money through paid access or revenue-sharing models with third-party developers.
  • Increase brand awareness by showing their technology and encouraging developers to create integrated apps.
  • Help innovation and collaboration with external developers, leading to new uses and increased platform adoption.


  • Twitter API: Lets developers build apps that interact with Twitter's features, such as posting tweets or getting user data.
  • Google Maps API: Enables third-party apps to add Google Maps functions, like location search and directions.


Characteristic Description
Internet accessibility External APIs are accessible over the internet using standard protocols like HTTP.
General usage Made for a broader audience with varying levels of technical knowledge.
Integration-focused Often used to create user interfaces and integrate with other apps.
Strict security Require strong security measures to protect against unauthorized access and data breaches.


  1. Revenue generation: Companies can create new revenue streams by offering paid access to their APIs or through revenue-sharing models with third-party developers.

  2. Brand awareness: Exposing APIs to the public helps show an organization's technology and encourages developers to build integrated apps, increasing brand visibility.

  3. Innovation: External APIs enable third-party developers to create new apps and uses, leading to a more diverse ecosystem around the organization's platform.

  4. Scalability: By providing a standard way for external developers to interact with their services, organizations can scale their platform more easily without custom integrations.

  5. Security monitoring: With a wider audience using external APIs, organizations can collect more data on usage patterns and potential security threats, enabling better monitoring and improvement of API security.


  • Stripe API: By offering a payment processing API, Stripe has enabled many businesses to easily add payment functions into their apps, leading to increased adoption and revenue for Stripe.


  1. Security risks: Public exposure of APIs increases the risk of unauthorized access, data breaches, and other security threats, especially when APIs allow access to sensitive data or control over important resources.

  2. Third-party adoption dependence: The success of an external API largely depends on its adoption by third-party developers. If developers find the API hard to work with or not useful, it may fail to gain traction.

  3. Increased complexity: External APIs cater to a general audience, requiring them to be designed with a wider range of use cases in mind, which can increase the complexity of API design and implementation.

  4. Ongoing support and maintenance: External APIs require continuous support, maintenance, and updates to ensure they remain functional, secure, and compatible with the latest technologies and standards.

  5. Legal and regulatory compliance: Organizations must ensure their external APIs comply with relevant laws and regulations, such as data protection and privacy laws, adding complexity to the API management process.


  • Facebook Graph API: In 2018, Facebook faced scrutiny over the Cambridge Analytica scandal, where user data was misused through the Graph API. This led to increased security measures and restrictions on the API to prevent similar incidents in the future.

Key Differences in Managing Internal vs External APIs

When managing internal and external APIs, there are several key differences that organizations need to consider. These differences can impact how you design, secure, document, and monitor APIs.

Authentication and Access Control

Internal APIs External APIs
Simpler authentication requirements Stricter authentication and access control measures
Authentication based on existing user credentials or SSO systems Common authentication methods include OAuth 2.0 and API key registration

For example, an internal API used by the HR department to access employee records may rely on the organization's existing Active Directory authentication. In contrast, an external API providing weather data to third-party developers would require OAuth 2.0 authentication to secure authorization and API key registration to track usage.

Documentation and Developer Resources

Internal APIs External APIs
Specific documentation for internal development teams Detailed documentation and developer resources for a wide audience
Focus on specific functionality and integration with internal components API references, code samples, tutorials, and guides for different technical levels

Consider an internal API used by the marketing team to get customer data from a CRM system. The documentation may assume knowledge of the organization's data structures and focus on specific use cases. On the other hand, an external API for a social media platform would require detailed documentation covering authentication, data formats, rate limits, and code examples in multiple programming languages.

Monetization and Pricing

Internal APIs External APIs
Usually no monetization considerations May require monetization models to generate revenue or cover costs
Costs covered by the organization's IT budget Common monetization strategies include usage-based pricing, tiered pricing plans, or revenue sharing

For instance, an internal API connecting an organization's inventory system with its e-commerce platform would not involve monetization, as the costs are part of the company's operations. However, an external API providing financial market data may offer different pricing tiers based on the number of API calls, data refresh frequency, and access to premium features.

Performance and Scalability

Internal APIs External APIs
Lower performance and scalability requirements due to limited usage within the organization Must be designed to handle many concurrent users and high traffic loads
Still important to make sure APIs can handle expected traffic and usage patterns Requires investment in strong infrastructure, load balancing, and caching mechanisms

For example, an internal API used by a small team for project management may have lower performance requirements compared to an external API for a popular mobile gaming app that needs to handle millions of concurrent users and keep latency low.

Analytics and Monitoring

Internal APIs External APIs
Usage patterns are more predictable and stable due to a smaller, controlled user base Benefit greatly from usage analytics and monitoring to gain insights and make data-driven decisions
Monitoring is important to assure functionality and identify issues impacting internal processes Collecting data on API usage patterns, performance metrics, and error rates helps optimize APIs for developers and end-users

Consider an internal API used by the finance department to automate expense reporting. Monitoring this API would involve tracking its availability, response times, and error rates to keep the expense reporting process running smoothly. On the other hand, an external API for a ride-sharing platform would require detailed analytics to understand usage patterns, optimize routes, and improve the overall user experience.

Documenting Internal and External APIs

Differences in Approach

Internal API documentation and external API documentation have different audiences and purposes, which affect the detail and focus of the documentation.

Aspect Internal API Documentation External API Documentation
Audience Your organization's development teams Wide audience with different technical expertise
Focus Specific functionality and integration with internal systems Clear, concise, and easy-to-understand information about API usage
Example An internal API connecting HR and payroll systems, including detailed information about your company's employee data model and handling of sensitive data A public weather service API with quickstart guides, code samples, and interactive tools for developers to get weather data for specific locations

Security Considerations

Security is an important aspect of API documentation, but the emphasis and details may differ between internal and external APIs.

