Acting as an intermediary between a client and an API, the API proxy offers a centralized entry point to the API. It does this while augmenting it with new features such as security, caching, or rate limiting all without necessitating any modifications to the API itself. What's more, this versatile tool can redirect requests originating from different users or paths to disparate backend services suited for their individual needs while concurrently fulfilling responsibilities such as authentication (like key authentication and OAuth flows) and traffic management (like rate limiting).

In this article, we'll talk more about the definition of an API proxy, the types of proxies, how API proxies work, common use cases, challenges, and considerations when choosing an API proxy.

An API proxy works by sitting between a client and a backend service (e.g., an API). When a client sends a request to an API through an API proxy, the following steps typically occur:

1. The client sends a request to the API proxy. The request includes information such as the endpoint URL, headers containing the host information including anything else that is required, the HTTP method, and any other parameters (either as query parameters or in the body of the request).

2. The API proxy receives the request and can do basic security.

3. The API proxy forwards the request to the backend API. This involves establishing a connection to the API and sending the request over that connection.

4. The backend API receives the request, processes it, and sends a response back to the API proxy over the same connection.

5. The API proxy receives the response and processes it. This may involve transforming the response into a format that is compatible with the client.

6. The API proxy sends the response back to the client, which receives the response and processes it as needed.

The below diagram shows these steps in the sequence described:

An API proxy provides a layer of abstraction between a client and a backend service, allowing the client to access the API without needing to know the details of where the backend is hosted.

The API proxy can also add functionality such as security, rate limiting, and protocol transformation improving the reliability, scalability, and security of the API without any need to change the API itself.

Proxies can be of different types depending on the functionality they provide. Some of the most common types are:

• Reverse proxies: A reverse proxy sits between the client and the server and handles requests on behalf of the server. It can be used to protect the server from direct exposure to the internet, handle SSL encryption, and improve performance by caching responses.

• SSL proxy: An SSL proxy is a type of proxy server that can encrypt/decrypt data on behalf of the server/client.

• Transparent proxy: A transparent proxy is well just that. It's transparent to the clients, which means the clients don't know their requests are passing through a proxy server

An AI proxy acts as an intelligent intermediary layer between applications and various AI models, offering unified access and enhanced functionality beyond what a traditional API proxy provides. While an API proxy simply routes and manages HTTP requests, an AI proxy understands and optimizes AI-specific workflows, handling tasks like prompt management, response streaming, model fallbacks, and cost optimization. This specialized middleware can automatically route requests to the most suitable AI model based on factors like performance requirements and pricing, while also implementing caching strategies specifically designed for AI responses. For developers AI proxies reduce development time by being able to write code against a single, consistent interface rather than integrating multiple AI providers separately. The proxy can also implement intelligent batching and queueing of requests, optimize token usage, and maintain persistent connections to AI providers, leading to substantial cost savings. These capabilities make AI proxies particularly valuable for organizations using multiple AI models or looking to avoid vendor lock-in while maximizing the efficiency of their AI infrastructure.

Some common use cases for API proxies include:

• Request forwarding: The primary function of a proxy (including the API proxy) is to forward incoming requests to appropriate backends. In the case of an API proxy, it's an underlying API or service.
• Security: API proxies can be used to add a basic level of security to an API.
• Caching: They can be used to cache responses from an API, reducing the response time for subsequent requests and improving overall performance.
• Load balancing: API proxies can provide load-balancing functionality by routing requests to the appropriate backend server based on factors such as server load, network latency, or geographic location.
• SSL termination: API proxies can handle SSL termination on behalf of the underlying APIs.

Some of the common challenges that can arise when using an API proxy include:

• Limited feature set: When compared to API gateways, API proxies generally offer a reduced set of features when it comes to API full lifecycle management. This includes features like rate limiting or throttling, authentication, and version control which the API proxies generally lack.

• Performance overhead: Since API proxies sit between clients and the backend services, they can introduce additional overhead into the API request/response cycle, particularly when performing features such as rate limiting, transformation, or caching. This overhead can increase latency, reduce throughput, and impact overall performance.

• Security risks: API proxies provide a basic level of security that is generally not adequate enough for larger organizations where integration with other OAuth systems may be required.

• Developer experience: API proxies don't provide all the features that improve the developer experience (which can speed up time to market) such as developer portals, registration to use underlying APIs, generating automated credentials for developers, and more.

• Integration: It's important to choose a proxy that integrates well with your existing systems, particularly the authentication/authorization systems where you maintain your users. This also comes into play when you are trying to integrate into your existing observability tools.

• Cost: API proxies can vary widely in cost from free open-source solutions to expensive enterprise-level products. It's important to choose a proxy that fits within your budget and provides the features and functionality you need. Costs will be divided into licensing costs of an enterprise-level product and the infrastructure costs of running the API proxy, so it's important to consider both.

• Security consideration: It's important to choose a proxy that provides robust security features such as authentication, authorization, and encryption, otherwise you risk exposing your services to security attacks.

• Easy to use: It's crucial to choose a proxy thats easy to use and provides a user-friendly interface and documentation. API proxies can vary in ease of use, with some solutions requiring significant technical expertise to configure and maintain

• Performance: Since API proxies sit between the client and the backend services, they add an additional hop on the network and can introduce performance overhead. It's important to choose a proxy that provides good performance and scalability and can handle high volumes of traffic.

An API proxy sits between a client and an API, providing an access point to the API with additional functionality such as security, caching, or rate limiting, without requiring changes to the API.

Reverse proxies, SSL proxies, and transparent proxies are common types of proxies, each providing specific functionalities.

When a client sends a request to an API through an API proxy, the proxy forwards the request to the backend API. The API proxy then forwards the corresponding response back to the client.

API proxies can improve the API's security, caching, load balancing, rate limiting, and logging functionalities. However, they are not as feature-rich as API gateways. They can also introduce challenges around configuration complexity, performance overhead, and security risks.