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Punctuated Equilibrium, Celestial Navigation, and APIs

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In evolutionary theory, punctuated equilibrium refers to a period of significant environmental stress resulting in rapid, dramatic changes among species. It is a powerful model for understanding the changes in technology, business models and data over the last few decades - changes that have given rise to the age of APIs. In this talk, we'll look at three key themes in the API economy:
•The Evolution of Business Models: From 1st Party to Partner to Platform
•The Evolution of Architecture: From Mainframe to Mobile
•The Evolution of Data: From Silos to Social

Published in: Business, Technology, Education
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Punctuated Equilibrium, Celestial Navigation, and APIs

  1. Punctuated Equilibrium,Celestial Navigation,and APIs<br />Competing through dynamic adaptation<br />Sam Ramji, Apigee @sramji<br />Dan Jacobson, Netflix @daniel_jacobson<br />Michael Hart, Netflix @michaelhart<br />
  2. PUNCTUATED<br />EQUILIBRIUM<br />
  3. Darwin formulated his theory of evolution about 150 years ago<br />
  4. Based on observations he made in the Galapagos Islands 15 years earlier<br />
  5. A wild diversity of creatures existed in a new environment<br />
  6. Starting from an ancestor which looked like this<br />
  7. Geospiza Fulginosa<br />
  8. Finches evolved that looked like this<br />
  9. Geospiza Fortis<br />
  10. and this<br />
  11. Camarhynchus Pallidus<br />
  12. and this<br />
  13. Camarhynchus Pauper<br />
  14. and this<br />
  15. Geospiza Conirostris<br />
  16. and this<br />
  17. Certhidea Olivacea<br />
  18. and this<br />
  19. Geospiza Scandens<br />
  20. For many years the belief was that this change happened slowly and gradually.<br />
  21. In 1972, Stephen Jay Gould and Niles Eldredge proposed a new idea<br />
  22. that evolution is not slow and gradual<br />
  23. but sudden and violent.<br />
  24. Applying this view to the observations of finches<br />
  25. G. Scandens<br />C. Pallidus<br />G. Magnirostris<br />G. <br />Conirostris<br />C. Heliobates<br />G. Fortis<br />G. Fulginosa<br />C. Psittacula<br />C. Pauper<br />C. Olivacea<br />C. Parvulus<br />Certhidea<br />Camarhynchus<br />Geospiza<br />
  26. “Thus, from the war of nature, from famine and death, the most exalted object of which we are capable of conceiving, namely the production of higher animals directly follows.”<br />Charles Darwin<br />On Origin of Species<br />
  27. So while it may look slow and gradual in hindsight<br />
  28. Evolution is experienced in punctuated bursts.<br />
  29. If you’re living in a punctuated burst of evolution<br />it feels like a revolution<br />
  30. CELESTIAL<br />NAVIGATION<br />
  31. Exploration<br />
  32. like evolutionary change<br />
  33. only looks smooth in hindsight<br />
  34. Living through it is usually chaotic<br />
  35. Karen James<br />The Beagle Project Blog<br />
  36. To navigate, you need a map and instruments<br />
  37. Maps exist for transferring knowledge<br />
  38. and they too have evolved over time.<br />
  39. They started as oral traditionand were written down in a form called a periplus<br />
  40. Periplus of Hanno<br />Courtesy of Heidelberg University<br />
  41. Periplus of Hanno<br />Courtesy of Cornell University<br />
  42. Far less efficient knowledge transfer than <br />a modern map of the same journey<br />
  43. Map of Hanno’s Journey<br />Courtesy of Bourrichon/Wikipedia<br />
  44. Exploration was dramatically held back for want of a map<br />
  45. In the two thousand years between Hanno’s journey on a Phoenician trireme<br />
  46. And the Mediterranean caravel of the 15th century<br />
  47. Maps had only evolved to be graphical descriptions of coastlines<br />
  48. That was a map published a few years before<br />Columbus crossed the Atlantic to find India<br />
  49. After his crossing, his expedition shared their knowledge<br />in a new map<br />
  50. Still far from perfectbut much improved.<br />
  51. The biggest challenge in this kind of exploration<br />was determining their location on the Earth<br />
  52. Instruments for measuring latitude had beenused and improved for centuries<br />
  53. Longitude was the hard problem.<br />
  54. You needed to know not just the angle of the sun and stars<br />
  55. you also needed to know the precise time.<br />
  56. Regardless of your sailing technology<br />without the proper measurement<br />you were lost<br />
  57. We are not promising a perfect map of the new world<br />
  58. But it should be more like this<br />
  59. than this<br />
