Presented by Martin Tantow of Booz & Company at the August 2010 API Economy Meetup. Read more of Martin's work at http://mtantow.com/

1. APIs and Beyond
Open distribution platforms
August 31st, 2010
Martin Tantow,
Booz & Company

2. Martin Tantow
1
Management consultant with Booz & Company, based in
San Francisco
Consumer, Media & Digital practice
Focus on corporate growth strategies in the digital space (cloud
computing, new business models, digital media, etc.)
Co-founder of 3scale networks
Cloud-based API management solution
Analysis, management and monetization of Web APIs
Previously with T-Mobile, Oliver Wyman, Viant, and others
Blog: http://mtantow.com/
Twitter: @mtantow

3. Agenda
2
1. Evolution of Web Service Business Models
2. The Open Computing Value Chain
3. App Stores and the Rise of Social Apponomics

4. How do I monetize my digital assets?
3
3
Rupert Murdoch, Chairman & CEO,
News Corp

5. Over the last couple of years we had a simple
answer: Build an API
4
Products Products
& Services & Services
Open
Website Web
API
However,
building an
API is easy,
?
API
but its
distribution to
the customer /
10,000 – users is not.
1
100,000
One distribution Reaching thousands
channel (aka of users through an
HTML website) API, being available
“everywhere”

6. Not having an API today is like not having a
Web Site in the 90s
5
“$7bn worth of items on eBay through APIs”
Mark Carges (Ebay CTO)
“The API which has easily 10 times more traffic than the website, has been really
very important to us.”
Biz Stone (co-founder, Twitter)
“The adoption of Amazon's Web services is currently driving more network
activity than everything Amazon does through their traditional Web sites.”
Jeff Bar (Amazon evangelist) / Dion Hinchcliffe (Journalist)
5

7. Evolution of Web Service Business Models
6
Web Services
become Open
Platforms
Applications turn
Websites have
into platforms
become web
services
The API has
overtaken The API IS the product,
Websites with e.g. Twilio, Zemanta,
website traffic
add-on API Amazon WS, Strikeiron,
The API is more Xignite
API as an additional important than the
access/interface to website, e.g. Twitter,
their existing data, eBay
e.g. Weatherbug,
Technorati, Yelp

8. Platforms leverage the network effect
7
Products Products Products
& Services & Services & Services
Open Open
Website Web Platforms
API
Platforms
API
10,000 –
1 1,000,000s
100,000
One distribution Reaching thousands of Collaborating and
channel (aka users through an API, sharing with millions
HTML website) being available of users and
“everywhere” customers Ubiquity

9. Why should enterprises care about?
8
Being indispensable in this new ecosystem
Adapt new business models and exploit new
opportunities
Foster innovation
Future model for software acquisition
Increased customer engagement

10. The Open Computing Value Chain
9
Value Chain
Sourcing Reach
Open Supply Chain Open Distribution Channels
Direct Content & functionality
Website B2C
provider / partner Direct
API channels
Open APIs
Enterprise 2.0 B2B
Front
Back
Products & Platforms
Indirect Services Enterprise
Platforms / App Store
Multi-
APP APP APP B2B channel
Consumer App Store Platforms
/ Mobile B2C
APP APP APP
Mashups Developer
Community Platforms are creating the
required network effect to
succeed in the new Self-serve
distributed ecosystem
Social Apponomics

11. Social Networking: Network effect driving
towards consolidated experiences
10
850+ social networking sites
55.6MM adults visit every
month
46%+ ‘Online Adults’ visit
9.3% of all internet time
Facebook winning with adults
- 73% of SN adults have an
account
1-Sep-10 Confidential and For Internal Use Only

12. New Technology Infrastructure Rapid Spawned
Innovation
11
Management
Life Cycle
Apps
Marketplaces Services
Content Digital Trends
Customer
Company Processes
Service
Management Web 2.0
News Apps
Search SOA
Social
Marketing
Open APIs
Networking
Portals
Productivity Bandwidth
Payments
Device
Innovation
Mobility &Devices proliferation
Save Spend Deposit Invest Borrow
Customer Use Cases

13. Convergence of Cloud Functionality
12
12
Management
Life Cycle
Rise of Social
Apponomics
Customer
Company Processes
Content Management
Service
Services
Marketplaces
Connections create
Search
value
News Social OS Value from content
clusters
Marketing
Productivity Ubiquity (and
Mobility Payments Agnostic)
New digital
functionality
Innovation
Untethered
Save Spend Deposit Invest Borrow
Customer Use Cases

14. The Big Trend is Towards Monetization
13
Potential
Domination 18-Month
Future States
by 2-3
Networks
Concentration
Handful of
Key
Players Industry Industry “Gold Rush”
3 years Today (like search …)
ago
Fragmented
None Brand- Social Sites as E-commerce
Building Commercial Hosted on Social
Portals Sites
Commercialization

15. Apple’s AppStore has been the game changer
14
Mobile Application Stores Evolution
Earlier 2007 2008 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10
“Emergence”
Early Pioneers
“Take off” The game changer
“Gold Rush”
“How can I get
a place in the
game?”

16. Enterprise Platforms deliver competitive
advantages
15
Enterprise Platform Enabler Enterprise Platforms / App Stores
Competitive
Advantages

17. Abundance of players with different agendas
but competing for the same audiences
16
App Store Ecosystem
Developers
1 Software OS 2 Vertical
vendors players
Developers
6 Independent 3
Stores Users Mobile OEM’s
Developers
Attract Attract
5
Developers ISVs/Carriers 4 Customers
PC OEMs
Developers

18. Key success factors to attract both developers
and customers
17
App Stores Virtuous Circle
Attract Developers Attract Customers
Powerful Brand &
Quality Technical Marketing
Support
Broad and Diverse
Offerings
High Reach and More More
Exposure Developers Customers
Quality Storefront
Generous Business
Model Easy Payments Engine

19. Leveraging capabilities and strategic assets to
determine the best strategic play
18
EXAMPLE: MOBILE OPERATORS
Strategic Plays for Mobile Operators
Asset Strategic Levers Strategic Plays
1 2 3
Ability to Steer
Steer Traffic towards Preferred Stores
Traffic
Local/ Operator-
Specific Content Provide Own Applications
3rd Party Own App App Store
App Store Store Consortium
Control of Network Differentiate Service-level Data Packages
Quality
Payment Tools Provide Convenient Payment Tools
Leveraging assets

20. Key messages
19
We’ve understood that APIs are important
APIs are easy to build but distribution is key
Enterprises need to engage in social networks
Open platforms deliver the network effect which is
critical to succeed
B2C and B2B app stores are a preferred digital distribution
model
Enterprises need to leverage their existing assets and
capabilities

21. Questions? Thank you!
Blog: http://mtantow.com/
Twitter: @mtantow