Mediterranea.apidays.io 2013: APIs for Biz Dev 2.0 - Which business model?

APIs for Biz Dev 2.0Which Business Model?

Guillaume Balashttp://www.3scalet.net - @3scale

[email protected] - @guillaumebalas

http://www.3scalet.net/

The Plug & Play Cloud API Management Platform & Infrastructure

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Application Programming InterfaceDefinition

“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.”


Application Programming InterfaceAlternatives

“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,

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

Disadvantages:Limited reachLost business opportunities

Very Limited brand awareness

Significant SEO and SEM costs

Web scraping risksSource: Dion Hinchcliffe, http://blogs.zdnet.con/Hinchcliffe

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APIs help you grow your businessAPIs – The first paradigm shift

Advantages:APIs unlock new distribution

channels & enable the expansion of your business

beyond the limits of your web site.

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

51%

11%

38%

API Deployment Focus

Multi-Channel

Mobile Apps

Non-Mobile

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Create New Distribution

Channels

APIs Deliver Raw Data, Content and Services

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

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APIs Deliver Raw Data, Content and Services

Strategic Advantage

New Revenue Streams

Business Advantage

Generating

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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)9,000 APIs

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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

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9,000 APIs: that’s just the tip of the Iceberg

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

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SO WHAT NOW?An API?

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The API is “just” the channel into this.

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It is the organization’s core business which

is valuable.


What API for my Business Model?

Therefore the question is…

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API business strategyGet the most from your API

APIs enable cloud scale MVC,

dematerializing distribution channels,

and allowing you to focus on your core asset.

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API business strategyGet the most from your API

① Identify your core asset

② Choose the complementary asset which will deliver most value

③ Define the strategy to capture the value most effectively

Examples of API Business Strategy

Pres.LogicData Mission

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

✓ Increase the world's access to music lyrics.

✓ Revolutionize the way people watch movies

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API openness cycleConcept

CORE ASSET

S

Raw ServiceMesure, Collect,

Analyze

Internal Re-Use

Inter Depts, Dashboards, Processes

Customer Re-Use

Apps, Integration

Partners & DistributionNew Revenue, New Reach,

Ecosystem

Open to Anybody

1000 Flowers, Market Extension

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API business modelAnother paradigm shift

Source: John Musser, ProgrammableWeb.com

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API deliveryHow?

Partners

Affiliates

Mobile Users

Internal Projects

Developers

CustomersYour core

assets

Your API

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API deliveryHow?

Partners

Affiliates

Mobile Users

Internal Projects

Developers

CustomersYour content &

services

Your API

Security?

Monitoring?

Access Control?

User Experience?

Monetizing ?

Scalability?Flexibility?

Reach?

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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

API Management Solution

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

You might wait very long…

API Promotion

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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

The API promotes the product3

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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

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

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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

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

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APIS & BUSINESS MODELS EXAMPLES

Business 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

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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

Others

Mobile apps3rd Parties integrationAdded utilityAdded to a product

API

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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

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 Diversity

API is the ProductProduct Addition

It is the organization’s core business which is valuable and the API is

just the channel into this.

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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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08018 BarcelonaSpain

+34 933 092 786

3scale USA 450 Townsend StreetSan Francisco, CA 94107

USA+1 (408) 524 1503

Thank you [email protected]

@guillaumebalas, @3scale

We make awesome API Management solutions

http://www.3scale.net

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

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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

