cc: NeilsPhotography - https://www.flickr.com/photos/21976354@N07
The Art of Fly Fishing and the Cognitive Economy
Campbell RobertsonPublic Sector Lead – IBM Cognitive [email protected]@Campbell_Tech
The Art of Fly Fishing
Matching the Hatch
• Knowledge
• Equipment
• Technique
cc: Michael Elleray - https://www.flickr.com/photos/36021014@N06
Match the Hatch - Knowledge
• Canadian Economy & Speed of Innovation
• Demand information
• Old ways do not provide capability to expand
• S&T needs to be re-invigorated
• Communication Research Centre
• Limits to collaboration
• ICT and HPC is needed
• Cloud Drives Lower Cost to Participate
• Data Gravity
• API and Cognitive Computing Driven Economy
• “Evidence Based” Decisions – Reduce the Noise
cc: Halans - https://www.flickr.com/photos/48889073931@N01
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The Canadian Economic Climate – Match the HatchCanadian Chamber of Commerce - Top 10 Barriers to Competitiveness 2016
1. Public policies block small companies from becoming biggerCanada has tax barriers and policies in place that keep its small businesses from growing into big businesses with more resources to hire, invest and innovate.
2. Canada is vulnerable to cyber crimeCanada loses $3.12 billion to cyber crime per year, and nearly half of
all small businesses have been the victim of a cyber attack because
they are less equipped to handle attacks.
3. Canada needs a more aggressive and effective innovation strategyCanada needs to reinvest in an innovation ecosystem that
supports the capability of business to rapidly respond to change.
4. Canada’s trade agenda—new agreements are just the start
Canada has been aggressive in pursuing new trade agreements over
the past few years but its businesses continue to face substantial
barriers expanding abroad, and Canadian exporters are falling behind
in key markets like China.
5. Canadian resources cannot get to world marketsCanada’s trade and foreign investment flows depend on natural
resources and its future economic prosperity depends upon its ability
to provide reliable infrastructure to allow Canadian energy resources to
fuel Asian economic growth at world market prices.
6. Poor literacy, numeracy and digital skills are limiting productivity in
segments of Canada’s workforce Half of Canadians do not have the
levels of literacy, numeracy and digital problem solving skills they need
to compete in today’s economy.
7. Canada is not ready for climate changeCanada must keep pace to maintain its competitiveness as a location for investment and a source of products.
8. Internal barriers to trade cost Canadians billions and restrict investmentThe Canadian economy remains divided by artificial barriers to
trade and labour mobility that frustrate business investment and
cost consumers billions of dollars every year.
9. Lack of clarity regarding businesses’ responsibilities to Aboriginal peoples constrains investmentCanada needs meaningful reconciliation with its Aboriginal peoples.
10. Canada’s brand does not support business competitiveness
A strong business brand would encourage foreign direct
investment in Canada, increase awareness of Canadian export
products and support Canada’s tourism industry.
4x90% 100% 75Bincrease in cloud
investment vs 2013of data created in the last 2 years
of LOB apps will be mobile first by 2017
internet connected devices by 2020
Why ? …. Well because a digital disruption is underway
Escalating client
expectations+
Customer centricity is the only differentiator in today’s world
Intensifying
competition
Increasing
complexity+
= differentiated experience matters
The way we reach and understand customers is evolving
Websites
Connected Appliances
Partners Websites
Internet TVs Smartphones
Tablets
Game Consoles
Connected Cars
Millions 1993 - 2000 Trillions 2013+
APIs
Application Program Interface
APIs
• Leverage business functions and execute actions
• Exchange information between information sources (such as events, services, information or data stores) or a combination of all of these
Big Data Assets
Big data sources provide insights that are shared and monetized through APIs
Social Users
Social APIs fuel personalized experiences for users and new business models
Cloud Web Apps
Cloud services are exposed through Web APIs enabling rapid composition environments
Mobile Apps
Mobile applications make calls to back end services through Web APIs
Externalization Consumption
Integrated and enabled by an API
economy
APIs are giving rise to “dynamic business composition”
APIs are a fast path to new business opportunities
and growth is accelerating dramatically
By 2015, 75% of the Fortune 1000 will offer public Web APIs.
