Using APIs to get more from your data

1. Liberating Data: The Age of
APIs
Prof. Bala Iyer
@BalaIyer
March 03, 2015

2. “we now uncover as much data in 48
hours – 1.8 zettabytes (that's
1,800,000,000,000,000,000,000 bytes)
– as humans gathered from "the dawn
of civilization to the year 2003."

3. The Data Deluge
• Google charges $2 to store 100GB
• Software is eating the world
• Sensory (IP add) layer has emerged
• Each technology wave has brought in more users – now Big Data
• Petabytes of data from computers, sensors, social networking data, &
scientific data
• Value is moving from physical assets to data, patents, copyrights &
trademarks
3

4. What are the sources of data?
• Transactional:
• ERP/CRM Transactional Systems
• Point-of-Sale/Scanner at Retail
• Customer Loyalty Programs
• Financial Transactions
• Social
• Click-Stream Data
• Social Media Data
• People
• Mobile
• Machine
• #IoT
• Personal analytics
• Open Data
• External Data Aggregators (e.g., AC Nielson)

5. Connected world -- Networks
 Deliver value to customer segments using a
portfolio of capabilities some of which are
achieved through links or dependencies.
 People
 Objects
 Systems
 Organizations

6. Sensemaking
“The most sought after executive will have a keen understanding of
how companies can put to use the oceans of information they now
collect”
• [HBR 2012]

7. The Fourth Factor of Production
• Represent reality better
• New value creation opportunities across value chains
• Data-mediated connections open new ways to leverage network
effects
[The Fourth Factor, Research Board, February 2015]

8. Dynamic Ecosystems
• Easily flowing data will enable ecosystem players to combine
expertise to create new service or new value around existing
offerings.
• [The Fourth Factor, Research Board, February 2015]

9. Ecosystem partners
Wired, Monetizing Data: Milking the New Cash Cow, February 2014.

11. Creating Awesome User Experience
• Don't make a better [X], make a better [user of X].
• Kathy Sierra
• Think about how customers experience the product or service

12. What do we mean by “Analytical”?
• Analytical Decision-making: the use of data, analysis,
models & systematic reasoning to make decisions
• Questions to answer:
• What decisions or business areas should analytics be
applied?
• What kind of data do we have now & do we need?
• What kinds of analysis do we do?
Source: “What it Means to Put Analytics to Work”, Davenport, Harris & Morrison, chapter from Analytics at
Work: Smarter Decisions, Better Results, 2010.

13. Decisions
Models
Decisions
Your
Data
Environment

14. What we mean by value?
14
Given your decision problem, how much
would you be willing to pay for information
that reduces uncertainty minus the cost of
that information.
Context Matters

15. All about decisions
supported by the data
15

16. Is it worth processing the data?
16
• If we can get a good market price to cover the costs of
processing, go ahead and drill the data.
• Data has to be prepared for decision making and that
costs money
• Depends on the value we get

17. Needs work
17
Data
Action
Cost to use Value returned
Many Activities
What investments can we make toward the management and
improvement of the data asset?
Cost of collection or purchase
Governance
Quality
Stewardship

18. Friction points for data flow
• Information silos
• Poor infrastructure
• Data integrity
• Meta data & data models
• Data quality
• Technical standards
• People, power and politics
18
Organizational goal  Data Liquidity

19. Data Quality
• Completeness
• Are all data sets and data items recorded?
• For each decision, do we have all of the data needed?
• Consistency
• Can we match the data set across data stores?
• Is it consistently represented?
• Accuracy
• Does the data reflect the data set?
• Timeliness
• Is the right data available at the time of making the decision?
• Provenance
• Where did the data come from, how was it transformed?
• Validity
• Does the data match the rules?
19

20. Information Drives Action
20
Data
Models/
Programs
Decision
Reduce uncertainty
StructuredDataSemi/UnstructuredData
THIRD PARTY DATA
ENTERPRISE Event DATA
• D&B
• Thomson Reuters
• Nielsen
• SAP & ERP
• Salesforce &
Eloqua
• Engineering
• Mfg./ * Production
• Distribution
• Legacy / Others
CONSUMER GENERATED
DATA
• Weblogs
• Omniture
• Capital IQ
• Social Media
Open DATA
Experiments
Models/
Programs
Models/
Programs
Models/
Programs

21. Uncertainty about what the user wants
Scale Economies Personalization

22. 22
My data is more valuable when mashed with your data
Use platforms and ecosystems

23. Open the Innovation Process
• Open innovation is a paradigm that assumes that firms can and
should use external ideas as well as internal ideas, and internal and
external paths to market, as the firms look to advance their
technology
[Henry Chesbrough]

24. With a little help from our friends
• Given market uncertainties, it is impossible for companies to build
every product that a customer needs.
• Diversity of needs forces companies to focus on a few features (long
tail) or to source capabilities
• They have to depend on partners (complementors)

25. Creating Value From Your Data
Your Data
Other
Data
Analytics
Other
Capabilities
Product or
Service
Enhancement
New Data
Centric
Product or
Service
Join a
Platform
Current
Business
Model
New
Business
Model
New
Business
Model
Partners
© Nalin Kulatilaka and Bala Iyer
C
U
S
T
O
M
E
R
S

26. New Competency
• Customer intimacy through fine feedback loops and analytics is now a
new core competency

27. Think Platforms, not Products
Robust Platform Ecosystems Beat Superior Products

28. What is an API?
28
Tech definition:
An Application Programming Interface is a structured way for two
computer applications to talk to each other over a network
(predominantly the Internet) using a common language that they
both understand.
Business definition: Capabilities exposed over the internet for partners to
use. A way to get your data to partners and apps.
Essentially a contract.
Amundsen’s Dogs, Information Halos, and APIs: The epic story of your API strategy.
Sam Ramjee Apigee.

