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APIs for Biz Dev 2.0
Which Business Model?
      Guillaume Balas - CMO @3scale
    guillaume@3scale.net - @guillaumebalas
Introduction

THE RISE OF THE APIS


               The Plug & Play Cloud API Management   2
                      Platform & Infrastructure
APIs are growing & reshaping the new
Web
This is not a trend, this is a fact

                      13B / Day (May „11)

                      5B / Day (April „10)

                      5B / Day (Oct „09)

                      3B / Day (March „09)

                      1.1B / Day (April „11)

                      1B / Day (Q1 „12)

                      50% Traffic (March „08)


  Success for these businesses is
                                                                         8,000 APIs
   heavily relying on their API(s)
                                  The Plug & Play Cloud API Management                3
                                         Platform & Infrastructure
8,000 APIs: that’s just the tip of the
Iceberg


Private for Partners                  At 3scale we actually
                                      believes that there is
                                    5x to 10x this number out
Private (for Now)                              there.
                                      With an approximated
                                    100% annual growth, that
                                      would mean around 1
Truly Private                          Million APIs by 2017



               The Plug & Play Cloud API Management         4
                      Platform & Infrastructure
APIs are everywhere
Examples


Media & Content                             SaaS Integration




Social & e-Commerce                         Others




  Interest is broad and deep. APIs are currently reshaping the web, and
           disrupting some industries: telecoms, payments, etc!
                        The Plug & Play Cloud API Management              5
                               Platform & Infrastructure
What is an API ?

API 101


                   The Plug & Play Cloud API Management   6
                          Platform & Infrastructure
Application Programming Interface
Tech. Definition



                     “A particular set of rules and specifications that a software
                     program can follow to access and make use of the services
            and resources provided by another particular software
                                             program that implements that API.

                     It serves as an interface between different software
                                  programs and facilitates their interaction, similar
                                                                      to the way the
                        user interface facilitates interaction between humans and
                                                                        computers.”




                            The Plug & Play Cloud API Management                    7
                                   Platform & Infrastructure
Application Programming Interface
A Business Definition




“  We are nearing the time when
                                                                      pps
    opening our supply chains across
    the Web isn‟t just a good idea, it
    will be essential for competitive
    survival.
                        Dion Hinchcliffe, ZDNet
                                                             A
                                                               artners
“  APIs provide a scalable way to do
    business development and create
                                                             P
                                                               ncome
                                                             I
    partnerships. “BizDev 2.0. I call
    it”.
                          Caterina Fake, Flickr
                                                                       Adam DuVander,

                               The Plug & Play Cloud API Management                     8
                                      Platform & Infrastructure
API

WHY IS IT IMPORTANT?


        The Plug & Play Cloud API Management   9
               Platform & Infrastructure
Web sites are local
There was 645 Million Web sites as of March 2012




                                                                                   Disadvantages:
                                                                                    Limited reach
                                                                                    Lost business opportunities
                                                                                    Very Limited brand awareness
                                                                                    Significant SEO and SEM costs
                                                                                    Web scraping risks




Source: Dion Hinchcliffe, http://blogs.zdnet.con/Hinchcliffe




                                                               The Plug & Play Cloud API Management              10
                                                                      Platform & Infrastructure
APIs help you grow your business
APIs are Biz Dev 2.0 – The first paradigm shift




                                                                                   Advantages:
                                                                                      APIs unlock new distribution
                                                                                   channels & enable the expansion
                                                                                   of your business beyond the limits
                                                                                            of your web site.

                                                                                               API Deployment Focus


                                                                                        38%                     Multi-Channel
                                                                                                          51%
                                                                                                                Mobile Apps
                                                                                              11%               Non-Mobile


Source: Dion Hinchcliffe, http://blogs.zdnet.con/Hinchcliffe




                                                               The Plug & Play Cloud API Management                          11
                                                                      Platform & Infrastructure
APIs Deliver Raw Data, Content and
Services
                          Allowing you to…

  Create New
                                                  Build an     Power Mobile
  Distribution       Partner Up
                                                 Ecosystem        Apps
   Channels


 Serve any type                                Rationalize &
                                                               Decrease your
       of                                     Control access
                    Protect IPR                                cost of serving
device, software                                  to your
                                                               your customer
  , anywhere                                    resources


 “Externalize”
                                                 Create New
  your R&D.        Lower Barriers                               Reach More
                                                  Business
    Foster          to Integration                              Customers
                                                   Models
  Innovation


                        The Plug & Play Cloud API Management                  12
                               Platform & Infrastructure
APIs Deliver Raw Data, Content and
Services
                     Generating



          Strategic Advantage

          Business Advantage

         New Revenue Streams

             The Plug & Play Cloud API Management   13
                    Platform & Infrastructure
An API?

