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

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

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Presentation made at APIDays Mediterranea on the importance and value of APIs as well as on the types business models.

Presentation made at APIDays Mediterranea on the importance and value of APIs as well as on the types business models.

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  • These four categories have distinct revenue models. Some APIs combine elements of several classes.
  • This breakdown is not 100% comprehensive, but many currently public APIs can be classified against it. We use this at 3scale to identify the primary areas of value being created by an API.
  • Kickapps provides 100% whitelabel social tools/widgets for websites and directly charges partners using it’s service – users of the sites may be unaware that KickApps is in use. Skype enables partners to put “Skype everywhere” (such as on Samsung TVs) but retains brand control and skype users login via third parties.
  • The twitter API is free to use, benefits accrue to twitter via the content which is uploaded, other indicators have to be used to measure revenue impact. Oodle.com is a large affiliate driven marketplace, the API allows high levels of custom content display on third party sites to drive traffic to Oodle. Note though that twitter also sells access to it’s firehose API – but this isn’t yet the core value of the API.
  • This category uses the API as a dynamic promotion channel – providing useful but limited content / features to third parties in order to promote usage of the core service. eBay, Amazon and others engage in this through affiliate programs – the API “supports” the affiliate program by allowing third parties to “suck out” exactly the right product meta data to display to their users. Amazon also exposes valuable product popularity data in order to help partners what to display.
  • This category uses the API as a dynamic promotion channel – providing useful but limited content / features to third parties in order to promote usage of the core service. eBay, Amazon and others engage in this through affiliate programs – the API “supports” the affiliate program by allowing third parties to “suck out” exactly the right product meta data to display to their users. Amazon also exposes valuable product popularity data in order to help partners what to display.
  • This category uses the API as a dynamic promotion channel – providing useful but limited content / features to third parties in order to promote usage of the core service. eBay, Amazon and others engage in this through affiliate programs – the API “supports” the affiliate program by allowing third parties to “suck out” exactly the right product meta data to display to their users. Amazon also exposes valuable product popularity data in order to help partners what to display.

