APIs used to be a technical implementation detail reserved for developers and architects. In the Web age, APIs make more business sense than ever before. This presentation gives a ring side view of How to Craft Business Strategy around APIs.
1. APIs as a Business Strategy
Ravi Kumar, Autodesk
2. Agenda
API Growth Story
Types of APIs, API Contracts
API Business Models
Building the API Product Strategy
Measuring the success of your API?
How to drive adoption through
developers/partners community?
Case Studies:
◦ Success of Amazon’s Internal API
◦ The Curious Case of Netflix- Public to Private
◦ Twitter’s Love/Hate relationship with Dev Community
◦ How we do it at Autodesk?
9. Some trends in the API
economy
Combined revenues of 2.2 Billion – 2013
APIs are the key building blocks for apps.
Salesforce.com, generates nearly 50 percent
of its annual $3 billion in revenue through APIs
Expedia generates 90% of 2 Billion revenues
through APIs.
10. • Built a large
partner
ecosystem by
opening core
services for
partners to
innovate and
extend
• More traffic
(60%) comes
through
Salesforce API
than through its
website.
• Opened its
core
computing
infrastructure
as Amazon
Web
Services.
• Accessed by
APIs
• More
bandwidth
through AWS
than all global
storefronts
• Business
almost
entirely
based on
API and an
ecosystem
of developer
applications.
Transformed
how we
consume
movies with
streaming to
hundreds of
different
devices
(800+)
through the
use of APIs.
• NPR has
infused its
API into
the
engineerin
g culture.
• APIs drive
the
website,
• Transforme
d the way
NPR
shares
content.
11.
12. What is an API in business
context?
Essentially a contract between providers and consumer
describing the terms of the functionality the API will offer.
The contract increases confidence, which increases use.
APIs can be open to developers, partners, or used internally.
Contract makes connection efficient because interfaces are
documented, consistent, and predictable.
The contract is binding and it cannot be changed casually.
13. Building Blocks of an API
Contract
Definition
Terms of Service
Privacy
Service Level
Agreements
Service Accord
Interface License
Data License
• Code License
• Deprecation policy
• Roadmap
• Change Log
• Rate Limits
• Uptime/Availability
• Pricing
• Service Tiers
• Support
Facebook policy Autodesk Policy
14. Types of API
Private APIs
Public APIs
Strategic Value
Innovation
Agility/Flexibility
Efficient programming
infrastructure
Strategic Value:
Reach new customers
Drive brand awareness
Unlock value of data
15. Partner APIs - Hybrid
Used to provide access to data with a
trusted business partner.
Strategic Value:
Collaboration
Value add
New revenue
16. Partner APIs - Hybrid
Used to provide access to data with a
trusted business partner.
Strategic Value:
Collaboration
Value add
New revenue
iBooks + New York Times
(Partner APIs)
17. Business Benefits of Internal
APIs
Private APIs more prevalent.
- Accelerate projects
- Create a safety layer around key
assets
- Create a structure that supports the
engagement of external contracts
- Achieve greater agility and
maintainability
- More responsible in transformational
impact on most companies
18. The Secret to Amazon’s API success:
Internal APIs
The infamous Jeff Bezos Memo
1) All teams will henceforth expose their data and functionality
through service interfaces.
2) Teams must communicate with each other through these
interfaces.
3) There will be no other form of interprocess communication
allowed: no direct linking, no direct reads of another team's data
store, no shared-memory model, no back-doors whatsoever. The
only communication allowed is via service interface calls over the
network.
4) It doesn't matter what technology they use. HTTP, Corba,
Pubsub, custom protocols -- doesn't matter. Bezos doesn't care.
5) All service interfaces, without exception, must be designed from
the ground up to be externalizable. That is to say, the team must
plan and design to be able to expose the interface to developers in
the outside world. No exceptions.
19. The Value of Amazon’s API
Source: 3Scale
AWS: 3.8 Billion revenue in 2013 and worth 30 billion if it were a standalone
company.
24. API Value Chain
If there is nothing of value in the business assets, the
APIs wont succeed.
