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How do APIs work?

So I am trying to connect Office 365 and WebMerge together so that data can be extrapolated from Excel.  How exactly does this whole API process work.  Do both applications need to typically have an API id and secret or just one?  What exactly is an API and how does it work?
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Scott Fell
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It seems like WebMerge uses this Client ID and secret to establish the connection.  Wouldn't it just be as getting this information from the Microsoft side and then the connection is established?

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Ok, I will.  At the end of the day, webmerge will be used for Excel online, but imagine everything mentioned still applies.
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Ok, I think we are looking at integromat also
It looks like zapier is free with a Microsoft account.  I'm guessing that might be a good way to go.  So would I still need any of the client ID and secret in setting it up with zapier?  It seems I would only need that if it was a direct connection.
When you set up the zap, it walks you through the process of connecting. If you are not logged in, you get the pop up to log in, then authorize. Otherwise, just authorize. In this case, you don't have to do anything else.