SO WHAT NOW?


          The Plug & Play Cloud API Management   14
                 Platform & Infrastructure
Take away #1


     Don‟t put lipstick on a
                 pig.
      It will still be a pig…



               The Plug & Play Cloud API Management   15
                      Platform & Infrastructure
Take Away #2


  Don‟t just build it and think
       they will come…

    You might wait very
         long…

               The Plug & Play Cloud API Management   16
                      Platform & Infrastructure
Take Away #3




It is the organization‟s core business
           which is valuable.
The API is “just” the channel into this.

               The Plug & Play Cloud API Management   17
                      Platform & Infrastructure
Take Away #4


    What API for my
    Business Model?



               The Plug & Play Cloud API Management   18
                      Platform & Infrastructure
So what now?

API STRATEGY 101


               The Plug & Play Cloud API Management   19
                      Platform & Infrastructure
API business strategy
Get the most from your API


APIs enable cloud scale MVC,
                                                 ①      Identify your core asset
                                                 ②      Choose the complementary asset
                                                        which will deliver most value
                                                 ③      Define the strategy to capture the
                                                        value most effectively


                                                 Examples of API Business Strategy

allowing you to focus on your core                          Presentation Logic   Data   Mission
                                                                                        Revolutionize the way
asset.                                                         ✓                        people watch movies


                                                                                        Simplify the world of

                                                                         ✓              telecom by providing
                                                                                        simple, powerful, pay-as-
                                                                                        you-go IaaS

                                                                                        Increase the world's
                                                                                 ✓      access to data, especially
                                                                                        free and open data




                             The Plug & Play Cloud API Management                                               20
                                    Platform & Infrastructure
API typology
Concepts
                                  Typical Evolution of an API
                                                 1


Private APIs                                         Rationales
They are used internally to facilitate the               Rationalize infrastructure
integration of different                                 Reduce costs
applications/systems used by your                        Increase flexibility
company.
                                                         Improve internal operations

Partners APIs
Enable the integration of software between
your organization and your business                          Value-added service
partners.                                                    Up sell
                                                             Must have for your partners
Public APIs
Publicly expose information and
functionality of one or various of your                      Foster innovation
systems/applications to 3rd that don‟t                       Increase reach, traffic
necessarily have a business relationship                     New revenue stream
with your company
                                                     1 Not   necessarilly always the case (e.g musiXmatch, Viadeo, Skype)
                                The Plug & Play Cloud API Management                                                 21
                                       Platform & Infrastructure
API openness cycle
   Concept                                                      Internal Re-Use
                                                                              Inter
                                                                  Depts, Dashboards, Processes




Raw Service                                                                                        Customer
Mesure, Collect, Analyze
                                                                                                    Re-Use
                                                                                                    Apps, Integration
                                                    CORE
                                                    ASSET
                                                      S

                 Open to                                                                 Partners &
                 Anybody                                                                 Distribution
           1000 Flowers, Market Extension                                          New Revenue, New Reach, Ecosystem

                                            The Plug & Play Cloud API Management                                        22
                                                   Platform & Infrastructure
API business model
Another paradigm shift




                                                                Source: John Musser, ProgrammableWeb.com




                         The Plug & Play Cloud API Management                                        23
                                Platform & Infrastructure
API delivery
How?



                                                 Developers
  Your core
   assets                                                    Customers

                                                                 Partners
        Your
        API
                                                                  Affiliates

                                                          Mobile Users

                                                      Internal
                                                      Projects



               The Plug & Play Cloud API Management                         24
                      Platform & Infrastructure
API delivery
How?

