business value of apis - tfg 2012 issue2 (webcast)
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The business value of APIs
PwC Technology Forecast 2012, Issue 2
www.pwc.com/techforecast
December, 2012
PwC
Speakers
• Moderator: Sam Ramji, Apigee • Bo Parker, Center for Technology & Innovation, PwC
§ The Business value of APIs • Scott Monson , Strategy Advisory, PwC
§ Getting Business Value from APIs
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Architecture Infrastructure
PwC Center for Technology & Innovation http://www. pwc.com/cti
Applications
Data
Enterprise mobility
Cloud computing
Enterprise innovation
Social technology
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Sustainability
Advanced analytics
PwC
Background
How should clients (CIOs) deal with the challenges from multiple disruptive trends, Social, Mobile, Analytics, Cloud (SMAC) happening together? Challenges:
• Pace of change in the marketplace • Demand for new apps, services, features • Customer power (Consumerization of IT)
PwC
Interviews
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David Zanca SVP of IT, Customer Access, and Revenue Systems FedEx Services
Thomas Wicinski VP Digital Access Marketing FedEx Services
Mark Noworolski Chief Technology Officer Streetline
Jon Donovan Senior EVP Technology & Network Ops AT&T
PwC
Interviews
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Sam Ramji VP Strategy Apigee
John Musser Founder Programmableweb Alcatel-Lucent
Devon Biondi VP Strategy Services Mashery
Laura Merling SVP of Application Enablement Alcatel-Lucent
Brian Katz Director, head of mobility industrialization & engineering group Sanofi.
PwC
How are leaders responding to the SMAC challenge?
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PwC
How are successful enterprises strategically managing the confluence of SMAC and related emerging trends?
They are rethinking their enterprise architectures and emphasizing three fundamental changes: 1. Shift in value driver: digitization of business ecosystem means
information content accounts for a faster rising proportion of the overall value of any product or service.
2. Shift in operating model: tapping into new drivers of value using a digital operating model, a model attuned to participating in or integrating with expanding digital ecosystems.
3. Shift in architecture: adjusting their business and IT architectures to take advantage of the rise of RESTful APIs to become a permeable enterprise.
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PwC
Case example: Streetline and Parking ecosystem
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Business ecosystems are becoming more digitized, where information content accounts for a rising proportion of the entire value of any product or service.
PwC
Tapping rising value of linked information
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“We were looking for something where we can assign a value to each one of those bits of information.” “We use this [parking spot availability and payment] information to create a smart parking ecosystem.”
—Mark Noworolski, Streetline
PwC
Value drivers are shifting
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A consequence of SMAC is that value from bits will rise faster than from atoms.
PwC
Case example: FedEx, a culture of valuing information
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• “information about package as valuable as package”
• All assets instrumented and connected
• Innovations on customer access to information
• Architecture for low cost interactions in the ecosystem
PwC
A culture of valuing information gives FedEx a digital operating model
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“Information about the package helps us run our business better. That comes from a digital operating model where all our assets are connected and surface information to increase overall value to us and the customer.”
—David Zanca, FedEx Services “Not only do our customers want more information about the packages, but they also now want more interaction with FedEx and expect us to react to changes and resolve problems if they occur.”
—Thomas Wicinski, FedEx Services
PwC
Why companies do not have a Digital operating model?
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PwC
Emerging use of APIs scale integrations
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Use of external facing APIs to make connections in a digital ecosystem is rising
PwC
Growth driven by REST style of APIs
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REST connections are stateless, loosely coupled and use popular web protocols Although not suitable in all cases, REST is simpler and scales easily
Create permeability, promotes co-creation in digital ecosystems
PwC
AT&T: A permeable enterprise AT&T’s API program: • key pillar of innovation strategy • an architecture to move at the
pace of change • future proofs existing assets • makes AT&T network into a
platform and addressable by other innovators
• creates permeability
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“[The API program] is an architectural choice one makes for speed.”
—John Donovan, AT&T
PwC
AT&T’s goal is to make its network the most addressable network globally.
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“If you have infrastructure assets and are going to operate at a pace at which the external market is moving, you have to take capabilities—industry-specific or not—and make platforms from them.”
—John Donovan, AT&T “We’re pivoting toward thinking about architecting everything we do in a more API-centric way”
—Jacob Feinstein
PwC
Open IT: CIO enabling the permeable enterprise
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Open IT builds on prior SOA efforts to scale integrations and engage internally and externally with digital ecosystems.
PwC
Getting Business Value from APIs
Scott Monson Director, Strategy Advisory PwC US Advisory
PwC
The forces of SMAC transform the way firms collaborate with their stakeholders to unlock new value
SMAC: The power of the social enterprise Le
gacy
Bus
ines
s P
roce
sses
Employees
Trading Partners
Markets
Stakeholders
1. Business Objectives
2. Innovation Strategy
Operating Model Dimensions
4. Culture
5. Governance
6. Team/Resources
11. Motivators & Metrics
7. Funding
8. Portfolio
9. Processes
10. Ecosystem
3. Organization
PwC
Why APIs: Business Drivers
PwC CTI http://www.pwc.com/techforecast 22
API
Relevance
Innovation
Revenue
Cost Reduction
• Low touch sales channels • Time to market • Self-service
• Agile, modernized environment • Partner friendly • Permeable
• New distribution channels • New markets • New services and business models
• Co-creation • Wisdom of the crowd
PwC
Typical Engagement Elements ‘Whole Product’ Solution Life-Cycle
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1 .Strategy
2. Productize
3. Expose and Manage
4. API Optimization
5. Developer Program
PwC
Apigee
PwC
API Strategy – answer key questions related to program success by using fundamentals to define, approach and plan
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What data and services do you have?