  60. Periplus of Hanno<br />Courtesy of Heidelberg University<br />
  61. and we will show you what we know how to measure.<br />
  62. APIS<br />
  63. There are more niches today than we’ve seen before, so we need to borrow from nature<br />
  64. If we start with an API we can explore all the niches around our business<br />
  65. Visualization by Apigee<br />
  66. The leaders of today’s Internet <br />
  67. clearly understand this mechanism.<br />
  68. They understand that the distribution model for value has changed in the Internet era.<br />
  69. Packaged Goods<br />Consumer<br />Retail Store<br />Producer<br />Internet Services<br />App<br />Developer<br />Consumer<br />Provider<br />
  70. Developers took their APIs and explored the niches for them<br />
  71. The providers and the developers both benefited from this adaptation<br />
  72. Suddenly this seems obvious to everyone.<br />
  73. Data from Programmable Web<br />
  74. And developers are racing to pack the niches.<br />
  75. Data from Wikipedia<br />
  76. This is a sudden, material shift in competition.<br />
  77. It only looks gradual if you’re losing.<br />
  78. BUSINESS MODELS<br />From 1st Party to Partner to Platform<br />
  79. We’ve seen punctuated equilibrium in business models over the last hundred years<br />
  80. App Developer<br />Device App<br />Big Box Retailer<br />Mobile App<br />National Chain<br />Web Retail<br />Department Store<br />Web Catalog<br />Specialty Store<br />Indirect Sales<br />Direct Sales<br />
  81. What’s the environmental stress driving the current rapid change?<br />
  82. Hardt’s Theorem: The Internet Power Law<br />The first wave of the Internet demonstrated the economic impact of web-based business models.<br />99:1<br />95:5<br />The API-driven Internet is demonstrating the next concentration of power and is reflecting a “99:1” distribution (examples: Twitter, Facebook) due to the high switching costs and effective lock-in through software. <br />The HTML-driven Internet showed new business models that focused revenue in the 3rd standard deviation (examples: Amazon, EBay). Reality reflected a “95:5” rule where 5% of companies dominated the transactions and profits.<br />80:20<br />Previous eras of business showed a normal distribution for revenue, with most firms getting most of the revenue. In the later half of the 20th century, business model innovations focused revenue in the 2nd standard deviation above the mean. The “80:20” rule became conventional wisdom.<br />The next wave of the Internet is demonstrating the economic impact of API-based business models.<br />
  83. But you need to tackle it in a way that fits your business<br />
  84. 1st Party<br />Open<br />Open<br />Open<br />Platform<br />Partner<br />
  85. These are complementary and distinct.<br />Open is different for each one.<br />
  86. 1st Party Apps<br />Partner Apps<br />Platform Ecosystem<br />
  87. 1st party<br />1st party is about offering direct access to your core business via apps that you make or contract out<br />
  88. 1st party<br />Here open means all the business is accessible to internal developers and contract specialists<br />
  89. partner<br />Partner is about enabling directed development of apps that extend your business model towards your business partners<br />
  90. partner<br />Here open means existing partners have access to your business via APIs and can innovate asynchronously<br />
  91. platform<br />Platform is about enabling unknown developers to build brand new apps and businesses that will surprise and inform you<br />
  92. platform<br />Here open means enabling business models and allowing developers to support each other at massive scale<br />
  93. open<br />Open is attractive<br />
  94. open<br />Open is Biz Dev 2.0<br />
  95. 1st Party<br />Open<br />Open<br />Open<br />Platform<br />Partner<br />
  96. open<br />Open lets you navigate across the possible business models when your first model doesn’t work as planned<br />
  97. 1st Party<br />Open<br />Open<br />Open<br />Platform<br />Partner<br />
  98. To get your API strategy properly grounded<br />
  99. “<br />John Musser<br />Programmable Web<br />
  100. But how?<br />
  101. Let’s break it down<br />
  102. Establish Target Segments<br />Engage Developer Channel<br />Set Industry Goal<br />
  103. target segments<br />An API should extend your core business<br />into a new part of the market<br />
  104. target segments<br />Your core business already has <br />key performance indicators<br />
  105. target segments<br />So apply your KPIs to the new market segment you’re targeting with your APIs<br />
  106. target segments<br />What is the market impact you need to create in order to succeed as a business?<br />