                      Access Control?
                                                          Developers
Your content &
   services
                 Security?                                            Customers

                                                 Monitoring?
                                                           Partners
        Your
        API         Monetizing ?
                                                                          Affiliates

                                    User Experience?
                                              Mobile Users

                    Scalability?                               Internal
                                                               Projects
                                         Flexibility?
                               Reach?
                        The Plug & Play Cloud API Management                      25
                               Platform & Infrastructure
API Management
“Managing” your API operations



                                                                       Developers
 Your content &
    services                         Access Control                                Customers
                                     & Security

                                     Analytics &                                       Partners
          Your                       Reporting
                      API Business



          API
                                     Developer &                                        Affiliates
                                     Partner Portal
                      Engine




                                     Billing &                                  Mobile Users
                                     Payments

                     API Management Solution
                                                                            Internal
                                                                            Projects



                                     The Plug & Play Cloud API Management                         26
                                            Platform & Infrastructure
What is your API?                            Who will use your                            How do you offer
WHAT




                                                                                           HOW
                                             WHO
                                                    API?                                         your API?


Your API is the product?                     Business Partners?                            Business Model?
Calls/requests to your API are the           Facilitate the integration of your product    Direct/Indirect? Tiered/Freemium?
primary (only?) way to interact with your    in as many devices, services or software      Revenue sharing? White labeling?




                                                                                                                                        The Plug & Play Cloud API Management
technology, data, content                    provided by your business partners            Partnerships?
(e.g.          Twillio,          Amazon      (e.g. Samsung & Skype, Spotify &
AWS, SImpleGeo, Musixmatch )                 7Digital)                                     (e.g. Bluevia, Wine.com, PeopleBrowsr)




                                                                                                                                               Platform & Infrastructure
Extends the         reach     of    your
                                             Customers?                                    Technology choice?
product?
Your API is a way for your partners to       Sell your product (content, data or           Authorization, provisioning and control of
make their customers experience your         services) directly to clients through your    accesses? Usage Tracking?
product        via        their    own       API                                           Proxy versus Plugin API Management
apps, devices, solution or service           (e.g. Twilio, Daily Telegraph, LiveOps)       solution?
(e.g. Skype, Maxdome, 7Digital)

Promotes your product?                       Developers?                                   User Experience?
Advertise your product in different ways -   “Outsource” your R&D to Developers.           SDK? Widget? Interaction and Support?
such as via an affiliate program.            Tap into their fantastic creativity and       T&C and SLAs proposed? Blogs?
(e.g. Wine.com, Oodle.com)                   innovation skills to evolve your product      Forum? Documentation?
                                             (e.g. Twilio, Salesforce)

Makes your product better, richer?           Your Company?                                 Marketing, Promotion?
Your API is a channel to get new             Make it easier, faster and more flexible to   Hackathons, Dev. Challenges? Private
content/value "into” your business that      use/access your assets. Homogenize            Beta, Public Beta? Use cases?
goes to make up part of the service.         and centralize access to your data.           (e.g. Viadeo Dev Challenge)
(e.g. Twitter, eBay, Facebook)               (e.g. Netflix, Seevl, The Guardian, NPR)
                                                                                                                                        27
Conclusion

RECOMMENDATIONS


             The Plug & Play Cloud API Management   28
                    Platform & Infrastructure
Dos & Don’ts
Tips and tips to avoid pitfalls


Dos                                                   Don’ts
①    API first, Mobile second, Web third              ①     API as a “side project”

②    Do your homework                                 ②     Neglect developers
     (Who, What, How)
                                                      ③     Bad documentation (or inexistent)
③    Start “small” in terms of
     functionalities (you can always add              ④     Bad sample code/examples (or
     but you can never remove)                              inexistent)
④    Provide a compelling value                       ①     No or unclear Terms &
     proposition to drive adoption and                      Conditions
     grow your API ecosystem

⑤    Remain flexible to evolve with the
     needs of your user base


                                  The Plug & Play Cloud API Management
                                         Platform & Infrastructure                         29
Business Opportunities

APIS TYPOLOGY


                     The Plug & Play Cloud API Management   30
                            Platform & Infrastructure
4 types of business APIs
First it’s worth thinking about the different functional roles of an API


