API vs. SDK: The Difference Explained (with Examples)

Understanding the difference between API and SDKs is helpful so you can communicate with software developers more confidently and understand what’s possible when discussing product plans. 

API vs. SDK: What’s the difference?

APIs are used to communicate between different applications, whilst an SDK is a tool kit to build applications and features. In most cases, an SDK application will contain an API — or even multiple APIs depending on the purpose of the software. 

For example, you might use the Google Maps SDK when building an app that requires a map, rather than having to handle the authorization and API yourself. 

API stands for Application Programming Interface. Simply put, APIs are used for two platforms to communicate with one another, share information, and perform actions together. Through APIs, computers are able to communicate and interact with one another. 

Thanks to an API's ability to connect with different applications, they are versatile.  APIs can be used on web-based systems, operating systems, database systems, and computer hardware.

On the other hand, a Software Development Kit (SDK) is a set of tools for developers that offers building blocks for the creation of an application instead of developers starting from scratch.

Think of it this way. 

An SDK is like pre-made pizza dough. Imagine you want to bake a fancy pizza but don’t have the skills to do so. You might opt for a pre-made pizza dough mix. The mix already has all the main ingredients measured out and only requires you to add the final steps. 

Essentially, SDKs are instructive bits of code around an API for a specific purpose.

Now, imagine you want to bake pizza dough without the pre-made mix. You need a recipe with instructions. Here, an API is the recipe, as it’s the set of programming instructions that give access to an application. 

Types of API

An “API type” simply refers to the intended use of the API and what types of network software it will connect to.

There are four types of API:

1. Public API: Open and available for users outside of a business. They typically involve moderate authorization and authentication.
2. Partner API: Mostly available for business-to-business data transfer with a secure network — for example, to share customer data outside a company. Business parties have the rights and license to access data with partner APIs. These APIs usually require stronger authentication and authorization.
3. Private API: Also known as “internal API.” This is used as a secure way for information to be passed internally through the company. For example, it passes through the front end and back end of an organization.
4. Composite API: Used for APIs that have more than one request. The requests are put into a sequence and sent together. 

Types of SDK

An SDK contains different software tools that depend on the function or features of the application you want to build. The types are almost always created using the SDK language, which is a differentiator from API.

As such, some SDKs need to be specific to certain different software platforms. For example, apps for iOS systems need to be developed using iOS SDKs. 

There are a variety of different SDK types, but the most commonly used are iOS SDKs, Java SDKs, and VMware SDKs.

Common examples of APIs and SDKs

APIs and SDKs are everywhere. Your computer or phone will have used an API the last time you purchased something from an e-commerce store and used Paypal or Klarna to buy it. The same is true the last time you signed up on a website by logging in with your Facebook or Google account. 

A lot of the features and applications we use on a daily basis are built from SDKs. For example, Google Analytics provides an SDK that gives insight into user behavior, engagement, and cross-network attribution. 

Another example is Hopin, a shared experiences platform that wanted to improve and enhance its Virtual Venue events by including a chat solution. The aim was to have users improve their engagement at virtual events through communication. Hopin was able to integrate Stream’s chat SDK in six months and improve its user engagement and satisfaction metrics during virtual events.

API vs. SDK: How do they work?

How does an API work?

At the very base level, an API is a messenger that sends a request to another data or service provider and then delivers the information or action response back to your platform. 

For example, you (Client) order a meal at a cafe, but you don’t tell the kitchen yourself. The waiter (API) sends your order (Data request) to the kitchen (Server). The order is received through an “expected format,” as the kitchen expects the “order” to look a certain way. Then, the meal (Data) is made and returned to you through the waiter.

How does an SDK work?

An SDK will give a tool kit of resources and helpers that are opinionated to a specific use case to create an application from (almost) the start.

For example, imagine you have to put together a bicycle. You will need a whole kit to put it together and the tools to assemble it. Moreover, to make sure you’re doing everything in order and correctly, you will use an instruction manual and the kit pieces themselves.

An SDK is like building a bicycle — it provides the tools, guides, documents, and code samples you need to build a specific application. 

What are the benefits of APIs vs. SDKs?

Both SDKs and APIs save time and money. In the case of SDKs, developers are given the tools and instructions to build what they need. They don’t need to spend time researching code, pieces, and the sequence that goes into building a certain feature. For APIs, no feature needs to be built, as it simply connects two applications through integration which removes time in development.

And both SDK and API can provide the product with additional features that quickly enhance a user's journey. APIs are able to connect apps to improve the user's journey, like, for example, using a Facebook account to create a new profile in a different app. Whilst SDK improves the user’s journey by including features in their app. 

However, the benefit of using SDK is the ability to create a feature that the app can “own.” The company can customize the new feature to the product's needs and goals.

APIs can save companies time and money with solutions that don't require time in development. Moreover, APIs are easy to integrate with other apps. And thanks to their versatility, they are able to connect with unlimited amounts of apps and do endless requests that improve the product.

API can also depend on other applications for data without having to create their own — they simply communicate the findings and data between platforms. 

API vs. SDK: Which should you use and when?

The chances are that you will probably use both API and SDKs in your product development. The “when” will depend on your product’s growth and needs. 

When you want to build and customize an application from scratch and integrate it into your product, your developers will use an SDK.

SDKs can use APIs if external communication with another app is required. 

You would use an API if you don’t need to create a feature in your software — you simply need to connect two applications. APIs are easy to integrate with a couple of clicks, and no further app development is required.  

For example, imagine you want to improve user engagement in your e-commerce app. You can improve engagement by building an activity feed in your app and using chats to connect with customers. So, you decide to build an activity feed for users with Stream’s activity feed SDK and connect with users through Stream’s chat API. By doing so, customers are able to have all their questions answered in real-time and be part of a community. 

If you’re looking to improve your product's offer, API and SDK are helpful tools to build value in your product with quick development.