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

  • APIs for Biz Dev 2.0Which Business Model?Guillaume Balashttp://www.3scalet.net - @3scaleguillaume@3scale.net - @guillaumebalas
  • The Plug & Play Cloud API ManagementPlatform & Infrastructure2Application Programming InterfaceDefinition“A particular set of rules and specifications that asoftware programcan follow to access and make use of the services and resourcesprovided by another particular software program that implementsthat API.It serves as an interface between different softwareprogramsand facilitates their interaction, similar to the way the userinterface facilitates interaction between humans and computers.”
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureApplication Programming InterfaceAlternatives“We are nearing the time whenopening our supply chainsacross the Web isn‟t just agood idea, it will be essentialfor competitive survival.Dion Hinchcliffe, ZDNet“APIs provide a scalable way todo business development andcreate partnerships. “BizDev2.0. I call it”.Caterina Fake, FlickrPAIppsartnersncomeAdam DuVander,3
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureWeb sites are localThere was 645 Million Web sites as of March 2012Disadvantages:Limited reachLost businessopportunitiesVery Limited brandawarenessSignificant SEO and SEMcostsWeb scraping risksSource: Dion Hinchcliffe, http://blogs.zdnet.con/Hinchcliffe4
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureAPIs help you grow your businessAPIs – The first paradigm shiftAdvantages:APIs unlock new distributionchannels & enable the expansionof your business beyond the limitsof your web site.Source: Dion Hinchcliffe, http://blogs.zdnet.con/Hinchcliffe51%11%38%API Deployment FocusMulti-ChannelMobile AppsNon-Mobile5
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureCreate NewDistributionChannelsAPIs Deliver Raw Data, Content and ServicesAllowing you to…Partner UpPower MobileAppsBuild anEcosystemProtect IPRDecrease yourcost of servingyour customerServe any typeofdevice, software, anywhere“Externalize”your R&D.FosterInnovationLower Barriersto IntegrationCreate NewBusinessModelsRationalize &Control accessto yourresourcesReach MoreCustomers6
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureAPIs Deliver Raw Data, Content and ServicesStrategic AdvantageNew Revenue StreamsBusiness AdvantageGenerating7
  • The Plug & Play Cloud API ManagementPlatform & Infrastructure1.1B / Day (April „11)3B / Day (March „09)APIs are growing & reshaping the new WebThis is not a trend, this is a fact5B / Day (April „10)5B / Day (Oct „09)13B / Day (May „11)1B / Day (Q1 „12)50% Traffic (March „08)Success for these businesses isheavily relying on their API(s)9,000 APIs8
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureInterest is broad and deep. APIs are currently reshaping the web, anddisrupting some industries: telecoms, payments, etc!APIs are everywhereExamplesMedia & ContentSocial & e-Commerce OthersSaaS Integration9
  • The Plug & Play Cloud API ManagementPlatform & Infrastructure9,000 APIs: that’s just the tip of the IcebergPrivate for PartnersPrivate (for Now)Truly PrivateAt 3scale we actuallybelieves that there is5x to 10x this number outthere.With an approximated100% annual growth, thatwould mean around 1Million APIs by 201710
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureSO WHAT NOW?An API?11
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureThe API is “just” the channel intothis.12It is the organization‟s corebusiness whichis valuable.
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureWhat API for my BusinessModel?Therefore the question is…13
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureAPI business strategyGet the most from your APIAPIs enable cloud scale MVC,dematerializing distributionchannels,and allowing you to focus on yourcore asset.14
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureAPI business strategyGet the most from your API① Identify your coreasset② Choose thecomplementaryasset which willdeliver most value③ Define the strategyto capture thevalue mosteffectivelyExamples of API Business StrategyPres. Logic Data Mission✓Simplify the worldof telecom byprovidingsimple, powerful, pay-as-you-go IaaS✓Increase the worldsaccess to musiclyrics.✓Revolutionize theway people watchmovies15
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureAPI openness cycleConceptCOREASSETSRawServiceMesure, Collect, AnalyzeInternal Re-UseInterDepts, Dashboards, ProcessesCustomerRe-UseApps, IntegrationPartners &DistributionNew Revenue, NewReach, EcosystemOpen toAnybody1000 Flowers, Market Extension16
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureAPI business modelAnother paradigm shiftSource: John Musser, ProgrammableWeb.com17
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureAPI deliveryHow?PartnersAffiliatesMobile UsersInternalProjectsDevelopersCustomersYour coreassetsYourAPI18
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureAPI deliveryHow?PartnersAffiliatesMobile UsersInternalProjectsDevelopersCustomersYour content &servicesYourAPISecurity?Monitoring?Access Control?User Experience?Monetizing ?Scalability?Flexibility?Reach?19
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureAPI Management“Managing” your API operationsPartnersAffiliatesMobile UsersInternalProjectsDevelopersCustomersYour content &servicesYourAPIAPIBusinessEngineAccess Control& SecurityAnalytics &ReportingDeveloper &Partner PortalBilling &PaymentsAPI Management Solution20
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureDon‟t just build it and thinkthey will come…You might wait verylong…API Promotion21
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureAPIS TYPOLOGYBusiness Opportunities22
  • The Plug & Play Cloud API ManagementPlatform & Infrastructure4 types of business APIsFirst it’s worth thinking about the different functional roles of an APIe.gThe API is the product1The API projects the product2The API powers and feeds the product4The API promotes the product323
