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The API Economy: API Provider Perspective / European Identity Summit 2012


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European Identity Summit 2012 API Economy Presentation - trends and business models for the API Economy. (

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The API Economy: API Provider Perspective / European Identity Summit 2012

  1. 1. The API Economy:API Provider Perspective 3scale Steven Willmott EIC 2012/ Munich, Germany
  2. 2. One of the top API Infrastructure Providers Worldwide
  3. 3. 3
  4. 4. Out of the Box Control Internal and External Audiences Access Control, Rate Limits, Developer Portal, Monetization Plug-and-play Setup Get Traffic running immediately Scale quickly and efficiently 4
  5. 5. The Talk will cover 3 things How the API Economy Economy Examples Works
  6. 6. API ECONOMY 6
  7. 7. The Value of an API Revenue Ecosystem Mobile Apps Affiliate Sites + API Ancillary Services Internal Developers 7
  8. 8. Projected Growth: APIs Programmable Web API CAGR: 100% Directory Growth Project 250k APIs by 2016 Adding Approx 100 APIs a week 10% API Traffic growth / quarter(*)e.g. Think of this as 10% of the Alexa 2.5 Million top Websites 8 (* source – 3scale customer base average)
  9. 9. Massive Diversity Wide range of industries starting with APIs Companies large and small APIs driving success for early adopters B2C APIs B2B APIs Partner APIs Internal APIs … 9 (image source:
  10. 10. APIs will become the major way of doing business on the web 10
  11. 11. Enterprise Inside-Out 11
  12. 12. COMMON MODELS 12
  13. 13. Broad classes of business APIsFirst it’s worth thinking about the different functional roles of an API e.g The API is the product The API projects the product The API promotes the product The API powers and feeds the product
  14. 14. DiggingDeeper Direct revenue Utility / Pay per transaction Tiered Pricing Bands is the product Reach more places Provide more utility Enable Mobile projects the product Allow deeper integration Biz Development Lead Gen promotes the product User Acquisition Advertising Brand promotion powers and feeds Affiliate Programs the product Content Acquisition Partner tie-in Internal Innovation
  15. 15. The API Openess Cycle Internal Re-Use Inter Dept, Dashboards, Processes Raw Service Measure, Collate, AnalyzeCustomerRe-use CoreApps, Integration Assets Open to Anybody 1000 Flowers, Market Extension Partners and Distribution New Revenue, New Reach, Ecosystem
  16. 16. DRILL DOWN
  17. 17. The API IS the product Core value is tied up in the API OthersAPI is core value Direct Customer Usage API Encourage Resellers Amazon AWS Build Tech Knowledge Ecosystem Strategy Build Switching Costs e.g Enable new ServicesHuge Growth Encourage 3rd Party Tools API >> Websites $ If core service sees usage growth
  18. 18. The API Projects the product Extends availability of functionality to new placesMobile apps / 3rd OthersParties / Added UtilityAdded to a product Encourage partner ecosystem API Innovation opportunities Build Tech Knowledge Ecosystem Strategy Build Switching Costs e.g Enable new Services 50k + devs Encourage 3rd Party Tools Thousands of value increasing customer spend (primary) add apps $ If and numbers (secondary) for core product
  19. 19. The API Promotes the product Secondary function and indirect revenue impactSecondary (non core) serviceDesigned to drive OthersLeads / traffic Distribute “Teaser” Information API Brand Diffusion Promote to niches Ecosystem Strategy Cultivate Partners e.g Improve Partner Impact Widgets to Whole sites powered 10’s 1000’s of affiliates $ If increasing customer numbers (primary) and spend (secondary) on core product
  20. 20. The API Powers and Feeds the product Content acquisition via the APIContent, User information,Ratings, comments OthersEtc. into the service Reach all relevant producers API Facilitate Access Virtuous circle data in/out Ecosystem Strategy e.g 75% of traffic By API 250,000 Apps $ If when UGC brings appreciable value to the central product.
  21. 21. Hybrid ModelsMany APIs combine these models Support The API often starts by serving a different particular need and is repurposed over audiences time. Multiple revenue The API separates Data from Business streams Logic and presentation to make this possible.e.g • Started to power affiliates • Core P2P Infrastructure an API • Evolved to running auctions • “Skype as a platform” • 60% of listing now via API • Third parties embed Skype • Core part of revenue stream • End user uniform experience • Entrenched market power • Huge reach as a result
  22. 22. Entities (and Identities Involved)Managing Ecosystems, not closes silos Internal Customers • Developers • Apps • Business Units • Integrations Partners Wider World • Suppliers • Independents • ISVs • End Users • Contractors • Aggregators •Affiliates • Resellers
  23. 23. ZOOM OUT
  24. 24. Think of it as MVCModel – View - Controller
  26. 26. Think of your business as MVC• Are you… – Model: Data, Content, Core Service, Raw Material – View: Audience, Market Access, Visualisation, Presentation – Controller: Transformation, Recombination, Logic, Value Add – More than one?• What are the interfaces between these things? – Partners that could grow the whole? – Can you build an ecosystem around your strength? 26
  27. 27. APIs are the Glue which makes this happen
  28. 28. The API Economy is Upon Us! APIs are Key to Unlocking This Data Value Look Ahead in the Cycle Derive Value from Every Step
  29. 29. Thank you and QA 3scaleContact: info@3scale.netWeb: and @3scaleOffices: San Francisco, Barcelona, LondonSpeaker: @njyx or
  30. 30. Credits & More Resources• 3scale:• More on API Business Models and Development Models – which-business-model-9672038 – the-web• Images: – Flickr & iStockphoto
  31. 31. Resources: Commercial•• water-mark-as-the-web-evolves/215• mo.html•• content/uploads/api_media_companies.pdf• telco-20-conference-in-orlando-11-december-2009
  32. 32. Resources: Commercial••• business-and-apis••• application-developer-trends-with-developer-pulse• programmablewebcom