apis for biz dev 2.0 - which business model?

APIs for Biz Dev 2.0Which Business Model?

Guillaume Balas - CMO @[email protected] - @guillaumebalas

The Plug & Play Cloud API Management Platform & Infrastructure

THE RISE OF THE APISIntroduction

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1.1B / Day (April ‘11)

3B / Day (March ‘09)

APIs are growing & reshaping the new WebThis is not a trend, this is a fact

5B / Day (April ‘10)

5B / Day (Oct ‘09)

13B / Day (May ‘11)

1B / Day (Q1 ‘12)

50% Traffic (March ‘08)

Success for these businesses is heavily relying on their

API(s)8,000 APIs

3


8,000 APIs: that’s just the tip of the Iceberg

4

Private for Partners

Private (for Now)

Truly Private

At 3scale we actually believes that there is 5x to 10x this number

out there. With an

approximated 100% annual growth, that

would mean around 1 Million APIs by 2017


Interest is broad and deep. APIs are currently reshaping the web, and disrupting some industries: telecoms, payments,

etc!

APIs are everywhereExamples

Media & Content

Social & e-Commerce Others

SaaS Integration

5


API 101What is an API ?

6


7

Application Programming InterfaceTech. Definition

“A particular set of rules and specifications that a software program can follow to access and make use of the services and resources provided by another particular software

program that implements that API.

It serves as an interface between different software

programs and facilitates their interaction, similar to the way the

user interface facilitates interaction between humans and computers.”


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Application Programming InterfaceA Business Definition

“We are nearing the time

when opening our supply chains across the Web isn’t just a good idea, it will be essential for competitive survival.

Dion Hinchcliffe, ZDNet

“APIs provide a scalable way

to do business development and create partnerships. “BizDev 2.0. I call it”.

Caterina Fake, Flickr

PA

I

pps

artners

ncomeAdam DuVander,


WHY IS IT IMPORTANT?API

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Web sites are localThere was 645 Million Web sites as of March 2012

Disadvantages: Limited reach Lost business opportunities Very Limited brand

awareness Significant SEO and SEM

costs Web scraping risks

10

Source: Dion Hinchcliffe, http://blogs.zdnet.con/Hinchcliffe


APIs help you grow your businessAPIs are Biz Dev 2.0 – The first paradigm shift

Advantages:APIs unlock new distribution

channels & enable the expansion of your business

beyond the limits of your web site.

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Source: Dion Hinchcliffe, http://blogs.zdnet.con/Hinchcliffe

51%

11%

38%

API Deployment Focus

Multi-Channel

Mobile Apps

Non-Mobile


Create New Distribution

Channels

APIs Deliver Raw Data, Content and Services

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Allowing you to…

Partner Up Power Mobile Apps

Build an Ecosystem

Protect IPR

Decrease your cost of serving your

customer

Serve any type of device,

software, anywhere

“Externalize” your R&D.

Foster Innovation

Lower Barriers to Integration

Create New Business Models

Rationalize & Control

access to your

resources

Reach More Customers


APIs Deliver Raw Data, Content and Services

13

Strategic Advantage

New Revenue Streams

Business Advantage

Generating


SO WHAT NOW?An API?

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15The Plug & Play Cloud API Management Platform & Infrastructure

Don’t put lipstick on a pig.

It will still be a pig…

Take away #1


Don’t just build it and think they will come…

Take Away #2

You might wait very long…


It is the organization’s core business which is valuable.

The API is “just” the channel into this.

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Take Away #3


What API for my Business Model?

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Take Away #4


API STRATEGY 101So what now?

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API business strategyGet the most from your API

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APIs enable cloud scale MVC, ① Identify your core asset② Choose the complementary

asset which will deliver most value

③ Define the strategy to capture the value most effectively

allowing you to focus on your core asset.

Examples of API Business Strategy

Presentation Logic Data Mission

✓Simplify the world of telecom by providing simple, powerful, pay-as-you-go IaaS

✓Increase the world's access to data, especially free and open data

✓Revolutionize the way people watch movies


API typologyConcepts

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Private APIsThey are used internally to facilitate the integration of different applications/systems used by your company.

Partners APIsEnable the integration of software between your organization and your business partners.

Public APIsPublicly expose information and functionality of one or various of your systems/applications to 3rd that don’t necessarily have a business relationship with your company

RationalesRationalize infrastructureReduce costsIncrease flexibility Improve internal operations

Value-added serviceUp sellMust have for your partners

Foster innovationIncrease reach, trafficNew revenue stream

Typical Evolution of an API 1

1 Not necessarilly always the case (e.g musiXmatch, Viadeo, Skype)


API openness cycleConcept

22

CORE ASSET

S

Raw Service

Mesure, Collect, Analyze

Internal Re-Use

Inter Depts, Dashboards, Processes

Customer Re-Use

Apps, Integration

Partners & Distribution

New Revenue, New Reach, Ecosystem

Open to Anybody

1000 Flowers, Market Extension


API business modelAnother paradigm shift

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Source: John Musser, ProgrammableWeb.com


API deliveryHow?