By 2016, 50% of B2B collaboration will take place through Web APIs.
Sources: Gartner, Predicts 2012: Application Development, 4Q, 2011; Gartner, Govern Your Services and Manage Your APIs with Application Services Governance, 4Q 2012; Gartner, Open for Business: Learn to Profit by Open Data, 1Q 2012
Understands natural language and human communication
Adapts and learns from user selections and responses
Generates and evaluates evidence-based hypothesis
…but wait…there is also Cognitive Computing
1
2
3
Retrieve and Rank
13
Message Resonance
Concept Expansion
Face Detection
Natural Language Classifier
Speech to Text
Text to Speech
Language Translation
Language Detection
Sentiment Analysis
Dialog
Retrieve and Rank
Image Link Extraction
Tradeoff Analytics
Entity Extraction
Tone Analyzer
Personality Insights
Taxonomy
Author Extraction
Concept Tagging
Relationship Extraction
Concept Insights
Relationship Extraction
Question & Answer
Feed Detection
Keyword Extraction
Visual Recognition
Image Tagging
Text Extraction
IBM Watson’s APIs are the cognitive building blocks that harness our data.
Leverage Cloud Based APIs to apply cognitive capabilities to your business model
Natural Language Classifier
Tone Analyzer
The Art of Fly Fishing
Matching the Hatch
• Knowledge
• Equipment
• Technique
cc: Michael Elleray - https://www.flickr.com/photos/36021014@N06
Equipment
• Platform as a Service - Speed• Cloud – Low Cost• API - Adaption• Cognitive - Innovation
cc: ottonassar - https://www.flickr.com/photos/90646759@N00
APIs are being adopted at a massive scale
By some estimates, there will be one million APIs before the end of the decade – including cognitive APIs
Currently, there are 9 million developers working on private APIs. As developers see the increasing opportunities, we may see a significant shift to public API development (where there are only 1.2 million developers)
By 2020, it is estimated that 26 billion devices will be using one trillion applications
Public APIs are growing exponentially
13 billionAPI calls/day
1.4 billionAPI calls/day
5 billionAPI calls/day
IBM. “Welcome to the Cognitive Era.” http://www.slideshare.net/ibm/welcome-to-the-cognitive-eraMurphy, Matt. “The Rise of APIs.” Techcrunch.com. May, 2016. https://techcrunch.com/2016/05/21/the-rise-of-apis/DuVander, Adam. “Which APIs Are Handling Billions of Requests Per Day?” ProgrammableWeb blog. May 23, 2012. http://www.programmableweb.com/news/which-apis-are-handling-billions-requests-day/2012/“Gartner Press Release.” Gartner.com. December, 2013. http://www.gartner.com/newsroom/id/2636073
“Producing an API is the only way we are going to … be the
leader of transportation.”
– Head of Developer Relations, Uber
APIs are being used across a number of different industries and platforms
REST APIs for Mobile Apps
Authentication Flow
Vehicle List
Vehicle Status
Vehicle Commands
APIs enable companies to access and enable data from a wide variety of sources
APIs & Information sources
Glickenhouse, Alan “The API Economy and IBM API Management Overview.” https://www-01.ibm.com/events/wwe/grp/grp004.nsf/vLookupPDFs/Integration%20-%20API%20Management/$file/Integration%20-%20API%20Management.pdf
Example of how APIs can be used for information access and integration
Blockchain uses APIs to open up business networks to provide seamless ledger and payment services
• Blockchain enables enterprises to interact more efficiently with transaction time going from days to near instantaneous
• APIs give developers the ability to programmatically control the blockchainnetwork through smart contracts that access internal state storage through state APIs.