                                                                           e.g


1    The API is the product


2    The API projects the product


3    The API promotes the product


4    The API powers and feeds the product


                                 The Plug & Play Cloud API Management            31
                                        Platform & Infrastructure
Digging deeper
 Each type of API has different potential business value associated with it




         1                      2                              3                   4
                                                                              Powers and
                           Projects the                 Promotes the
  Is the product                                                               feeds the
                             product                      product
                                                                                product
• Direct revenue        • Reach more                 • Biz Dev / Lead     • Content
• Utility / Pay per       places                       Gen                  acquisition
  transaction           • Provides more              • User acquisition   • Partner tie-in
• Tiered pricing          utility                    • Advertising        • Internal
  bands                 • Enable mobile              • Brand promotion      innovation
                        • Allow deeper               • Affiliate
                          integration                  programs




                                The Plug & Play Cloud API Management                         32
                                       Platform & Infrastructure
1   2         3   4



Direct Revenues
The API as a direct revenue driver




                                      The only customer experience may be
     is the product                   via the API or via a 3rd party using the
                                      API.
     projects the
       product
                                      Billing relationship may be to the end
                                      user or the partner / distributor.

                                                                             e.g

       Whitelabel Channel


       “Sell Through” Channel

                              The Plug & Play Cloud API Management                     33
                                     Platform & Infrastructure
1   2         3   4



Indirect Revenues
The API as a indirect revenue driver




     promotes the                      The API plays a supporting role – the
        product                        product is the main event. The billing
                                       relationship is unlikely to be tied to the
                                       API.
       feeds the
        product
                                       API ROI needs to be measured by
                                       product metrics.
                                                                             e.g

      “Free” Modality


      “Affiliate” Modality
                              The Plug & Play Cloud API Management                     34
                                     Platform & Infrastructure
Business Opportunities

APIS & BUSINESS MODELS


                     The Plug & Play Cloud API Management   35
                            Platform & Infrastructure
The API Is the product
Core value is tied up in the API


                                             Others

  API is Core Value


                                                                      Direct customer usage
                                                                          Encourage resellers
                                    API
                                                      Ecosystem              Build tech knowledge
                                                       Strategy
                      e.g                                                  Enable new services

Brings easy access                                                     Encourage 3rd party tools
to complex Telecom
technologies

                                   $ If      Core service sees usage growth.



                               The Plug & Play Cloud API Management                             36
                                      Platform & Infrastructure
The API Projects the product
  Extends availability of functionalities to new places

      Mobile apps
      3rd Parties integration
      Added utility                             Others
      Added to a product




                                                                         Cultivate partner ecosystem
                                                                               Innovation opportunities
                                       API
                                                         Ecosystem               Build switching costs
                                                          Strategy
                          e.g                                                 Encourage 3rd party tools

                                                                            Enables new services
1,700+ Apps on
Force.com
50k+ Developers
                                                Increasing customer spend (primary) and
                                      $ If      number of customers (secondary) for core
                                                product

                                  The Plug & Play Cloud API Management                                 37
                                         Platform & Infrastructure
The API Promotes the product
  Secondary function and indirect revenue impact


        Secondary (non core) service
        Designed to drive leads/traffic                 Others

Widge
  t




                                                                                 Distribute “Teaser” information
                                                                                       Brand Diffusion
                                               API
                                                                 Ecosystem                Promote to niches
                                                                  Strategy
                            e.g                                                         Cultivate partners
        Widgets to
        Whole sites powered                                                         Improve partners Impact

          10‟s 1000‟s of affiliates


                                              $ If      Increasing customer number (primary) and
                                                        spend (secondary) on core product


                                          The Plug & Play Cloud API Management                                38
                                                 Platform & Infrastructure
The API Powers & Feeds the product
   Content acquisition via the API



  Content, User                                    Others
  information,
  Ratings, comments
  Etc. into the service

                                                                            Leverage social networks
                                                                                Brand Diffusion
                                          API
                                                            Ecosystem              Facilitate Access
                                                             Strategy
                              e.g                                               Virtuous circle data in/out

13 Billion calls/day on API                                                  Improve partners & businesses
>75% of traffic by API                                                        Impact
250,000 Apps (probably less
now…)
                                                   when UGC (user generated content) brings
                                         $ If
                                                   appreciable value to the central product


                                     The Plug & Play Cloud API Management                              39
                                            Platform & Infrastructure
Conclusion

        Business Models Diversity                     What API(s) for my Business
                                                                Model?