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureIs the product• Direct revenue• Utility / Pay pertransaction• Tiered pricingbandsProjects theproduct• Reach moreplaces• Provides moreutility• Enable mobile• Allow deeperintegrationPromotes theproduct• Biz Dev / LeadGen• User acquisition• Advertising• Brand promotion• AffiliateprogramsPowers andfeeds theproduct• Contentacquisition• Partner tie-in• Internalinnovation1 2 3 4Digging deeperEach type of API has different potential business value associated with it24
  • The Plug & Play Cloud API ManagementPlatform & Infrastructureis the productprojects theproductThe only customer experience may bevia the API or via a 3rd party using theAPI.Billing relationship may be to the enduser or the partner / distributor.Whitelabel Channel“Sell Through” Channele.gDirect RevenuesThe API as a direct revenue driverIs the product Enable mobile• Allow deeperintegrationPromotes theproduct• Biz Dev / LeadGen• User acquisition• Advertising• Brand promotion• Affiliate programsPowers and feedsthe product• Contentacquisition• Partner tie-in• Internalinnovation1 2 3 425
  • The Plug & Play Cloud API ManagementPlatform & Infrastructurepromotes theproductfeeds theproductThe API plays a supporting role – theproduct is the main event. The billingrelationship is unlikely to be tied to theAPI.API ROI needs to be measured byproduct metrics.“Free” Modality“Affiliate” Modalitye.gIndirect RevenuesThe API as a indirect revenue driverIs the product• Direct revenue• Utility / Pay pertransaction• Tiered pricingbandsProjects theproduct• Reach moreplaces• Provides moreutility• Enable mobile• Allow deeperintegrationPromotes theproduct• Biz Dev / LeadGen• User acquisition• Advertising• Brand promotion• Affiliate programsPowers and feedsthe product• Contentacquisition• Partner tie-in• Internalinnovation1 2 3 426
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureAPIS & BUSINESS MODELS EXAMPLESBusiness Opportunities27
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureOthersBrings easy accessto complex Telecomtechnologiese.gEcosystemStrategyDirect customer usageEncourage resellersBuild tech knowledgeEncourage 3rd party toolsEnable new services$ If Core service sees usage growth.APIAPI is Core ValueThe API Is the productCore value is tied up in the API28
  • The Plug & Play Cloud API ManagementPlatform & Infrastructure1,700+ Apps onForce.com50k+ Developerse.gEcosystemStrategyCultivate partner ecosystemInnovation opportunitiesBuild switching costsEnables new servicesEncourage 3rd party tools$ IfIncreasing customer spend (primary) andnumber of customers (secondary) for coreproductThe API Projects the productExtends availability of functionalities to new placesOthersMobile apps3rd Parties integrationAdded utilityAdded to a productAPI29
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureEcosystemStrategyDistribute “Teaser” informationBrand DiffusionPromote to nichesImprove partners ImpactCultivate partners10‟s 1000‟s of affiliatesWidgets toWhole sites powerede.gOthers$ If Increasing customer number (primary) andspend (secondary) on core productAPISecondary (non core) serviceDesigned to drive leads/trafficWidgetThe API Promotes the productSecondary function and indirect revenue impact30
  • The Plug & Play Cloud API ManagementPlatform & Infrastructure13 Billion calls/day on API>75% of traffic by API250,000 Apps (probably lessnow…)e.gOthersEcosystemStrategyLeverage social networksBrand DiffusionFacilitate AccessImprove partners & businessesImpactVirtuous circle data in/out$ Ifwhen UGC (user generated content) bringsappreciable value to the central productAPIContent, Userinformation,Ratings, commentsEtc. into the serviceThe API Powers & Feeds the productContent acquisition via the API31
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureConclusionWhat API(s) for my BusinessModel? What are my core assets? Who will use my API(s) and for whatpurpose? How will I make available myAPI(s)?23.60%26.30%20.10%7.20%12.50%10.40%Business ModelsDiversityAPI is the ProductProduct AdditionIt is the organization’s corebusiness which is valuable andthe API is just the channel intothis.32
  • ThePlug&PlayCloudAPIManagementPlatform&InfrastructureYour API is the product?Extends the reach of yourproduct?Promotes your product?Makes your product better, richer?Business Partners?Customers?Developers?Your Company?User Experience?Business Model?Marketing, Promotion?Technology choice?WHATWhat is your API?WHOWho will use yourAPI?HOWHow do you offeryour API?Facilitate the integration of your productin as many devices, services or softwareprovided by your business partners(e.g. Samsung & Skype, Spotify &7Digital)Sell your product (content, data orservices) directly to clients through yourAPI(e.g. Twilio, Daily Telegraph, LiveOps)“Outsource” your R&D to Developers.Tap into their fantastic creativity andinnovation skills to evolve your product(e.g. Twilio, Salesforce)Make it easier, faster and more flexible touse/access your assets. Homogenizeand 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? PrivateBeta, Public Beta? Use cases?(e.g. Viadeo Dev Challenge)Authorization, provisioning and control ofaccesses? Usage Tracking?Proxy versus Plugin API Managementsolution?Calls/requests to your API are theprimary (only?) way to interact with yourtechnology, data, content(e.g. Twillio, AmazonAWS, SImpleGeo, Musixmatch )Your API is a way for your partners tomake their customers experience yourproduct via their ownapps, 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 newcontent/value "into” your business thatgoes to make up part of the service.(e.g. Twitter, eBay, Facebook)33
  • The Plug & Play Cloud API ManagementPlatform & Infrastructure343scale SPAINCalle Llacuna 162-16408018 BarcelonaSpain+34 933 092 7863scale USA450 Townsend StreetSan Francisco, CA 94107USA+1 (408) 524 1503Thank you !guillaume@3scale.net@guillaumebalas, @3scaleWe make awesome API Managementsolutionshttp://www.3scale.net
  • The Plug & Play Cloud API ManagementPlatform & InfrastructureResources• 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-201235