Aspect Internal API Documentation External API Documentation
Authentication and Authorization Focus on integration with your company's existing IAM systems, such as Active Directory or OAuth 2.0 with OpenID Connect Detailed guidelines on authenticating requests, handling access tokens securely, and responding to common security threats
Data Handling Best practices for handling sensitive data and integrating with other internal systems securely Clear guidelines on rate limits and error handling to prevent abuse and ensure fair usage

Publishing and Accessibility

The way internal and external API documentation is published and accessed differs based on the intended audience and security requirements.

Aspect Internal API Documentation External API Documentation
Publishing Platform Your organization's intranet or internal documentation tools like Confluence or SharePoint Public developer portal, serving as a central hub for developers to access API references, guides, and tools
Access Restricted to your organization's employees, may require additional authentication or VPN access Publicly available, with features like API key management, usage analytics, and support forums

Importance of Documentation for API Security

Clear and complete documentation is important for making sure developers use APIs securely. API documentation should cover various security topics and best practices, such as:

  • Secure storage and management of API keys and access tokens
  • Validation and sanitization of user inputs to prevent injection attacks
  • Use of encryption and secure communication protocols like HTTPS
  • Proper error handling and avoiding exposure of sensitive information in error messages

Regular updates to API documentation are important to reflect changes in functionality, security measures, and best practices. Outdated or incomplete documentation can lead to security risks, as developers may rely on incorrect information or use old features with known vulnerabilities.

API Security

API security is important for both internal and external APIs to protect sensitive data, prevent unauthorized access, and maintain the integrity of the systems they connect. However, the security risks and best practices may differ slightly between internal and external APIs due to their different architectures and use cases.

Risks associated with internal and external APIs

Internal APIs, which are used within an organization to connect different services and applications, can pose security risks if proper security measures are not implemented. One of the main risks is the failure to enforce strong service-to-service API security, which can lead to unauthorized access to internal resources. For example, if an internal API that connects the HR system to the payroll system lacks proper authentication and authorization controls, an attacker who gains access to the HR system may be able to exploit the API to access sensitive financial data in the payroll system.

External APIs, which are exposed to third-party developers and external users, face additional security risks due to their public-facing nature. These risks include:

  • Data breaches: Attackers may try to exploit vulnerabilities in the API to gain unauthorized access to sensitive user data, such as personal information, financial details, or confidential business data. For instance, in 2018, Facebook experienced a data breach that affected 50 million user accounts due to a vulnerability in its "View As" feature, which allowed attackers to steal access tokens and take over user accounts.

  • API abuse: Malicious users may try to misuse the API by making excessive requests, using it for unintended purposes, or attempting to bypass rate limits or access controls. An example of API abuse is the 2015 incident involving Instagram, where a bug in the API allowed users to delete comments from any account, resulting in the deletion of millions of comments.

  • DDoS attacks: Attackers may overwhelm the API with a flood of requests, causing it to become unavailable to legitimate users. In 2016, the Dyn DNS provider suffered a massive DDoS attack that disrupted major internet platforms and services, including Twitter, Netflix, and Reddit, by exploiting vulnerabilities in IoT devices and using them to generate a huge volume of traffic.

Best practices for securing internal and external APIs

To mitigate the security risks associated with internal and external APIs, organizations should follow these best practices:

Best Practice Description
Implement strong authentication and authorization mechanisms Use industry-standard protocols like OAuth 2.0 and OpenID Connect to authenticate API requests and authorize access to specific resources based on user roles and permissions.
Encrypt sensitive data in transit and at rest Use secure communication protocols like HTTPS to encrypt data in transit and encrypt sensitive data stored in databases or file systems to protect against unauthorized access.
Validate and sanitize API inputs Implement input validation and sanitization techniques to prevent injection attacks, such as SQL injection or cross-site scripting (XSS).
Monitor API usage and detect anomalies Implement monitoring and logging mechanisms to track API usage patterns, detect anomalies, and identify potential security threats. Use tools like Splunk or ELK stack to collect, analyze, and visualize API logs.
Regularly update and patch APIs Keep API components and dependencies up to date with the latest security patches and updates to address known vulnerabilities. Conduct regular security audits and penetration testing to identify and fix potential weaknesses.

Importance of API security monitoring

API security monitoring is essential for both internal and external APIs to detect and respond to security threats in real-time. For internal APIs, collecting data from API logs and integrating them into the organization's security monitoring systems can help identify suspicious activities, such as unauthorized access attempts or unusual usage patterns.

External APIs require additional security monitoring measures due to their exposure to a wider range of potential threats. Organizations should use external API security monitoring tools, such as Imperva or Salt Security, to continuously monitor API traffic, detect anomalies, and block malicious requests in real-time. These tools can also help organizations comply with industry regulations and security standards, such as PCI DSS or HIPAA.

Real-life examples of API security monitoring solutions:

  1. Imperva API Security: Imperva offers an API security solution that provides visibility, protection, and control over API traffic. It uses machine learning to detect anomalies and block threats in real-time. Imperva also offers features like API discovery, schema validation, and access control to help organizations secure their APIs throughout their lifecycle.

  2. Salt Security API Protection Platform: Salt Security provides an API protection platform that discovers APIs, detects vulnerabilities, and prevents attacks in real-time. It uses big data and AI to analyze API traffic and identify threats, such as data leakage, API abuse, and bot attacks. Salt Security also integrates with existing security tools and provides detailed reports and analytics to help organizations improve their API security posture.