            10.40%                                   What are my core assets?
12.50%
                                                     Who will use my API(s) and for what
                        23.60%                        purpose?
                                                     How will I make available my API(s)?
                                                    Don’t put lipstick on a pig, it will
                           26.30%                            still be a pig…
         20.10%
                                                    Don’t just build it and think they
7.20%                                                          will come…
   API is the Product   Product Addition            It is the organization’s core
   Product Projection   Government               business which is valuable and the
   Scientific           Non-Profit
                                                    API is the channel into this.

                             The Plug & Play Cloud API Management                            40
                                    Platform & Infrastructure
Thank you !

QUESTIONS & ANSWERS


              The Plug & Play Cloud API Management   41
                     Platform & Infrastructure
Thank you !                                          |       Q&A
     Web: http://www.3scale.net
    Email: guillaume@3scale.net
     Twitter: @guillaumebalas


  3scale USA.                        3scale SPAIN                   3scale UK
    440 N Wolfe Rd,                Calle Llacuna 162-164      Techhub, 76-80 City Rd
Sunnyvale, CA 94085                      08018 Barcelona          London EC1Y 2BJ
               USA                                 Spain            United Kingdom
  +1 (408) 524 1503                      +34 933 092 786          +44 758 069 2832

                      The Plug & Play Cloud API Management                        42
                             Platform & Infrastructure
Resources

•   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-2012



                              The Plug & Play Cloud API Management                     43
                                     Platform & Infrastructure

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APIs for biz dev 2.0 - Which business model?

