API stands for Application Programming Interface. APIs allow software programs to share data and functionality with each other. Historically, APIs were used mainly by large software companies but their usage is becoming more democratic. There have been several technological eras over the past 250 years that have transformed the global economy through new technologies like steam power, electricity, oil, and information technology. Each era brought major paradigm shifts to business operations through new innovations. The information technology era introduced new computing platforms and infrastructure that enabled digital transformation across industries. APIs play an important role in this era by facilitating connectivity between systems and enabling new business models, distribution channels, partnerships, and crowdsourced product development.

1. APIS FOR HEROES

2. WHAT IS AN API?
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In other words, APIs are like male and female plugs allowing software to
share data and functionalities.
Processing
Input
Output
API Provider Program Consumer Program
APIs are like male and female plugs allowing software to share data and functionalities
Source: FaberNovel

3. THERE IS NOTHING NEW ABOUT AN API
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Historically, APIs were used by big software companies but their usage is
becoming more democratic today
1985-2001 2002 2006
APIs for operating systems
• Create application for OS
• Attract developers
• Enlarge customer base
• Limited to big software
companies
Application Services APIs
• Build new functionalities
• Trouble-free
interoperability
• Accessible to big
companies
Infrastructure services APIs
• Allows companies to externalize
IT infrastructures
• Access to computing power
• Available to anyone
Web services APIs
• Share data or services internally
and externally
• More unified communication
protocol
• Accessible to any company
• Easy integration
1990s
Source: 3Scale, What is an API?
Source: FaberNovel

4. HOW THINGS EVOLVE
Source: GardeViiance

5. A HISTORICAL PERSPECTIVE

6. FIVE TECHNOLOGICAL ERASIN LAST 250 YEARS
Industrial
Revolution
1771
Steam and
Railways
1829
Steel and
Electricity
1875
Oil &
Automobile
1908
Information
Technology
1971
Britain Britain
Continent and US
US & Germany
Britain
US
Germany
US
Europe & Asia
Each generated an important all-pervasive low cost input: a source of energy, or a crucial
material, or transportation, or communication
Arkwright’s Mill
opens in
Cromford
Test of the
“Rocket” steam
engine for the
Liverpool-
Manchester
Railway
The Carnegie
Bessemer plan
opens in Pittsburg
First Model T
comes out of
Ford’s plan in
Detroit
The Intel
microprocessor is
announced in
Santa Clara
Source: Carlota Pérez – Technological Revolutions and Financial Capital

7. FIVE ECONOMIC PARADIGM SHIFTS'
Each unleashed a profound transformation in ‘the way of doing things’ across the whole
economy
Resulting in a best-practice model made up of a set of all-pervasive technological and
organizational principles, thus a new way of ‘management’
Industrial
Revolution
1771
Steam and
Railways
1829
Steel and
Electricity
1875
Oil &
Automobile
1908
Information
Technology
1971
Mechanization
Productivity/time
keeping
Fluidity of
movement
Economies of
agglomeration
Economies of
scale
Standard parts
Vertical
integration
Cartels
Cost accounting
Mass production
Standardization
of products
Functional
specialization
Segmentation
Economies of
scope
Globalization
Source: Carlota Pérez – Technological Revolutions and Financial Capital

8. Mainframe
Computing
1960
Mini
Computing
1970
Personal
Computing
1980
Desktop
Computing
1990
Mobile
Computing
2000
1MM+
units
10MM+
units
100MM+
units
1B+
units
10B?
units
Source: Morgan Stanley, IBM, Nokia
THE IT ERA IS ABOUT HALF WAY THERE
Cycles with the Era last about 10 years. New companies often win big in new cycles. New
cycle often create more market capitalization than prior cycles.
IBM
NCR
Control Data
Honeywell
Digital Equipment
Data General
HP
Prime
Microsoft
Cisco
Intel
Apple
Oracle
Dell
Google
AOL
eBay
Tencent
Rakuten
Apple
Google
Samsung

9. THE INSTALLATION PERIOD OF THE IT ERA
Infrastructure
Telecommunications
Platforms
Software & Services
Aggregators
Content & Applications
Commerce
Retail
Like in previous eras, a cluster of new products, industries and infrastructure lay the
groundwork for dissemination.
Source: MorganStanley

10. ENABLINGTHE DIGITAL TRANSFORMATION
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An analogy: The evolution of the car industry follows the logic of APIs
Yesterday Today
Tailor made
Custom design for each element of the car
(wheels, seats, brakes, lights, roof, etc.)
Restricted modularity
No standardized processes
Car divided into subsystems (powertrain,
brakes, steering, suspension, etc.)
Main elements designed separately and
reused in different cars
Standardized processes
Communication interfaces between different
engineering teams
Carmaker = craftsman Carmaker = system integrator
Source: 3Scale, What is an API?
Source: FaberNovel

11. A PATH TO NEW OPPORTUNITIES
Source: IBM

12. THREE TECTONIC SHIFTS
ConsumptionProduction Product
Source: Business Model Generation

13. EXAMPLES
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APIs allow companies to effectively pursue the classical triptych of business
goals
Business
Development
#1
Product
Development
#2
SupplyChain
Management
#3
Source: FaberNovel

14. WHAT ARE THE REAL POSSIBILITIES?

15. SIX WAYS AN API CAN CHANGE YOUR LIFE
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An API is more than the sum of its parts, it combines many advantages
Newbusinessmodel
andrevenuestreams
Newdistributionchannels
andextendedreach
Partnershipdevelopment
ExternalizedR&D
andfosteredinnovation
Rationalizationandcontrolover
whoaccessesyourresources
Organizationflexibility
withinternalAPIs
Source: FaberNovel

16. 1. NEW BUSINESSMODELS
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An API represents a shift in traditional business models
Free User pays User gets paid Indirect
Any developer who
signs up can access
the API and use its
functionalities. This is
the model used by the
Facebook Like API.
API providers get paid
for the use of their
APIs. Different
revenue models exist.
Variant:
• Pay as you go
• Tiered
• Freemium
• Unit-based
• Transaction fee
API providers share
revenue with users
for leads they bring to
their website.
Variant:
• Revenue share
• Affiliation
API providers receive
indirect revenue from
the use of their APIs.
Salesforce for instance
sell its API as a SaaS.
Variant:
• Content
acquisition
• SaaS
• Content
syndication
• Internal use
Source: John Musser, ProgrammableWeb.com
Source: FaberNovel

17. 2. NEW DISTRIBUTION CHANNELS
Source: AdaptivePath

18. 3. PARTNERSHIP DEVELOPMENT
Source: Salesforce

19. 4. CROWDSOURCEDPRODUCT DEVELOPMENT
Source: Jawbone

20. APIs revolutionize the way
products and services are
delivered

21. www.astellainvest.com