25. APIs only succeed if they provide
something of value
Some examples:
Valuable APIs
Valuable data
Valuable audience
Valuable function
Valuable market
26. Broad classification of business
APIs
The API is the product
The API projects the product
The API promotes the product*
The API powers and feeds the product
27. Digging deeper
The API is the product
The API projects the product
The API promotes the product*
The API powers and feeds the
product
Direct Revenue
Utility/Pay per transaction
Tiered pricing bands
Reach more places
Provide more utility
Enable mobile
Allow deeper integration
Biz dev lead generation
User acquisition
Advertising
Brand promotion
Affiliate programs
Content aquisition
Partner tie ins
Internal innovation
42. Establish a Clear Business
Objective
Establish a clear business objective
◦ What is the business purpose?
◦ What are you trying to achieve?
◦ What problems are you trying to solve?
◦ What opportunity are you trying to take
advantage of?
Have a vision for your API?
◦ Vision statement helps identify top
priorities.
43. API Strategy Questions
Who will use the API? (Internal staff, partners, or
external developers)
What assets could be made available through an
API?
Who should have access to each type of
available asset?
How should the API make those assets
available?
What type of applications could be constructed
using the API?
What will motivate the developers to use the API
to create applications?
How would those types of applications create
value for everyone involved?
How will the audience discover the applications?
44. How a company’s value is
accessed through its API?
“If a business has an API layer, it is a
sign they have been more thoughtful
about their organizational
architecture.”
“APIs are looked at as a sign that
businesses have the infrastructure to
be able to build an ecosystem around
their customers and products.”
“APIs are valued as a sign that not only
is a business building on its own
architecture, but it is making itself an
internal customer of its own products.
They are eating their own cooking.”
45. Public to Pvt : Curious Case of
Netflix
Original Netflix charter, 2008
“Expose Netflix metadata and services to the public developer
community to "let 1,000 flowers bloom". That community will
build rich and exciting new tools and services to improve the
value of Netflix to our customers.”
API delivered greatest value from:
Internal Engineering Teams
◦ Netflix Product Owners
◦ Netflix Developers
Partner Relationships
◦ External Device Manufacturers
◦ Public Developer Community
1,000 Flowers
46. Public to Pvt : Curious Case of
Netflix
18K Public
Developers
=
.5% of the traffic
to API
Netflix eventually adapted its API to better suit the interests of
internal programmers and external partners. For example, the
company no longer supports rental history-related API calls because
third-party developers could formerly resell this information or use
it to advertise competing products.
48. Developer Adoption
Hackathons
◦ Best way to spread the word out, but!!!
Nurture connection
◦ Engage where your developers community exist.
◦ They want great APIs, great products, and a
rewarding business model
◦ Great experience.
Targetted messaging
◦ Understand, segment and attract
◦ Developers differ in:
The environments they target, OS, platforms etc
Languages they use
Services they have loyalty towards, Twitter, Salesforce
49. Lessons from Twitter –
Love/hate relationship with
developers
Twitter had build an ecosystem before it decided on a business model.
Scamming ideas/features from dev community.
2010 Dev Conference: Twitter announced its acquisition of Tweetie. No map was given.
Wasn’t disclosing roadmap to all its partners. Some close partners benefitted some
didn’t.
Chirp Conference 2010 broke all trust.
They also failed to understand that the next creative use of Twitter won’t be developed
by their developers, but by some API developer — just as it was since their inception.”
Worked to better communicate while acquiring Tweetdeck and revealed part of its
roadmap.
Controversial memo by Ryan Sarver, PM, Dev:
◦ Don’t make a Twitter client using Twitter’s API.
◦ Don’t duplicate Twitter’s features.
◦ Don’t rename them.
◦ Don’t channel users away from Twitter’s ads and experience.
Twitpic for uploading photos and videos and sharing on Twitter. Twitter announced the
features in the next release and killed all apps who had such features.
Heelo in stealth mode.
“If Twitter can compete with its developers without fair notice, then why can’t we?”
Developers want complete roadmap. No one has complete roadmap. And revealing is
50. Developer APIs were critical to
AutoCAD’s early business Opens Untested
growth.