  • 1. APIs for Biz Dev 2.0 Which Business Model? Guillaume Balas - CMO @3scale guillaume@3scale.net - @guillaumebalas
  • 2. Introduction THE RISE OF THE APIS The Plug & Play Cloud API Management 2 Platform & Infrastructure
  • 3. APIs are growing & reshaping the new Web This is not a trend, this is a fact 13B / Day (May „11) 5B / Day (April „10) 5B / Day (Oct „09) 3B / Day (March „09) 1.1B / Day (April „11) 1B / Day (Q1 „12) 50% Traffic (March „08) Success for these businesses is 8,000 APIs heavily relying on their API(s) The Plug & Play Cloud API Management 3 Platform & Infrastructure
  • 4. 8,000 APIs: that’s just the tip of the Iceberg Private for Partners At 3scale we actually believes that there is 5x to 10x this number out Private (for Now) there. With an approximated 100% annual growth, that would mean around 1 Truly Private Million APIs by 2017 The Plug & Play Cloud API Management 4 Platform & Infrastructure
  • 5. APIs are everywhere Examples Media & Content SaaS Integration Social & e-Commerce Others Interest is broad and deep. APIs are currently reshaping the web, and disrupting some industries: telecoms, payments, etc! The Plug & Play Cloud API Management 5 Platform & Infrastructure
  • 6. What is an API ? API 101 The Plug & Play Cloud API Management 6 Platform & Infrastructure
  • 7. Application Programming Interface Tech. Definition “A particular set of rules and specifications that a software program can follow to access and make use of the services and resources provided by another particular software program that implements that API. It serves as an interface between different software programs and facilitates their interaction, similar to the way the user interface facilitates interaction between humans and computers.” The Plug & Play Cloud API Management 7 Platform & Infrastructure
  • 8. Application Programming Interface A Business Definition “ We are nearing the time when pps opening our supply chains across the Web isn‟t just a good idea, it will be essential for competitive survival. Dion Hinchcliffe, ZDNet A artners “ APIs provide a scalable way to do business development and create P ncome I partnerships. “BizDev 2.0. I call it”. Caterina Fake, Flickr Adam DuVander, The Plug & Play Cloud API Management 8 Platform & Infrastructure
  • 9. API WHY IS IT IMPORTANT? The Plug & Play Cloud API Management 9 Platform & Infrastructure
  • 10. Web sites are local There was 645 Million Web sites as of March 2012 Disadvantages:  Limited reach  Lost business opportunities  Very Limited brand awareness  Significant SEO and SEM costs  Web scraping risks Source: Dion Hinchcliffe, http://blogs.zdnet.con/Hinchcliffe The Plug & Play Cloud API Management 10 Platform & Infrastructure
  • 11. APIs help you grow your business APIs are Biz Dev 2.0 – The first paradigm shift Advantages: APIs unlock new distribution channels & enable the expansion of your business beyond the limits of your web site. API Deployment Focus 38% Multi-Channel 51% Mobile Apps 11% Non-Mobile Source: Dion Hinchcliffe, http://blogs.zdnet.con/Hinchcliffe The Plug & Play Cloud API Management 11 Platform & Infrastructure
  • 12. APIs Deliver Raw Data, Content and Services Allowing you to… Create New Build an Power Mobile Distribution Partner Up Ecosystem Apps Channels Serve any type Rationalize & Decrease your of Control access Protect IPR cost of serving device, software to your your customer , anywhere resources “Externalize” Create New your R&D. Lower Barriers Reach More Business Foster to Integration Customers Models Innovation The Plug & Play Cloud API Management 12 Platform & Infrastructure
  • 13. APIs Deliver Raw Data, Content and Services Generating Strategic Advantage Business Advantage New Revenue Streams The Plug & Play Cloud API Management 13 Platform & Infrastructure
  • 14. An API? SO WHAT NOW? The Plug & Play Cloud API Management 14 Platform & Infrastructure
  • 15. Take away #1 Don‟t put lipstick on a pig. It will still be a pig… The Plug & Play Cloud API Management 15 Platform & Infrastructure
  • 16. Take Away #2 Don‟t just build it and think they will come… You might wait very long… The Plug & Play Cloud API Management 16 Platform & Infrastructure
  • 17. Take Away #3 It is the organization‟s core business which is valuable. The API is “just” the channel into this. The Plug & Play Cloud API Management 17 Platform & Infrastructure
  • 18. Take Away #4 What API for my Business Model? The Plug & Play Cloud API Management 18 Platform & Infrastructure
  • 19. So what now? API STRATEGY 101 The Plug & Play Cloud API Management 19 Platform & Infrastructure
  • 20. API business strategy Get the most from your API APIs enable cloud scale MVC, ① Identify your core asset ② Choose the complementary asset which will deliver most value ③ Define the strategy to capture the value most effectively Examples of API Business Strategy allowing you to focus on your core Presentation Logic Data Mission Revolutionize the way asset. ✓ people watch movies Simplify the world of ✓ telecom by providing simple, powerful, pay-as- you-go IaaS Increase the world's ✓ access to data, especially free and open data The Plug & Play Cloud API Management 20 Platform & Infrastructure