• The shared ledger allows third-parties to create and plug-in new value that they can either monetize or place back into the community
Ferris, Chris. IBM’s Open Blockchain: Making Blockchain Real for Enterprises. Developer.ibm.com. April, 2016. https://developer.ibm.com/open/wp-content/uploads/sites/50/2016/06/Open-Blockchain-Charts.pdf
The Art of Fly Fishing
Matching the Hatch
• Knowledge
• Equipment
• Technique
cc: Michael Elleray - https://www.flickr.com/photos/36021014@N06
Technique
• Broker, Create or Consume
• Monetize
• Globalization vs. Nationalization
• Canadian Innovation
• New Partnerships
• New Business Models
• Policy Change in Public Sector
• Unknown = Risk
cc: Tek F - https://www.flickr.com/photos/37431860@N06
The API economy is both driven and enabled by a number of important external forces
Drivers
Enablers
Determine where and how APIs add value to the business
Identify how APIs can add value to the organization, including their impact on the business model and associated revenue streams
Three factors enable companies to compete effectively in the API economy
Manage APIs as a product
Create an engagingAPI experience
Develop a product centric approach regarding how APIs are produced and consumed from ideation through retirement
Deliver a differentiated experience that attracts targeted partners within the ecosystem and creates “customer stickiness”
Business models in the API-centric economy can be broadly divided into three categories
The business model relies on direct sales of products or services
Direct sales can be to an individual consumer or to businesses
APIs provide direct revenue generation for the seller
Transactional
ProductIndirect
Direct consumption of products and services via APIs
Market making enabled by APIs
The business acts as a Market-Maker bringing the consumer and the producer of the services
The business model is akin to that of a broker generating revenue as a commission or fees for the business service provided
Enterprises may leverage more than one business model depending the nature of the APIs and the services they are delivering to the marketplace
This model relies on the ecosystem partners who are responsible for making the sale of the products and services to the end consumer
Sales by the ecosystem partners generate revenue
Ecosystem enablement API-driven sales
Each business model comes with its own set of opportunities and challenges
Direct Consumption Market Making Ecosystem Enablement
Strengths Low costs due to “direct” to consumer business model
High control over API branding and SLAs
Consumer ecosystem accepts even
low-use consumers to achieve acritical mass for effectiveoperations
Ability to scale by leveragingmultiple producers
Ability to provide global footprint by leveraging “local” partners
Access to a wide ecosystem of innovative API mashup offerings
Ease of global expansion for producers of digital goods
Ability to scale by leveraging multiple producers
Ability to provide global footprint by leveraging “local” partners
Challenges Restricted supply chain and sales channel
Lack of incentives for ecosystem partners for promoting adoption
Business viability highly dependent on market liquidity
Impact on brand due to third-party SLA dependency
Low barrier to entry for competitors leveraging similar Capabilities
Revenue dependency on partner sales
Possible impact on brand due to third-party SLA dependency
Possible impact on consumer offering due to differing versions and upgrade paths of constituent producers
Determining the right monetization model is crucial to revenue generation
• Drives Adoptions of APIs
• Typically low valued assets
• Drive brand loyalty
• Enter new channels
For Free
Facebook Login API provides free authentication for any Web / mobile app
Example:
Developer Pays
Business Asset must be of high value to the Developer
For example, marketing analytics, news,
Capabilities such as credit checks
Amazon EC2 Web Services – APIs charge per usage to launch and manage virtual servers.
Example:
Developer Gets Paid
Provides incentive for developer to leverage web API
Ad placements
Percentage of revenue sold product or services
Google AdSense APIs pay developers who include advertising content into apps
Example:
Indirect
Use of API achieves some goal that drives business model.
E.g. Increase awareness of specific content, or offerings
eBay Trading APIs offer developers access to trading services extending the reach of listings and transactions
Example:
Each monetization strategy comes with its own set of opportunities and challenges
Indirect Transactional ProductOpportunities Centralized IT lowers total
cost of ownership and provides superior control of corporate policies, especially privacy, security and regulatory compliance
Low entry barrier for value-add API Mashups
Reduced Capex and tiered Opex lowers risks to early stage usage
Monetization based on the “value” of the service provided
Potential for premium charges for brand value
Challenges Difficult to illustrate direct revenue impacts or tangible benefits
Lack of tangible monetization can impact offering sustainability or growth
Opex costs at sustained high volumes may not be price effective.