29. Source:
Journey to a Brave New World
Distributor

30. Consider this:
50%+ annual rev
of $3b through
APIs
More bandwidth through
APIs than all the websites
Entirely API based
product and ecosystem
30% of primetime internet
traffic through streaming
service managed by APIs
API drives all forms of
distribution - website,
apps, partners
Source: Under the Iceberg: Using APIs to Transform your Business. Greg
Brail, Dan Jacobson, Dan Woods, and Scott Regan .
60% of eBay listings are
added using APIs $7b items
90% of $2b rev comes
through API

31. Why APIs?
• Creates more options
• Allows for third party experimentation
• Provides a control structure
• Pathway to a platform strategy
• Way to collaborate with ecosystem and partners
31

32. Innovation path
• Open to any ecosystem
• Restricted to chosen ecosystem
Internal
partners Open API
For all
Close
external
partners
API Product Management – Driving Success through the Value Chain, Michael
Hart, Jen Mazzon, Sam Ramji

33. Liberating Value
Internal
Services
Decision
A
P
I
Partner
Services
Decision
Data
StructuredData
THIRD PARTY DATA
ENTERPRISE EVENT DATA
• D&B
• Thomson Reuters
• Nielsen
• SAP & ERP
• Salesforce &
Eloqua
• Engineering
• Mfg./ * Production
• Distribution
• Legacy / Others
CONSUMER GENERATED
DATA
• Weblogs
• Omniture
• Capital IQ
• Social Media
OPEN DATA
EXPERIMENTS

34. Emergence of a new role -- Developer

35. IT/API
Developers
Apps
Core
Business
Customers
Amundsen’s Dogs, Information Halos, and APIs: The epic story of your API strategy.
Sam Ramjee Apigee.

36. Developers now sit between you and your customers
and innovate for end users
They are like the retail store in the value chain
Developers
Amundsen’s Dogs, Information Halos, and APIs: The epic story of your API strategy.
Sam Ramjee Apigee.

37. • Developer Community
• Community manager
• Evangelist
• Hackathons
• Documentation
• Sandbox and trial cases
• Joining the right platforms
Getting the word out

38. Surging App Economy
• Total revenue in 2017 will reach $70 billion. Free apps will account for
91 percent of total downloads. 102B App Store Downloads

39. Revenue Models

40. Traditional Value Chain
Core Info Assets
Innovation
Operations
Outbound
Customers
Marketing
Inbound

41. API-based Value Chain
Operations
Outbound
Customers
Marketing
Inbound
APIs
Developers
Apps
CoreInfo
Assets
Value
Customers

42. Software Ecosystem
• .. “a set of actors functioning as a unit and interacting with a shared
market for software and services, together with the relationships
among them. These relationships are frequently underpinned by a
common technological platform or market and operate through the
exchange of information, resources and artifacts.”
Ivo M. van den Berk, Slinger Jansen, Lútzen Luinenburg. Software Ecosystems: A Software
Ecosystem Strategy Assessment Model

43. Classifications by Oneforty.com
Many Applications use Twitter APIs to thrive on top of the Twitter
Platform
Visualization by Sonoa
Amundsen’s Dogs, Information Halos, and APIs: The epic story of your API strategy.
Sam Ramjee Apigee.

44. Innovation Ecosystems Dynamic Ecosystems
Ecosystem Alliances Ecosystem Innovations
Complementors
NewMarkets
IdentifiedUnidentified
Identified Unidentified
Ecosystem Recognition Matrix
©Bala Iyer and Mohan Subramaniam

45. Make it easy for third-parties to build on top of your products – Create an
Ecosystem
What about control of the ecosystem?
Uncertainty of user needs resolved through
experimentation
What ecosystems are you really in?

46. API Networks
Small Worlds
These topologies matter in determining winners and losers. Opening up APIs
Creates these networks that are different from your current dependencies.

47. The future is already here — it's just not very evenly distributed
[William Gibson]

48. Examples
• IBM Watson
• Walgreens
• Ford
• D&B

49. App Store

50. Connected Car Ecosystem

51. Mobile Payment Ecosystem

52. Analytics Ecosystem (840 nodes)
Component
Platform
Platform with high brokerage

53. High brokerage nodes
Cloudera Pentaho
IBM Fractal
MuSigma Rapidminer
SAS Cognizant
MTECH Accenture
Tableau SPSS
Infosys AbsolutData
Capgemini Genpact
KXEN Oracle
Wipro Opera
TCS HCL
LatentView Guavus

54. State of Art: Serving current need
54
Finding Value in the Information Explosion, Sloan Management Review : Summer 2012
• Gartner Survey of 410 senior leaders
• About 25% quantify the value of their data precisely
• 33% measure the benefits that each type of data generates,
• nearly 25% say their assets are well cataloged and defined.
• In reality, less than 5% calculate the value of their data,
measure its benefits, or properly inventory their
information
• IT within organization is focused on storing, protecting
and accessing massive amounts of data
• Few CIOs and other IT executives were succeeding at
generating significant business value from their data
• Little spent on the business opportunities possible with
such data
CIOs Consider Putting a Price Tag on Data, CIO Magazine link

55. Conclusions
• Treat data as an asset
• Create APIs to data sources
• Develop API management capability
• Allow for experimentation
• Learn to thrive in dynamic ecosytems
• A firm without API is like the internet without the WWW