  • 21. API typology Concepts Typical Evolution of an API 1 Private APIs Rationales They are used internally to facilitate the Rationalize infrastructure integration of different Reduce costs applications/systems used by your Increase flexibility company. Improve internal operations Partners APIs Enable the integration of software between your organization and your business Value-added service partners. Up sell Must have for your partners Public APIs Publicly expose information and functionality of one or various of your Foster innovation systems/applications to 3rd that don‟t Increase reach, traffic necessarily have a business relationship New revenue stream with your company 1 Not necessarilly always the case (e.g musiXmatch, Viadeo, Skype) The Plug & Play Cloud API Management 21 Platform & Infrastructure
  • 22. API openness cycle Concept Internal Re-Use Inter Depts, Dashboards, Processes Raw Service Customer Mesure, Collect, Analyze Re-Use Apps, Integration CORE ASSET S Open to Partners & Anybody Distribution 1000 Flowers, Market Extension New Revenue, New Reach, Ecosystem The Plug & Play Cloud API Management 22 Platform & Infrastructure
  • 23. API business model Another paradigm shift Source: John Musser, ProgrammableWeb.com The Plug & Play Cloud API Management 23 Platform & Infrastructure
  • 24. API delivery How? Developers Your core assets Customers Partners Your API Affiliates Mobile Users Internal Projects The Plug & Play Cloud API Management 24 Platform & Infrastructure
  • 25. API delivery How? Access Control? Developers Your content & services Security? Customers Monitoring? Partners Your API Monetizing ? Affiliates User Experience? Mobile Users Scalability? Internal Projects Flexibility? Reach? The Plug & Play Cloud API Management 25 Platform & Infrastructure
  • 26. API Management “Managing” your API operations Developers Your content & services Access Control Customers & Security Analytics & Partners Your Reporting API Business API Developer & Affiliates Partner Portal Engine Billing & Mobile Users Payments API Management Solution Internal Projects The Plug & Play Cloud API Management 26 Platform & Infrastructure
  • 27. What is your API? Who will use your How do you offer WHAT HOW WHO API? your API? Your API is the product? Business Partners? Business Model? Calls/requests to your API are the Facilitate the integration of your product Direct/Indirect? Tiered/Freemium? primary (only?) way to interact with your in as many devices, services or software Revenue sharing? White labeling? The Plug & Play Cloud API Management technology, data, content provided by your business partners Partnerships? (e.g. Twillio, Amazon (e.g. Samsung & Skype, Spotify & AWS, SImpleGeo, Musixmatch ) 7Digital) (e.g. Bluevia, Wine.com, PeopleBrowsr) Platform & Infrastructure Extends the reach of your Customers? Technology choice? product? Your API is a way for your partners to Sell your product (content, data or Authorization, provisioning and control of make their customers experience your services) directly to clients through your accesses? Usage Tracking? product via their own API Proxy versus Plugin API Management apps, devices, solution or service (e.g. Twilio, Daily Telegraph, LiveOps) solution? (e.g. Skype, Maxdome, 7Digital) Promotes your product? Developers? User Experience? Advertise your product in different ways - “Outsource” your R&D to Developers. SDK? Widget? Interaction and Support? such as via an affiliate program. Tap into their fantastic creativity and T&C and SLAs proposed? Blogs? (e.g. Wine.com, Oodle.com) innovation skills to evolve your product Forum? Documentation? (e.g. Twilio, Salesforce) Makes your product better, richer? Your Company? Marketing, Promotion? Your API is a channel to get new Make it easier, faster and more flexible to Hackathons, Dev. Challenges? Private content/value "into” your business that use/access your assets. Homogenize Beta, Public Beta? Use cases? goes to make up part of the service. and centralize access to your data. (e.g. Viadeo Dev Challenge) (e.g. Twitter, eBay, Facebook) (e.g. Netflix, Seevl, The Guardian, NPR) 27
  • 28. Conclusion RECOMMENDATIONS The Plug & Play Cloud API Management 28 Platform & Infrastructure
  • 29. Dos & Don’ts Tips and tips to avoid pitfalls Dos Don’ts ① API first, Mobile second, Web third ① API as a “side project” ② Do your homework ② Neglect developers (Who, What, How) ③ Bad documentation (or inexistent) ③ Start “small” in terms of functionalities (you can always add ④ Bad sample code/examples (or but you can never remove) inexistent) ④ Provide a compelling value ① No or unclear Terms & proposition to drive adoption and Conditions grow your API ecosystem ⑤ Remain flexible to evolve with the needs of your user base The Plug & Play Cloud API Management Platform & Infrastructure 29
  • 30. Business Opportunities APIS TYPOLOGY The Plug & Play Cloud API Management 30 Platform & Infrastructure
