APIs for biz dev 2.0 - Which business model to win in the API Economy?

APIs for Biz Dev 2.0

Which Business Model to Win in the API Economy?

Guillaume Balas http://www.3scalet.net - @3scale

[email protected] - @guillaumebalas

_______________

The Plug & Play Cloud API Management Platform & Infrastructure

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THE API ECONOMY Welcome to

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APIs are everywhere, reshaping the web

IoT: 8.7 Billion devices (Rob Soderbery, Cisco Executive, Forbes July 2013)

Internet: 633 Million websites (Netcraft, December 2012 survey)

Mobile: 1.3 Trillion in-app events (Prashant Fuloria, Chief Product Officer for Flurry, MobileBeat 2013)

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… and reshaping all Businesses

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10,000 APIs: just the tip of the Iceberg

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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HOW DID WE GET THERE? But…

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“Software is eating the World”

Marc Andreessen, WSJ, 2011 8


“APIs are the building

blocks of the Digital

economy” Laura Merling, VP Ecosystems and Solutions at AT&T, PWC 2011

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“APIs are eating

Software” Steven Willmott, CEO at 3scale, June 2013

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CONTROL AND UNIFY THE CORE INTERFACES TO YOUR BUSINESS

The need to

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“[APIs] will be essential for competitive survival”

Dion Hinchcliffe, Zdnet, November 2008 12


AN API DRIVEN BUSINESS Towards

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Your organization’s core asset is what is valuable.

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The API is “just” the channel into this.


“What API for my business model?”

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APIs can drive success in 5 different ways:

Mobile Enablement

Customer & Partner ecosystem growth

Digital distribution channels

Powering new business models

Internal efficiency & innovation


KEY CONSIDERATIONS API Business 101

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APIs enable cloud scale MVC,

①  Identify core asset ②  Choose complementary asset which will

deliver most value ③  Define strategy to capture the value most

effectively

allowing you to focus on your core asset.

Examples of 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

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Organization’s core asset MVC analysis framework

Model

Controller View

= Data/Content

Presentation = = Logic

View


CORE ASSETS

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

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Degree of openness The openness cycle


Source: John Musser, ProgrammableWeb.com

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Revenue model Your imagination is your limit


Partners

Affiliates

Mobile Users

Internal Projects

Developers

Customers Your content &

services

Your API

Security? Monitoring?

Access Control?

UX/UI?

Documentation ?

Scalability?

Flexibility? Reach?

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Delivery A Dev Ops & Business decision

Support?


Partners

Affiliates

Mobile Users

Internal Projects

Developers

Customers Your content &

services

Your API

API B

usin

ess E

ngin

e

Access Control & Security

Analytics & Reporting

Developer & Partner Portal

Billing & Payments

API Management Solution

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Delivery A Dev Ops & Business decision


API TYPOLOGY Business Opportunities

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e.g

The API is the product 1

The API projects the product 2

The API powers and feeds the product 4

The API promotes the product 3

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Functional roles 4 Types of APIs


Others

Brings easy access to 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.com 50k+ Developers

e.g

Ecosystem Strategy

Cultivate partner ecosystem Innovation opportunities

Build switching costs

Enables new services

Encourage 3rd party tools

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

The API Projects the product Extends availability of functionalities to new places

Others

Mobile apps 3rd Parties integration Added utility Added 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) service Designed 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 API 250,000 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, comments Etc. into the service

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

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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

Summarizing Each type of API has different potential business value associated with it

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23.60%

26.30% 20.10%

7.20%

12.50% 10.40%

Business Models Diversity

API is the Product Product Addi?on Product Projec?on Government Scien?fic Non-‐Profit

1.  It is the your organization’s core asset which is valuable

2.  The API is the channel into it

3.  What API(s) for your Business Model?

4.  DevOps & Business considerations

5.  Management buy-in and commitment needed

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Conclusion


3scale SPAIN Calle Napols 187, 8

08013 Barcelona Spain

+34 933 092 786

3scale USA. 450 Townsend Street, San Francisco, CA 94107

USA +1 (408) 524 1503

THANK YOU ! [email protected]

@guillaumebalas, @3scale

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Out-of-the-Box API Management solution

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-when-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-part-i/ •  http://www.slideshare.net/3scale/the-api-economy-api-provider-perspective-european-

identity-summit-2012 •  http://www.3scale.net/2013/09/why-your-api-is-your-strategy/ •  http://tnw.co/17Fuqey

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APIs for biz dev 2.0 - Which business model to win in the API Economy?

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