The term API is an acronym for Application Programing Interface. API’s make life easier for software application developers. Many software applications provide a menu of API’s to make a programmer’s job easier by allowing them to simply select an API that performs the function they want, instead of having to code everything from scratch. For example, construction management applications such as Plangrid and Fieldwire both have standard API's so that users can create connections between those applications and others that they might use. This can be really helpful in the construction industry where we use multiple applications but want to use a single source of data. For example, I may be able to use some API calls to get my construction management application to create projects using the information I already have stored in my CRM application.
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A common use of an API that you may have seen is the ability to embed a Google Map into a web site or other application. Google created the map API to give users a simple way to do this, without each developer having to write new code every time they want to embed a Google Map. Instead, they make a call to Google Maps using the API created by Google. Sometimes there are limitations on who can use the API, and not all companies build API's for their applications.