  • 31. 4 types of business APIs First it’s worth thinking about the different functional roles of an API e.g 1 The API is the product 2 The API projects the product 3 The API promotes the product 4 The API powers and feeds the product The Plug & Play Cloud API Management 31 Platform & Infrastructure
  • 32. Digging deeper Each type of API has different potential business value associated with it 1 2 3 4 Powers and Projects the Promotes the Is the product feeds the product product product • Direct revenue • Reach more • Biz Dev / Lead • Content • Utility / Pay per places Gen acquisition transaction • Provides more • User acquisition • Partner tie-in • Tiered pricing utility • Advertising • Internal bands • Enable mobile • Brand promotion innovation • Allow deeper • Affiliate integration programs The Plug & Play Cloud API Management 32 Platform & Infrastructure
  • 33. 1 2 3 4 Direct Revenues The API as a direct revenue driver The only customer experience may be is the product via the API or via a 3rd party using the API. projects the product Billing relationship may be to the end user or the partner / distributor. e.g Whitelabel Channel “Sell Through” Channel The Plug & Play Cloud API Management 33 Platform & Infrastructure
  • 34. 1 2 3 4 Indirect Revenues The API as a indirect revenue driver promotes the The API plays a supporting role – the product product is the main event. The billing relationship is unlikely to be tied to the API. feeds the product API ROI needs to be measured by product metrics. e.g “Free” Modality “Affiliate” Modality The Plug & Play Cloud API Management 34 Platform & Infrastructure
  • 35. Business Opportunities APIS & BUSINESS MODELS The Plug & Play Cloud API Management 35 Platform & Infrastructure
  • 36. The API Is the product Core value is tied up in the API Others API is Core Value Direct customer usage Encourage resellers API Ecosystem Build tech knowledge Strategy e.g Enable new services Brings easy access Encourage 3rd party tools to complex Telecom technologies $ If Core service sees usage growth. The Plug & Play Cloud API Management 36 Platform & Infrastructure
  • 37. The API Projects the product Extends availability of functionalities to new places Mobile apps 3rd Parties integration Added utility Others Added to a product Cultivate partner ecosystem Innovation opportunities API Ecosystem Build switching costs Strategy e.g Encourage 3rd party tools Enables new services 1,700+ Apps on Force.com 50k+ Developers Increasing customer spend (primary) and $ If number of customers (secondary) for core product The Plug & Play Cloud API Management 37 Platform & Infrastructure
  • 38. The API Promotes the product Secondary function and indirect revenue impact Secondary (non core) service Designed to drive leads/traffic Others Widge t Distribute “Teaser” information Brand Diffusion API Ecosystem Promote to niches Strategy e.g Cultivate partners Widgets to Whole sites powered Improve partners Impact 10‟s 1000‟s of affiliates $ If Increasing customer number (primary) and spend (secondary) on core product The Plug & Play Cloud API Management 38 Platform & Infrastructure
  • 39. The API Powers & Feeds the product Content acquisition via the API Content, User Others information, Ratings, comments Etc. into the service Leverage social networks Brand Diffusion API Ecosystem Facilitate Access Strategy e.g Virtuous circle data in/out 13 Billion calls/day on API Improve partners & businesses >75% of traffic by API Impact 250,000 Apps (probably less now…) when UGC (user generated content) brings $ If appreciable value to the central product The Plug & Play Cloud API Management 39 Platform & Infrastructure
  • 40. Conclusion Business Models Diversity What API(s) for my Business Model? 10.40%  What are my core assets? 12.50%  Who will use my API(s) and for what 23.60% purpose?  How will I make available my API(s)? Don’t put lipstick on a pig, it will 26.30% still be a pig… 20.10% Don’t just build it and think they 7.20% will come… API is the Product Product Addition It is the organization’s core Product Projection Government business which is valuable and the Scientific Non-Profit API is the channel into this. The Plug & Play Cloud API Management 40 Platform & Infrastructure
  • 41. Thank you ! QUESTIONS & ANSWERS The Plug & Play Cloud API Management 41 Platform & Infrastructure
  • 42. Thank you ! | Q&A Web: http://www.3scale.net Email: guillaume@3scale.net Twitter: @guillaumebalas 3scale USA. 3scale SPAIN 3scale UK 440 N Wolfe Rd, Calle Llacuna 162-164 Techhub, 76-80 City Rd Sunnyvale, CA 94085 08018 Barcelona London EC1Y 2BJ USA Spain United Kingdom +1 (408) 524 1503 +34 933 092 786 +44 758 069 2832 The Plug & Play Cloud API Management 42 Platform & Infrastructure
  • 43. Resources • 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-2012 The Plug & Play Cloud API Management 43 Platform & Infrastructure

Editor's Notes

  1. These four categories have distinct revenue models. Some APIs combine elements of several classes.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.