24

Partners

Affiliates

Mobile Users

Internal Projects

Developers

CustomersYour core

assets

Your API


API deliveryHow?

25

Partners

Affiliates

Mobile Users

Internal Projects

Developers

CustomersYour content &

services

Your API

Security?

Monitoring?

Access Control?

User Experience?

Monetizing ?

Scalability?Flexibility?

Reach?


API Management“Managing” your API operations

Partners

Affiliates

Mobile Users

Internal Projects

Developers

CustomersYour content &

services

Your API

AP

I B

usin

ess

En

gin

e

Access Control & SecurityAnalytics & ReportingDeveloper & Partner PortalBilling & Payments

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API Management Solution

Th

e P

lug

& P

lay C

loud A

PI M

an

agem

en

t Pla

tform

& In

frast

ruct

ure

Your API is the product?

Extends the reach of your product?

Promotes your product?

Makes your product better, richer?

Business Partners?

Customers?

Developers?

Your Company?

User Experience?

Business Model?

Marketing, Promotion?

Technology choice?

WH

AT What is your API?

WH

O Who will use your API? H

OW How do you offer

your API?

Facilitate the integration of your product in as many devices, services or software provided by your business partners(e.g. Samsung & Skype, Spotify & 7Digital)

Sell your product (content, data or services) directly to clients through your API(e.g. Twilio, Daily Telegraph, LiveOps)

“Outsource” your R&D to Developers. Tap into their fantastic creativity and innovation skills to evolve your product(e.g. Twilio, Salesforce)

Make it easier, faster and more flexible to use/access your assets. Homogenize and centralize access to your data.(e.g. Netflix, Seevl, The Guardian, NPR)

SDK? Widget? Interaction and Support?T&C and SLAs proposed? Blogs? Forum? Documentation?

Direct/Indirect? Tiered/Freemium? Revenue sharing? White labeling? Partnerships?

(e.g. Bluevia, Wine.com, PeopleBrowsr)

Hackathons, Dev. Challenges? Private Beta, Public Beta? Use cases?(e.g. Viadeo Dev Challenge)

Authorization, provisioning and control of accesses? Usage Tracking? Proxy versus Plugin API Management solution?

Calls/requests to your API are the primary (only?) way to interact with your technology, data, content(e.g. Twillio, Amazon AWS, SImpleGeo, Musixmatch )

Your API is a way for your partners to make their customers experience your product via their own apps, devices, solution or service(e.g. Skype, Maxdome, 7Digital)

Advertise your product in different ways - such as via an affiliate program.(e.g. Wine.com, Oodle.com)

Your API is a channel to get new content/value "into” your business that goes to make up part of the service.(e.g. Twitter, eBay, Facebook)

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RECOMMENDATIONSConclusion

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Dos & Don’tsTips and tips to avoid pitfalls

Dos① API first, Mobile second, Web

third

② Do your homework (Who, What, How)

③ Start “small” in terms of functionalities (you can always add but you can never remove)

④ Provide a compelling value proposition to drive adoption and grow your API ecosystem

⑤ Remain flexible to evolve with the needs of your user base

Don’ts① API as a “side project”

② Neglect developers

③ Bad documentation (or inexistent)

④ Bad sample code/examples (or inexistent)

⑤ No or unclear Terms & Conditions

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APIS TYPOLOGYBusiness Opportunities

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4 types of business APIsFirst it’s worth thinking about the different functional roles of an API

e.g

The API is the product1

The API projects the product2

The API powers and feeds the product4

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The API promotes the product3


Is the product

• Direct revenue• Utility / Pay per

transaction• Tiered pricing

bands

Projects the product

• Reach more places

• Provides more utility

• Enable mobile• Allow deeper

integration

Promotes the product

• Biz Dev / Lead Gen

• User acquisition

• Advertising• Brand

promotion• Affiliate

programs

Powers and feeds the product

• Content acquisition

• Partner tie-in• Internal

innovation

1 2 3 4

Digging deeperEach type of API has different potential business value associated with it

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is the product

projects the product

The only customer experience may be via the API or via a 3rd party using the API.

Billing relationship may be to the end user or the partner / distributor.

Whitelabel Channel

“Sell Through” Channel

e.g

Direct RevenuesThe API as a direct revenue driver

33

Is the product

Enable mobile• Al

low deeper integration




• Advertising

• Brand promotion

• Affiliate programs

Powers and

feeds the product


• Partner tie-in

• Internal innovation

1 2 3 4


promotes the product

feeds the product

The API plays a supporting role – the product is the main event. The billing relationship is unlikely to be tied to the API.

API ROI needs to be measured by product metrics.