What can be made
available?
Who is interested in that data?
How well do you engage
them? What can be monetized?
Do you aggregate
APIs?
Strategy Fundamentals
• Simplify the complexity by identifying certain aspects of the situation as critical.
Diagnosis
• The overall approach chosen to cope with or overcome obstacles identified in the diagnosis
Guiding Policy
• Feasible, coordinated policies, resource commitments, and actions designed to carry out the guiding policy.
Coherent Action Plan
Customer
Cost Competition
PwC
API Strategy: Cost - Monetization and Business Models
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• Charge for access or usage of the API Direct Revenue
• Syndicate Content and Data • Embed your API in other sites and apps – Google Maps Distribution Channel
• Expand awareness through 3rd party distribution • Measure API interactions and new traffic Marketing Channel
• Cheapest and Fastest way to build applications • Enable all platforms with one set of APIs Application Enablement
• Use to enhance existing software and platforms • Enhance internal and external use of data and
content Distribute Services
• Address the long tail of markets and segments • Increase availability to innovation 3rd Party Innovation
• Integrated enterprise code tends not to change Lock-In
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API Strategy: Customer – Developer Segments
Awareness Commitment (decision)
Development (support) Certification Marketing
(promotion)
Business Development ROI Core
Membership Managed Process
Contract/ Relationship
Marketing Opportunity/ Interest
GM 50% Community 50% Distinguish Contract/
Self Marketed
Word of Mouth /
Marketing
Excitement
Community
Informal
Word of Mouth
Corp
orat
e Pa
rtne
rs
Smal
l /
Inde
pend
ents
H
obby
ists
Most likely to have business impact
Most likely to create breakthrough innovation
Most likely to create excitement & support the community
PwC
API Strategy: Growth Scenarios
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Bus
ines
s B
enef
its
2013 2014 2015
Scenario 1 – Minimum Investment
Developer Support
Event Marketing Portal
Development
Increased Support Staffing
Thought Leadership
Exclusive member
programs
Community Management
Partnership Development
Sample App Development
Developer Evangelists
GM Specific Events
“Foundry” Design Centers
PwC
API Optimization: Getting the Most Out of Your Program
§ Key metric management § Performance measurement § Usage patterns § Standards § Competitive landscape
§ Versioning / Deprecation § Tweaks & feature updates § New API’s § Business model updates § End of life
Analyze Optimize & Maintain
Communication
Developer Community Partners
PwC
Promotion
Recruiting
Community
[[
]]
Support [ ][ ]
Developer Program: Framework
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Infr
astr
uctu
re
PwC
Developer Program: Recruiting - Getting Developer’s Interested
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Build Skills Increase Productivity
Promote Win - Win
Solve Problems
Help developers solve real world problems
PwC
Developer Program: Recruiting - Venues for creating program awareness
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• Business development • Established relationships • Trade shows • Speaking at conferences • Media
Corporate partners
• Trade shows • Speaking at
conferences • Media
Small and/or independent
• Word of mouth • Contests • Social media • Media
Hobbyists
PwC
Developer Program: Community - Three Forces of Engagement
Substance [ ]
Opportunity [ ] Charm [ ]
PwC
Developer Program: Support
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Info Resources: Documentation, Code samples, Forum, Blogs/Social Technical Resources: App lifecycle
management, Testing, Moderation, Certification
Program level
Core
Gold
Community
Fee
$$$$
$$
Free
Support level Hand
holding Some
support Open
community
Certification / Membership Levels:
PwC
Developer Program: Promote - Go to Market Strategies for Developers
Co-branding Co-Marketing
User ratings Community voting
• Co-sponsorship of trade shows
• Co-branded advertisements
Corporate partners
• App marketplace • Leaderboard of popular apps
• Periodic app marketing campaigns
Small and/or independent
• Community portal where developers can propose ideas and get voted on
Hobbyists
Help developers bring apps to market
PwC
Typical engagement elements
Measurable Value Opportunities 1. API and Developer Program Strategy 2. API Productization 3. API Exposure and Management 4. API Optimization 5. Developer Program Execution
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PwC
Conclusion: Consumerization of APIs
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• APIs are becoming open and ubiquitous in digital ecosystems
• The ability to create, expose and consume these interfaces is available to all (not just software or digital native companies)
• Abstracting business capabilities to programmable interfaces provides a systematic method and architecture to engage with SMAC and related emerging trends
• APIs are now strategic to all enterprises.
PwC
Questions?
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“APIs are the building blocks for the digital economy.”
- Laura Merling, Alcatel-Lucent
PwC
Disclaimer
PwC US helps organizations and individuals create the value they’re looking for. We’re a member of the PwC network of firms with 169,000 people in more than 158 countries. We’re committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/us. © 2012 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
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