  107. target segments<br />What does the targetsegment need that it is not getting from you today?<br />
  108. target segments<br />The answer will be the foundation of your API strategy.<br />
  109. developer channel<br />In most cases the channel for your API will be developers, but what do they need?<br />
  110. developer channel<br />A profit motive.<br />
  111. developer channel<br />Here are the leading profit models for developers today<br />
  112. developer channel<br />In-app purchases<br />Affiliate royalty<br />Your advertising spend<br />Market awareness of their offering<br />App sales<br />
  113. industry goal<br />If you don’t know where you’re going, you definitely won’t get there<br />
  114. industry goal<br />Partnerships and platform businesses are very different things.<br />
  115. industry goal<br />Partnerships are formed to serve a known set of entities<br />
  116. industry goal<br />A partner API should be traceable to each partner’s relationship<br />
  117. industry goal<br />And support end-to-end business processes<br />
  118. industry goal<br />A platform exists to create massive and unpredictable opportunities<br />
  119. industry goal<br />All your technology, support, and community decisions will be about surviving the scale of adoption<br />
  120. That’s the strategy dimension.<br />
  121. The execution dimension is what you already know.<br />
  122. Planning.<br />Management.<br />Organization.<br />
  123. Putting all this in context gives us a map for our API strategy <br />
  124. The instruments will be your KPIs and your core API metrics: performance and adoption<br />
  125. ARCHITECTURE<br />From Mainframe to Mobile<br />
  126. Connected <br />Devices<br />Smartphone<br />Web App<br />N-tier<br />Personal<br />Computer<br />DCOM<br />CORBA<br />Website<br />Minicomputer<br />Client/Server<br />Mainframe<br />Integrated<br />Distributed<br />Computing<br />
  127. “<br />The Web is Dead. Long Live the Internet.<br />Chris Anderson<br />Wired Magazine<br />
  128. The Web is Dead. Long Live APIs!<br />
  129. Twitter traffic distribution shows what he means<br />
  130. Twitter Traffic in 2010<br />
  131. Netflix traffic distribution is nearly the same.<br />
  132. The majority of Netflix traffic comes from <br />API-drivenconnected devices.<br />
  133. Like Columbus, Netflix started with a map of the coastline<br />
  134. Build an open API as a platform<br />and let a thousand flowers bloom<br />
  135. But they had left the coastline far behind<br />
  136. And the instruments indicated that there were fewer flowers than expected<br />
  137. Netflix API Requests by Segment<br />
  138. But partners started building apps for connected devices and the business took off<br />
  139. Wii<br />iPad<br />PS3<br />iPhone<br />Apple TV<br />LG TVs<br />Samsung TVs<br />Roku<br />XBox<br />
  140. Architecture should <br />reflect the business model<br />
  141. So Netflix has drawn the following map<br />
  142. Wii<br />Roku<br />PS3<br />iPhone<br />iPad<br />Google TV<br />Apple TV<br />XBox<br />LG TVs<br />Samsung TVs<br />
  143. Instruments show that API traffic has grown tremendously in a short time<br />
  144. Growth of Netflix API<br />
  145. 20,000,000,000 API requests per month.<br />Is that a cause for celebration?<br />Or for concern?<br />
  146. When you’re navigating uncharted waters,<br />speed is not your friend.<br />Perhaps it’s time to slow down and avoid risking unknown reefs.<br />
  147. Navigating this growth challenge for Netflix means that the next API revision will focus on reducing overall traffic.<br />
  148. Part of this redesign is reviewing conventions<br />
  149. Punctuated Equilibrium: REST<br />Data sourced from<br />ProgrammableWeb<br />
  150. REST seems obvious but assess what makes sense for your business.<br />
  151. Tiered architecture helps you navigate different problems with agility<br />
  152. Controller<br />Model<br />View<br />iPhone Wrapper<br />Recommendations<br />R12n Service<br />Xbox Wrapper<br />UNIFIED LIST/TITLE API<br />Wii Wrapper<br />User Info<br />User Service<br />PS3 Wrapper<br />Similar Movies<br />Similar Movie Service<br />SHARED API INTERFACES<br />Roku Wrapper<br />Movie Metadata<br />DataNormalization<br />&<br />Resiliency<br />iPad Wrapper<br />USER API<br />Viewing History<br />Apple TV Wrapper<br />Ratings<br />PC / Mac Wrapper<br />TiVo Wrapper<br />API Repository <br />Layer<br />Wrapper<br /> Layer<br />Web Service <br />Layer<br />Shared<br /> Layer<br />Source Data <br />Layer<br />App Layer<br />API Layer<br />