Transactional volume may not reflect true value of API usage
Cost variances and pricing instability due to mashups leveraging third-party APIs
Identify potential sourcesof API value
Locate areas in the value chain
where more seamless connectivity
adds value to the organization
Determine which combination of
functionality or data sources are of
value when exposed to internal or
external parties
Identify internal and external
partners whose unique
capabilities should be combined to
deliver new market propositions
Recommendations
Develop the business caseStart small, but design for scalability
Clearly spell out your company’s business goals that drive API creation or consumption
Examine business models and monetization strategies that address the needs of target audiences and internal funding requirements
Evaluate your existing IT infrastructure to understand the technical requirements associated with API development and ongoing support
Consider the development of internal APIs as initial proofs of concept
Set realistic targets for API adoption; recognize that while many public APIs have been successful, some have not
Identify qualified consumers with whom APIs can be tested and quickly ramped up if successful
Develop an appealing “home base” that provides users with a place to go for new innovations, technical updates and other user experiences
Cultivate advocates who are willing to share insights and enable others on the adoption journey
Engage in a dialogue with the community to capture innovations and address concerns
Create your API community
Focus on the brand
Performance = Brand Credibility
API material standard with corporate
Monitor customer perceptions in the marketplace and address accordingly
Recommendations
Use design thinking principles to craft the experience
Help users to “understand the possible” regarding API usage and value
Capture the customer journey to understand users thoughts, actions and feelings during the API adoption journey
Start small and create minimally delightful experiences, then add functionality over time
Example: IBM Bluemix is an “Open” Platform for API Innovation
IBM(Pay per use)
Third Party(Pay per use)
Your Own(including making corporate assets available as new products)
Community(Open source)
• Watson• MobileFirst• Analytics• Big Data• IoT• API Management• DevOps• Secure Gateway
• Docker Containers• Runtimes• MQ• Business Rules• BPM Workflow• Integration• Security• ….More
• Systems of record• Mainframe apps• Databases• Enterprise applications (Oracle, SAP, .…)• Web apps (WebSphere, JBOSS, WebLogic,
etc.)• Any existing business apps.
• Twitter data• Weather data• Open data• Box• Cognitive Scale• Twilio• Blazemeter• New Relic
• SendGrid• PubNub• AMQP• FlowThings• Pitney Bowes• Memcache• Redis• …More
• Java• nodeJS• nodeRED• SWIFT• .NET• Go• PHP
• Python• Ruby• Bring your own
buildpack and framework
Strategy
In what ways are internal or external APIs used by your organization today?
How do you identify existing capabilities in the marketplace that your organization could access through APIs?
What unique digital assets does your organization possess that could be more effectively exploited through the use of APIs?
Experience
How are your APIs viewed from an external brand perspective?
What is the experience of the API developer when using your APIs?
What is your organization doing to foster the promotion and adoption of your APIs?
Product management capability
How effective is the overall process for API lifecycle development in your organization?
How is API adoption integrated into your organization’s digital strategy?
What skills and capabilities could help your organization enhance its API product management capability?
Are you ready for the Digital Economy?
The Art of Fly Fishing
Matching the Hatch
• Knowledge
• Equipment
• Technique
cc: Michael Elleray - https://www.flickr.com/photos/36021014@N06
Ontario Invests in the Innovation Economy with IBM
“Ontario partners with IBM Canada and the Ontario Centres of Excellence (OCE) to help up to 500 small and medium-sized enterprises (SMEs) create jobs, embrace next-generation technologies and compete in the global marketplace.”
• Office of the Premier, Feb 24, 2016
A Valuable New Source of
Talent and Assets for Public
Sector IT Projects
• Q&A
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