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APIs and Beyond: Open Distribution Platforms


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Presented by Martin Tantow of Booz & Company at the August 2010 API Economy Meetup. Read more of Martin's work at

Presented by Martin Tantow of Booz & Company at the August 2010 API Economy Meetup. Read more of Martin's work at

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  • 1. APIs and BeyondOpen distribution platformsAugust 31st, 2010Martin Tantow,Booz & Company
  • 2. Martin Tantow1 Management consultant with Booz & Company, based in San Francisco Consumer, Media & Digital practice Focus on corporate growth strategies in the digital space (cloud computing, new business models, digital media, etc.) Co-founder of 3scale networks Cloud-based API management solution Analysis, management and monetization of Web APIs Previously with T-Mobile, Oliver Wyman, Viant, and others Blog: Twitter: @mtantow
  • 3. Agenda2 1. Evolution of Web Service Business Models 2. The Open Computing Value Chain 3. App Stores and the Rise of Social Apponomics
  • 4. How do I monetize my digital assets?33 Rupert Murdoch, Chairman & CEO, News Corp
  • 5. Over the last couple of years we had a simple answer: Build an API4 Products Products & Services & Services Open Website Web API However, building an API is easy, ? API but its distribution to the customer / 10,000 – users is not. 1 100,000 One distribution Reaching thousands channel (aka of users through an HTML website) API, being available “everywhere”
  • 6. Not having an API today is like not having a Web Site in the 90s5 “$7bn worth of items on eBay through APIs” Mark Carges (Ebay CTO) “The API which has easily 10 times more traffic than the website, has been really very important to us.” Biz Stone (co-founder, Twitter) “The adoption of Amazons Web services is currently driving more network activity than everything Amazon does through their traditional Web sites.” Jeff Bar (Amazon evangelist) / Dion Hinchcliffe (Journalist)5
  • 7. Evolution of Web Service Business Models6 Web Services become Open Platforms Applications turn Websites have into platforms become web services The API has overtaken The API IS the product, Websites with e.g. Twilio, Zemanta, website traffic add-on API Amazon WS, Strikeiron, The API is more Xignite API as an additional important than the access/interface to website, e.g. Twitter, their existing data, eBay e.g. Weatherbug, Technorati, Yelp
  • 8. Platforms leverage the network effect7 Products Products Products & Services & Services & Services Open Open Website Web Platforms API Platforms API 10,000 – 1 1,000,000s 100,000 One distribution Reaching thousands of Collaborating and channel (aka users through an API, sharing with millions HTML website) being available of users and “everywhere” customers Ubiquity
  • 9. Why should enterprises care about?8 Being indispensable in this new ecosystem Adapt new business models and exploit new opportunities Foster innovation Future model for software acquisition Increased customer engagement
  • 10. The Open Computing Value Chain9 Value Chain Sourcing Reach Open Supply Chain Open Distribution ChannelsDirect Content & functionality Website B2C provider / partner Direct API channels Open APIs Enterprise 2.0 B2B Front Back Products & PlatformsIndirect Services Enterprise Platforms / App Store Multi- APP APP APP B2B channel Consumer App Store Platforms / Mobile B2C APP APP APP Mashups Developer Community Platforms are creating the required network effect to succeed in the new Self-serve distributed ecosystem Social Apponomics
  • 11. Social Networking: Network effect driving towards consolidated experiences10 850+ social networking sites 55.6MM adults visit every month 46%+ ‘Online Adults’ visit 9.3% of all internet time Facebook winning with adults - 73% of SN adults have an account 1-Sep-10 Confidential and For Internal Use Only
  • 12. New Technology Infrastructure Rapid Spawned Innovation11 Management Life Cycle Apps Marketplaces Services Content Digital Trends Customer Company Processes Service Management Web 2.0 News Apps Search SOA Social Marketing Open APIs Networking Portals Productivity Bandwidth Payments Device Innovation Mobility &Devices proliferation Save Spend Deposit Invest Borrow Customer Use Cases
  • 13. Convergence of Cloud Functionality12 12 Management Life Cycle Rise of Social Apponomics Customer Company Processes Content Management Service Services Marketplaces Connections create Search value News Social OS Value from content clusters Marketing Productivity Ubiquity (and Mobility Payments Agnostic) New digital functionality Innovation Untethered Save Spend Deposit Invest Borrow Customer Use Cases
  • 14. The Big Trend is Towards Monetization13 Potential Domination 18-Month Future States by 2-3 Networks Concentration Handful of Key Players Industry Industry “Gold Rush” 3 years Today (like search …) ago Fragmented None Brand- Social Sites as E-commerce Building Commercial Hosted on Social Portals Sites Commercialization
  • 15. Apple’s AppStore has been the game changer14 Mobile Application Stores Evolution Earlier 2007 2008 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 “Emergence” Early Pioneers “Take off” The game changer “Gold Rush” “How can I get a place in the game?”
  • 16. Enterprise Platforms deliver competitive advantages15 Enterprise Platform Enabler Enterprise Platforms / App Stores Competitive Advantages
  • 17. Abundance of players with different agendas but competing for the same audiences16 App Store Ecosystem Developers 1 Software OS 2 Vertical vendors players Developers 6 Independent 3 Stores Users Mobile OEM’s Developers Attract Attract 5Developers ISVs/Carriers 4 Customers PC OEMs Developers
  • 18. Key success factors to attract both developers and customers17 App Stores Virtuous Circle Attract Developers Attract Customers Powerful Brand & Quality Technical Marketing Support Broad and Diverse Offerings High Reach and More More Exposure Developers Customers Quality Storefront Generous Business Model Easy Payments Engine
  • 19. Leveraging capabilities and strategic assets to determine the best strategic play18 EXAMPLE: MOBILE OPERATORS Strategic Plays for Mobile Operators Asset Strategic Levers Strategic Plays 1 2 3 Ability to Steer Steer Traffic towards Preferred Stores Traffic Local/ Operator- Specific Content Provide Own Applications 3rd Party Own App App Store App Store Store Consortium Control of Network Differentiate Service-level Data Packages Quality Payment Tools Provide Convenient Payment Tools Leveraging assets
  • 20. Key messages19 We’ve understood that APIs are important APIs are easy to build but distribution is key Enterprises need to engage in social networks Open platforms deliver the network effect which is critical to succeed B2C and B2B app stores are a preferred digital distribution model Enterprises need to leverage their existing assets and capabilities
  • 21. Questions? Thank you!Blog: @mtantow