  153. Stable<br />Flexible<br />Agile<br />iPhone Wrapper<br />Recommendations<br />R12n Service<br />Xbox Wrapper<br />UNIFIED LIST/TITLE API<br />Wii Wrapper<br />User Info<br />User Service<br />PS3 Wrapper<br />Similar Movies<br />Similar Movie Service<br />SHARED API INTERFACES<br />Roku Wrapper<br />Movie Metadata<br />DataNormalization<br />&<br />Resiliency<br />iPad Wrapper<br />USER API<br />Viewing History<br />Apple TV Wrapper<br />Ratings<br />PC / Mac Wrapper<br />TiVo Wrapper<br />API Repository <br />Layer<br />Wrapper<br /> Layer<br />Web Service <br />Layer<br />Shared<br /> Layer<br />Source Data <br />Layer<br />App Layer<br />API Layer<br />
  154. Server architecture should support both crests and troughs of the waves of demand<br />
  155. Instance Architecture Based on Specialization<br />List Creation<br />Dependency Service<br />ELASTIC INSTANCE LAYER<br />API METADATA CACHING LAYER<br />Meta<br />Data<br />Dependency Service<br />METADATA SERVICE<br />
  156. Instance Architecture Based on Specialization<br />Handles Request/Response<br />List Creation<br />Dependency Service<br />ELASTIC INSTANCE LAYER<br />Caches Dependency Data<br />API METADATA CACHING LAYER<br />Meta<br />Data<br />Dependency Service<br />Populates and Manages Cache<br />METADATA SERVICE<br />
  157. Map out your usage patterns and cache your data accordingly<br />
  158. Vertical Caching<br />
  159. Vertical Caching: Netflix Full Movie Data<br />
  160. Horizontal Caching<br />
  161. Horizontal Caching: Netflix Basic Data<br />
  162. Combining horizontal and vertical caching may be the best approach when building for multiple geographies<br />
  163. Two-Dimensional Caching<br />
  164. Design for where you’re going<br />
  165. Not for where you are<br />
  166. You may be starting here<br />
  167. Growth of Netflix API<br />
  168. But you must design for here<br />
  169. Growth of Netflix API<br />
  170. You don’t need to implementfor massive scale<br />
  171. But you must design for it or you will follow your successful ocean crossing with a massive shipwreck.<br />
  172. Navigation also means constantly adjusting your course to ensure you arrive at your final goal<br />
  173. Sometimes adjusting course on an API means you must change your version<br />
  174. Versioning means supporting multiple applications, all of which basically do the same thing<br />
  175. Versioning<br />1.0<br />1.5<br />2.0<br />3.0?<br />4.0?<br />5.0?<br />Today<br />
  176. If possible, go versionless<br />
  177. Version-less API<br />1.0<br />1.5<br />2.0<br />Here there be dragons<br />versionless<br />Today<br />
  178. Rules for going versionless <br />in your production APIs<br />
  179. Extend your API by extending data types<br />Addition is not version-worthy<br />Better to be incomplete than inaccurate<br />Withhold implementation if you are unsure<br />
  180. With APIs emerging, we need better tools help us navigate<br />
  181. The service level agreement is your sextant<br />
  182. Set reasonable service level agreements<br />
  183. What is reasonable will vary by API and use case<br />but you must communicate them to your users.<br />
  184. Measure average latencies, <br />error rates and types,<br />and respond when SLAs are broken<br />
  185. Having visibility into performance means you can tack immediatelyrather than after your users threaten to mutiny.<br />
  186. Longer-term navigation requires higher-level metrics<br />
  187. Request-based metrics such as what endpoints were called and what parameters were passed can show you what aspects of your API are popular.<br />Response-based metrics such as what was delivered, how quickly, and whether the response was valid can show you what aspects of your API need work.<br />
  188. System trace metrics that track what underlying systems were called and how they responded can show you where you need to evolve your internal architecture.<br />Business performance metrics such as how much revenue or how much customer engagement is occurring through the API show you how close you are to delivering on the business plan.<br />
  189. DATA<br />From Silos to Social<br />
  190. Domain-specific<br />Data APIs<br />Private Cloud DBs<br />Caching DBs<br />Data API<br />Data<br />Warehousing<br />Mainframe<br />RDBMS<br />Flat file<br />Shared<br />Silos<br />Data<br />
  191. Punctuated equilibrium in data sharing<br />
  192. App<br />Org<br />Cross-org<br />Cross-business<br />Mainframe<br />Databases<br />Middleware<br />APIs<br />
  193. So we are evolving to cross-business sharing<br />
  194. There are a few challengesin making this journey<br />
  195. Sharing your data via an API entails a different set of considerations than APIs which expose your services<br />