Markets
It created a significant partner
ecosystem built on desktop platform.
It built a “long tail” of solutions/design
tools for niche industries.
A large number of Autodesk
acquisitions happen around developer
products.
Cloud APIs - Hackdays
56. References
Age of API:
http://twimgs.com/infoweek/green/111413s/InformationWeek_SUP_2013_11[2].pdf
#202_o176-element
API Contract:
http://apievangelist.com/2014/07/15/an-api-definition-as-the-truth-in-the-api-contract/
Steve Yegge’s internal API rant:
https://plus.google.com/+RipRowan/posts/eVeouesvaVX
Free Vs Paid API: https://blog.apigee.com/detail/paid_vs_free_apis
Twitter ecosystem problems: http://venturebeat.com/2011/10/28/twitter-ecosystem/
view-all/
https://gigaom.com/2010/04/15/what-i-learned-at-twitters-first-chirp-conference/
Things I learnt Working on the Twitter Platform
API Billionaires Club:
http://www.programmableweb.com/news/who-belongs-to-api-billionaires-club/2011/05/25
Lessons in API Deployment from Netflix
http://apievangelist.com/2011/06/10/lessons-in-api-deployment-from-netflix/
SAAS, PAAS, IAS
http://www.rackspace.com/knowledge_center/whitepaper/understanding-the-cloud-computing-stack-
saas-paas-iaas
And the Age of the Platform. But I removed platform because it was a presentation by itself even though they are closely related.
APIs used to be a technical implementation detail reserved for developers and architects.
Never made sense as an avenue for business and have jobs API product management jobs. Now we have.
For this presentation, we will focus on Web APIs because that’s where the business is.
The context is also purely on the business aspect of it. So you don’t need to know what is RESTFUL APIs/JSON or SOAP/XML etc.
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APIs become a primary customer interface for technology-driven products and services and a key channel for driving revenue and brand engagement.
APIs are not just created to meet a technical requirements and API publishing is not merely a technical challenge. Every API is published with specific business aims in mind and API program managers must ensure these aims drive the interface design process. This lesson provides an overview of key drivers behind API programs and how these impact API architecture.
http://www.apiacademy.co/lessons/api-strategy/business-value-apis
Did you check the weather today? You would have used an API before thinking about it. It is something that is hidden to you as an end user.
But this simple application that is represented as weather on iPhone. It is dumb on its own. It just a presentation layer.
It relies upon the backend to deliver the data to the application. So an API is continously beating this app with the information it needs to serve you.
It’s web’s defacto journal of the API economy.
What changed the game?
The proliferation of internet connected devices. Each of us have 3-4 devices that are connected to a network. As a consequence, each of these machines is interacting with services through API.
Similarly, the number of apps are also increasing exponentially because of delives OS like Android and iOSes, APIs are the frmaework and infrastructure.
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social networking, social commerce, social content and their patron saints Facebook, Twitter, Netflix, Amazon and eBay, among others;
Mobile devices are our new appendage and apps are the currency of trade.
At the center is an explosive opportunity to find and mine new customers and communities that companies can tap into by way of APIs.
“APIs are going to be the driver for the digital economy and unless they [companies] are talking about APIs already, they will be left behind.”
Increasingly, a company’s APIs represent a business development tool and a new go-to-market channel that can generate substantial revenues from referrals and usage fees.
Given the strategic importance and revenue potential of this resource, the C-suite must integrate APIs into its corporate decision making.
These developments represent just the first wave of value that APIs can deliver to businesses.
“APIs are going to be the driver for the digital economy and unless they [companies] are talking about APIs already, they will be left behind.” Twilio, a cloud communications company.
http://www.forbes.com/sites/mckinsey/2014/01/07/ready-for-apis-three-steps-to-unlock-the-data-economys-most-promising-channel/
Netflix though has stopped its public API program from June this year.