“Free” Modality

“Affiliate” Modality

e.g

Indirect RevenuesThe API as a indirect revenue driver

34

Is the product

• Direct revenue

• Utility / Pay per transaction

• Tiered pricing bands

Projects

the product

• Reach more places

• Provides more utility

• Enable mobile

• Allow deeper integration




• Advertising

• Brand promotion

• Affiliate programs

Powers and

feeds the product


• Partner tie-in

• Internal innovation

1 2 3 4


APIS & BUSINESS MODELSBusiness Opportunities

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Others

Brings easy accessto complex Telecom technologies

e.g

Ecosystem

Strategy

Direct customer usage

Encourage resellers

Build tech knowledge

Encourage 3rd party tools

Enable new services

$ If Core service sees usage growth.

API

API is Core Value

The API Is the product Core value is tied up in the API

36


1,700+ Apps on Force.com50k+ Developers

e.g

Ecosystem

Strategy

Cultivate partner ecosystem

Innovation opportunities

Build switching costs

Enables new services

Encourage 3rd party tools

$ IfIncreasing customer spend (primary) and number of customers (secondary) for core product

The API Projects the productExtends availability of functionalities to new places

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Others

Mobile apps3rd Parties integrationAdded utilityAdded to a product

API


Ecosystem

Strategy

Distribute “Teaser” information

Brand Diffusion

Promote to niches

Improve partners Impact

Cultivate partners

10’s 1000’s of affiliates

Widgets to Whole sites powered

e.g

Others

$ If Increasing customer number (primary) and spend (secondary) on core product

API

Secondary (non core) serviceDesigned to drive leads/traffic

Widget

The API Promotes the product Secondary function and indirect revenue impact

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13 Billion calls/day on API>75% of traffic by API250,000 Apps (probably less now…)

e.g

Others

Ecosystem

Strategy

Leverage social networks

Brand Diffusion

Facilitate Access

Improve partners & businesses Impact

Virtuous circle data in/out

$ If when UGC (user generated content) brings appreciable value to the central product

API

Content, User information,Ratings, commentsEtc. into the service

The API Powers & Feeds the product Content acquisition via the API

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Conclusion

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What API(s) for my Business Model?

What are my core assets? Who will use my API(s) and for what

purpose? How will I make available my API(s)?

23.60%

26.30%20.10%

7.20%

12.50%

10.40%

Business Models Di-versity

API is the Product Product AdditionProduct Projection GovernmentScientific Non-Profit

Don’t put lipstick on a pig, it will still be a pig…

Don’t just build it and think they will come…

It is the organization’s core business which is valuable and the API is the channel into this.


QUESTIONS & ANSWERSThank you !

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Thank you ! | Q&A Web: http://www.3scale.net

Email: [email protected] Twitter: @guillaumebalas

http://www.3scale.net/


Resources

• http://www.3scale.net/wp-content/uploads/2012/06/What-is-an-API-1.0.pdf• http://www.youtube.com/watch?feature=player_embedded&v=7r7QpIDEI_

o• http://www.slideshare.net/3scale/apis-the-glue-of-cloud-computing• http://blog.programmableweb.com/2012/06/13/the-new-api-apps-partners

-income/• http://www.youtube.com/watch?v=lFv5lH7nNX8• http://www.slideshare.net/3scale/more-than-the-sum-of-its-parts-the-apis-

whole• http://blog.programmableweb.com/2011/11/03/private-api/• http://www.slideshare.net/3scale/reaching-1-million-apis-and-what-to-do-w

hen-we-get-there

• http://blog.apievangelist.com/2011/02/28/if-you-build-it-they-will-come/• http://www.slideshare.net/jmusser/j-musser-apishotnotgluecon2012• http://www.3scale.net/2012/11/building-great-apis-the-api-gold-standard-pa

rt-i/

• http://www.slideshare.net/3scale/the-api-economy-api-provider-perspective-european-identity-summit-2012

http://blog.programmableweb.com/2012/06/13/the-new-api-apps-partners-income/












http://www.youtube.com/watch?v=lFv5lH7nNX8



http://www.slideshare.net/3scale/more-than-the-sum-of-its-parts-the-apis-whole

http://www.slideshare.net/3scale/more-than-the-sum-of-its-parts-the-apis-whole

http://blog.programmableweb.com/2011/11/03/private-api/

http://blog.programmableweb.com/2011/11/03/private-api/

http://www.slideshare.net/3scale/reaching-1-million-apis-and-what-to-do-when-we-get-there



http://blog.apievangelist.com/2011/02/28/if-you-build-it-they-will-come/

http://blog.apievangelist.com/2011/02/28/if-you-build-it-they-will-come/

http://www.slideshare.net/jmusser/j-musser-apishotnotgluecon2012

http://www.slideshare.net/jmusser/j-musser-apishotnotgluecon2012

http://www.3scale.net/2012/11/building-great-apis-the-api-gold-standard-part-i/



http://www.slideshare.net/3scale/the-api-economy-api-provider-perspective-european-identity-summit-2012