  196. loss of control<br />only recourse is legal<br />enforcement is expensive<br />
  197. That said, it may be time to get over<br />your control issues<br />
  198. Be honest about the value you could get from sharing your data outside your corporation<br />
  199. instead of just the costs and risks of sharing it.<br />
  200. In opening up its movie data warehouse<br />
  201. Netflix found that the cost was the same as any API, <br />the risks could be managed through rate limits and access control,<br />but that now others could build great movie discovery experiences that led to increased Netflix viewing hours.<br />
  202. Sharing data as a service means making a few course corrections on your API<br />
  203. enable larger downloads for fewer queries<br />more liberal retention policies means less API traffic, higher performance, and less cost<br />push incremental updates<br />limited access to richer queries<br />
  204. Looking forward, how are we going to work through this wave of shared data?<br />
  205. Two different dimensions are apparent<br />
  206. First, no one wants all of your data, <br />just some of it.<br />Just the right parts of it for their particular need.<br />
  207. Where have we seen this before?<br />
  208. App<br />Org<br />Cross-org<br />Cross-business<br />Mainframe<br />Databases<br />Middleware<br />APIs<br />
  209. Last time the right solution was a <br />query language<br />Perhaps it’s the right solution now<br />
  210. Instead of a static REST call, we could pose a query like “what are the highest rated movies from the 1980s?”<br />http://odata.netflix.com/Catalog/Titles?$filter=ReleaseYear le 1989and ReleaseYearge1980and AverageRatinggt4<br />&$expand=Awards<br />
  211. Caveat structor does apply<br />This is new ground and we haven’t seen anyone do this at massive scale<br />
  212. Second, people want just the right parts of your data for their particular need<br />But they need the right parts of other people’s data to have a complete context<br />
  213. Where have we seen this before?<br />
  214. App<br />Org<br />Cross-org<br />Cross-business<br />Mainframe<br />Databases<br />Middleware<br />APIs<br />
  215. Last time the right solution was middleware for distributed queries<br />Perhaps it’s the right solution now<br />
  216. But the rules have changed a bit since the data is laying all over the Internet<br />
  217. [{<br /> "id": null,<br /> "name": null,<br /> "type": "/dining/restaurant",<br /> "/business/business_location/address": [{<br /> "street_address": [],<br /> "citytown": {<br /> "id": "/en/toronto"<br /> }<br /> }],<br /> "cuisine": [{<br /> "/dining/cuisine/region_of_origin": [{<br /> "!/film/film/featured_film_locations": [{<br /> "id": "/en/the_italian_job"<br /> }]<br /> }]<br />Instead of a single domain query, we could ask for a list of “Toronto restaurants with cuisine from a filming location of ‘The Italian Job’”<br />
  218. Caveat structor still applies.<br />This is very new terrain indeed.<br />
  219. The bigger question than what should you be sharing out<br />Is what should you be sharing in<br />
  220. What data APIs should your business be using?<br />
  221. What could you offer your customers <br />if you knew which of them were friends with each other?<br />
  222. What does that logo mean to you today?<br />Perhaps it’s time to think differently.<br />Facebook is a massive data API <br />that lets you correlate your customers <br />with their true context<br />
  223. You could move beyond a flat-earth view where all your customers are their own islands of data<br />And each of them were connected in ways that makes your business more valuable to them<br />
  224. What could you offer your customers <br />if you knew where they like to go?<br />
  225. The more of your customer’s context that you can understand<br />The more time you can save them<br />And that makes your business more valuable to them<br />
  226. The good news is that there are already data APIs to get this context<br />Now you need to focus on sharing in<br />
  227. InCLOSING<br />
  228. We are going through a period of rapid change in business models, architecture, and data<br />
  229. Navigating based strictly on the stories of others<br />
  230. Periplus of Hanno<br />Courtesy of Heidelberg University<br />
  231. Will not give you the clear map that you need<br />
  232. Develop instruments around your API<br />that help you understand where you’re going<br />
  233. so that you can correct your course <br />and beat your competition in the race for the future.<br />
  234. THANK YOU<br />Questions and ideas to:<br />@michaelhart<br />@daniel_jacobson<br />@sramji<br />

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