the api economy: api provider perspective / european identity summit 2012

The API Economy: API Provider Perspective

3scaleSteven Willmott

EIC 2012/ Munich, Germany

One of the top API Infrastructure Providers

Worldwide

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http://www.3scale.net

Out of the Box Control

Internal and External Audiences

Access Control, Rate Limits, Developer Portal, Monetization

Plug-and-play Setup

Get Traffic running immediately

Scale quickly and efficiently

The Talk will cover 3 things

API EconomyHow the Economy

WorksExamples

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API ECONOMY

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The Value of an API

Amazon.com Mobile Apps

Affiliate Sites

Ancillary Services Internal Developers

+ API

Revenue Ecosystem

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Projected Growth: APIs

CAGR: 100%

Project 250k APIs by 2016

e.g. Think of this as 10% of the Alexa 2.5 Million top Websites

Programmable Web APIDirectory Growth

10% API Traffic growth / quarter(*)

Adding Approx 100 APIs a week

(* source – 3scale customer base average)

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Massive Diversity

B2C APIs B2B APIs Partner APIs Internal APIs

(image source: http://www.programmableweb.com)

Wide range of industries starting with APIs

Companies large and small

APIs driving success for early adopters

…

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APIs will become the major way of doing business on the web

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Enterprise Inside-Out

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COMMON MODELS

Broad classes of business APIsFirst it’s worth thinking about the different functional roles of an API

The API is the product

The API projects the product

The API promotes the product

The API powers and feeds the product

e.g

Digging Deeper

is the product

projects the product

promotes the product

powers and feeds the product

Direct revenue

Utility / Pay per transaction

Tiered Pricing Bands

Reach more places

Provide more utility

Allow deeper integration

Enable Mobile

Biz Development Lead Gen

User Acquisition

Advertising

Affiliate Programs

Brand promotion

Content Acquisition

Partner tie-inInternal Innovation

The API Openess Cycle

Core Assets

Raw ServiceMeasure, Collate, Analyze

Internal Re-UseInter Dept, Dashboards, Processes

CustomerRe-useApps, Integration

Partners and DistributionNew Revenue, New Reach, Ecosystem

Open to Anybody1000 Flowers, Market Extension

DRILL DOWN

The API IS the product Core value is tied up in the API

API

API is core value

EcosystemStrategy

Direct Customer UsageEncourage Resellers

Build Tech Knowledge

Encourage 3rd Party Tools

Enable new Services

Build Switching Costs

Others

Amazon AWS

e.g

API >> Websites

Huge Growth

$ If core service sees usage growth

The API Projects the product Extends availability of functionality to new places

API

Mobile apps / 3rd

Parties / Added UtilityAdded to a product

$ If increasing customer spend (primary) and numbers (secondary) for core product

EcosystemStrategy

Encourage partner ecosystemInnovation opportunities

Build Tech Knowledge

Encourage 3rd Party Tools

Enable new Services

Build Switching Costs

Salesforce.com

e.g

Thousands of valueadd apps

50k + devs

Others

The API Promotes the product Secondary function and indirect revenue impact

API

Secondary (non core) serviceDesigned to drive Leads / traffic

$ If increasing customer numbers (primary) and spend (secondary) on core product

EcosystemStrategy

Distribute “Teaser” InformationBrand Diffusion

Promote to niches

Improve Partner Impact

Cultivate Partners

Amazon.com

e.g

10’s 1000’s of affiliates

Widgets to Whole sites powered

Others

The API Powers and Feeds the product Content acquisition via the API

API

Content, User information,Ratings, commentsEtc. into the service

$ If when UGC brings appreciable value to the central product.

EcosystemStrategy

Reach all relevant producersFacilitate Access

Virtuous circle data in/outTwitter.com

e.g

250,000 Apps

75% of traffic By API

Others

Hybrid ModelsMany APIs combine these models

Support different

audiences

Multiple revenue streams

The API often starts by serving a particular need and is repurposed over time.

The API separates Data from Business Logic and presentation to make this possible.

e.g

• Started to power affiliates• Evolved to running auctions• 60% of listing now via API• Core part of revenue stream• Entrenched market power

• Core P2P Infrastructure an API• “Skype as a platform”• Third parties embed Skype• End user uniform experience• Huge reach as a result

Entities (and Identities Involved)Managing Ecosystems, not closes silos

• Developers• Business Units

• Suppliers• ISVs• Contractors•Affiliates

• Apps• Integrations

• Independents• End Users• Aggregators• Resellers

Internal

Partners

Customers

Wider World

ZOOM OUT

Think of it as MVC

Model – View - Controller

VIEW = FORM

MODEL = DATA

CONTROLLER = BUSINESS LOGIC

Model

View Controller

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Think of your business as MVC

• Are you… – Model: Data, Content, Core Service, Raw Material– View: Audience, Market Access, Visualisation,

Presentation– Controller: Transformation, Recombination, Logic,

Value Add– More than one?

• What are the interfaces between these things?– Partners that could grow the whole?– Can you build an ecosystem around your strength?

APIs are the Glue which makes this happen

The API Economy is Upon Us!

APIs are Key to UnlockingThis Data Value

Look Ahead in the Cycle

Derive Value from Every Step

Thank you and QA

Contact: info@3scale.netWeb: http://www.3scale.net and @3scale Offices: San Francisco, Barcelona, LondonSpeaker: @njyx or steve@3scale.net

3scale

Credits & More Resources

• 3scale: http://www.3scale.net• More on API Business Models and

Development Models– http://www.slideshare.net/3scale/apis-for-biz-de

v-20-which-business-model-9672038

– http://www.slideshare.net/3scale/apis-power-mvc-for-the-web

• Images:– Flickr & iStockphoto

Resources: Commercial

• http://www.programmableweb.com• http://www.zdnet.com/blog/hinchcliffe/open-apis-reach-new-

high-water-mark-as-the-web-evolves/215

• http://www.sexywidget.com/my_weblog/2008/11/api-business-mo.html

• http://www.3scale.net/wp-content/uploads/api_ecommerce.pdf

• http://www.3scale.net/wp-content/uploads/api_media_companies.pdf

• http://www.slideshare.net/sanjayjhawar/apis-20-presentation-at-the-telco-20-conference-in-orlando-11-december-2009

Resources: Commercial

• http://www.slideshare.net/fedecarg/open-platforms-and-apis• http://www.slideshare.net/openplatform/op-commerciallaun

chv2• http://www.slideshare.net/samramji/darwins-finches-20th-ce

ntury-business-and-apis• http://www.slideshare.net/jmusser/pw-glue-conmay2010• http://www.slideshare.net/3scale/apis-the-glue-of-cloud-com

puting• http://www.slideshare.net/Mashery/api-leader-mashery-capt

ures-application-developer-trends-with-developer-pulse

• http://www.slideshare.net/Mashery/the-business-of-apis-2009-programmablewebcom