Contract about how the APIs are consumed. You much of the data you want to expose, what are the permissions,
You can make changes to the APIs, but these changes are there in the implementation, and not the interfaces.
http://apievangelist.com/2014/07/15/an-api-definition-as-the-truth-in-the-api-contract/
We do not need to get to the details, I put this for the sake of completion. My point to show this is that a lot goes into an API contract.
I also investigated about them my API team and they agreed that they do not follow most of these clauses consistently.
For example, the
company longer supports rental history-related API calls because
third-party developers could formerly resell this information or use
it to advertise competing products.
Cannot clone products.
Private APIs are the more prevalent variety.
http://www.apiacademy.co/lessons/api-strategy/private-apis-vs-open-apis
Private APIs provide
Reduced complexity,
improved change management, : since user interfaces change frequently. APIs provide a way to stabilize core transaction services that enables rapid iteration
Public:
Unlockign value of some internal data sources
A goood example is iBook product from Apple. One of the features of that product is the New York Times Best seller list. And so Apple doesn’t maintain that data, NNYT owns that data. Apple needed to partner with NYT to add that capability and adding value. Partnering recognizes new types of revenue.
A goood example is iBook product from Apple. One of the features of that product is the New York Times Best seller list. And so Apple doesn’t maintain that data, NNYT owns that data. Apple needed to partner with NYT to add that capability and adding value. Partnering recognizes new types of revenue.
Companies manage collections of important internal systems, all of which mesh in complex ways to deliver products and services. As an organization grows,
these systems change, get repurposed, and, if they are well managed, they can become key assets in delivering ever more innovative services. Unfortunately however, the development of new products, services, and processes is often carried out in a manner that weaves a complex web of inter-dependencies across legacy systems. This, potentially:
Slows down innovation significantly. In some cases, it simply rules out new projects.
Greatly complicates maintenance, since the layers of dependencies often need to be worked out prior to regular maintenance activities.
Forces a significant amount of refactoring on teams tasked with creating new systems.
Actively defining the nature of the interfaces to different internal systems, departments and processes creates an environment that is ready for change and innovation.
How many of you know about this episode when a developer called Steve Yegge moved to Google from Amazon and wrote a rant that became public.
Amazon’s CEO Jeff Bezos famously issued a stern warningin 2003 to all of the company’s internal software teams,that every single service and system within the companyhad to be made accessible only by a well-documented API.
You wouldn't really think that an online bookstore needs to be an extensible, programmable platform. Would you?Well, the first big thing Bezos realized is that the infrastructure they'd built for selling and shipping books and sundry could be transformed an excellent repurposable computing platform. These services host the backends for some pretty successful companies, reddit
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It is also worth noting that he made no statement on the technology to be used
or that the same technologies needed to be used—just that interfaces be well documented and made available in a way that facilitated change management.
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Ultimately, a well-executed, internal API policy provides benefits for both the group exposing systems and for the wider organization.
A more uniform path to success for developers working on new applications, since they no longer require knowledge of a wide range of technology stacks.
That single, simple declaration created an IT (and cultural) architecture that catalyzed and stoked the stunning growth of Amazon Web Services.
3.8 Billion revenue in 2013 and worth 30 billion if it were a standalone company.
He realized long before any other Amazonian realised that Amazon needs to be a platform.
You wouldn't really think that an online bookstore needs to be an extensible, programmable platform. Would you?Well, the first big thing Bezos realized is that the infrastructure they'd built for selling and shipping books and sundry could be transformed an excellent repurposable computing platform. These services host the backends for some pretty successful companies, reddit
1. The value chain starts with business assets, something that a business wants to allow others to use.
What could be business assets? Product catalog, geospatial maps, airline status info, Twitter updates.
2. Next step is to create an API to expose those business assets. The Api provider’s job is to design the API so that the intended audiences can make the best use of it.
3. Most times, the provider is same as the owner of business assets. But sometimes they are not. If same, the benefits flow back to the business owner. If not API agreement has to reward both API provider and owner.
Enterprise functionality, Half of the transactions that cometo salesforce coem from API.
Salesforce allows you to run business apps from the cloud
Information architecture of Guardian to be used by everyone for free. Using it you can get all of their content, metadata etc. It’s used for eyewitness app.
Play this: http://www.theguardian.com/technology/video/2010/aug/16/video-open-platform-launch-highlights
Information architecture of Guardian to be used by everyone for free. Using it you can get all of their content, metadata etc. It’s used for eyewitness app.
Play this: http://www.theguardian.com/technology/video/2010/aug/16/video-open-platform-launch-highlights
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http://www.slideshare.net/3scale/the-api-economy-api-provider-perspective-european-identity-summit-2012
That’s when Google maps came with APIs, the phrase mashups came up at that time.
Much richer models. The things in 2005 still apply today fundamentally.
As the industry has figured more ways to monetize the APIs.
Most APIs have more than a single way to monetize
You will be tempted to answer where is your API going to fit in this scheme of things.
They want to become Web’s social operating system, the social dial tone. Free made sense for them,
Free APIs are also all the Gov apis. That’s free because that has the mandate to keep it free
Quintesential paid API
It’s a long page with lot of text on it. But this is the primary message
The MailChimp API allows you to sync your database with MailChimp for better list and campaign management. Create client portals, add a subscribe form to your checkout page, segment campaigns based on purchase history, link campaign stats to your database, sync email activity with your database, and more.
These terms come from the field of ecommerce and online advertising,
Amazon had an affiliate program for a decade now
Amazon has affiliate program for a decade. You add an affiliate code, put it in your blog, and get commission for clicks.
They took that existing model and took to API.
My sister works in a price comparison
http://www.shopify.com.sg/partners/apps
CPA: cost per action
Amazon thw difference is when somebody clicks you buy a product. API are under partner program. When you click you get a fraction of penny.
It is the biggest one but talks about the least.
Ebay and Twitter are examples: 3rd party applications built on ebay platform accounted 7 billion revenues.
60% of tweets came from 3rd party clients
Under Internal is how you use the API and get the ROI yourself internally.
http://developer.ebay.com/echo/
APIs shouldn’t be looked upon as engineering projects. They are critical business tools. Successful APIs need clear business objectives and track closely KPIs for business at large.
The journey of Netflix from DVD rental service to video streaming platform and ultimately API powerhouse is a timeless and instructive story of adaptability.
The story Netflix API is worth sharing because there is a lot of learning hee.
The concept of 1,000 flowers refers to the public community Netflix was targeting with the API, where ideas and applications would flower from each developer.
To foster innovation from outside
While analyzing this phenomenon, however, Netflix found the vast majority of its API requests came from internal engineers and business partners rather than lone developers. This discovery prompted the company to rethink its “thousand flower” approach.
Developer adoption is key to success of an API program. But its challenging because enterprises have to compete for their attention.
So its hard work to keep them interested in developing for you.
Nothing happens after a hackathon.
1. Twitter has had only 1 developer conference till now in 2010.
In a news as latest as last week, Twitter wants to revive its relationship with developers. Building goodwill is their 1st priority.
Planned some goodies.
First developer conference in 4 years. And presenting some goodies like a new suite of tools for building apps easily that will given them better to deal with bugs, tracking analytics and making money. Fabric as a new dev platform.
http://venturebeat.com/2011/10/28/twitter-ecosystem/view-all/
Sometimes as a company you do not know where the next business would come from. Which domain ? You do not have the research intelligence. Opening a partner ecosystem helps your developer community to find it for you.
http://usa.autodesk.com/adsk/servlet/index?siteID=123112&id=21599809
The Autodesk Certified Apps Program is a NEW program offered to Autodesk Developer Network (ADN) members with applications that offer the highest level of quality, integration, and compatibility with select Autodesk products and releases.
80% of our acquisitions have been from ADN companies.
If all that you heard about API management sounds overwhelming, you don’t have to worry. There are numerous API management firms that help you in handholding API stuff and charting the API strategy for you.
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Develop security policies, usage policies, selective access to data and services. Both Layer 7 and SOA Software cite the need to serve the different constituencies of the enterprise.
A platform by definition needs to be extensible. There needs to be a way to build on top of it. This requires both product APIs and SDK (developer toolkit). Layer 7 supplies both.