APIs and Beyond - Open Distribution Platforms

APIs and Beyond - Open Distribution Platforms

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  APIs and BeyondOpen distribution platforms August 31st, 2010 Martin Tantow, Booz & Company
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  Martin Tantow Managementconsultant 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
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  Agenda Evolution ofWeb Service Business Models The Open Computing Value Chain App Stores and the Rise of Social Apponomics
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  How do Imonetize my digital assets? Rupert Murdoch, Chairman & CEO, News Corp
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  Over the lastcouple of years we had a simple answer: Build an API One distribution channel (aka HTML website) Products & Services API Products & Services Open Web API Website 1 10,000 – 100,000 Reaching thousands of users through an API, being available “everywhere” ? However, building an API is easy, but its distribution to the customer / users is not.
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  Not having anAPI today is like not having a Web Site in the 90s “ $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 site s.” Jeff Bar (Amazon evangelist) / Dion Hinchcliffe (Journalist)
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  Evolution of WebService Business Models Websites with add-on API API as an additional access/interface to their existing data, e.g. Weatherbug, Technorati, Yelp Web Services become Open Platforms Applications turn into platforms Websites have become web services The API IS the product , e.g. Twilio, Zemanta, Amazon WS, Strikeiron, Xignite The API has overtaken website traffic The API is more important than the website, e.g. Twitter, eBay
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  Platforms leverage thenetwork effect One distribution channel (aka HTML website) API Open Web API Website 1 10,000 – 100,000 Reaching thousands of users through an API, being available “everywhere” Products & Services Products & Services Platforms Open Platforms 1,000,000s Collaborating and sharing with millions of users and customers  Ubiquity Products & Services
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  Why should enterprisescare about? Being indispensable in this new ecosystem Adapt new business models and exploit new opportunities Foster innovation Future model for software acquisition Increased customer engagement
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  The Open ComputingValue Chain Social Apponomics Content & functionality provider / partner Open APIs APP APP APP APP APP APP Platforms are creating the required network effect to succeed in the new distributed ecosystem Developer Community Enterprise Platforms / App Store Consumer App Store / Mobile Website Direct Indirect Mashups B2C B2B B2B B2C Multi- channel Platforms Direct channels API Self-serve Open Distribution Channels Value Chain Sourcing Reach Open Supply Chain Enterprise 2.0 Products & Services Back Front Platforms
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  Social Networking: Networkeffect driving towards consolidated experiences 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 Sep 1, 2010 Confidential and For Internal Use Only
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  New Technology InfrastructureRapid Spawned Innovation Deposit Life Cycle Management Invest Spend Save Borrow Customer Service Marketing Innovation Company Processes Customer Use Cases Social Networking Content Management Marketplaces Productivity Payments Search News Mobility &Devices Services Apps Digital Trends Web 2.0 Apps SOA Open APIs Portals Bandwidth Device proliferation
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  Convergence of CloudFunctionality Deposit Life Cycle Management Invest Spend Save Borrow Customer Service Marketing Innovation Company Processes Customer Use Cases Rise of Social Apponomics Social OS Connections create value Value from content clusters Ubiquity (and Agnostic) New digital functionality Untethered Content Management Marketplaces Productivity Payments Search News Mobility Services
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  The Big Trendis Towards Monetization None Social Sites as Commercial Portals E-commerce Hosted on Social Sites Domination by 2-3 Networks Handful of Key Players Potential 18-Month Future States Commercialization Concentration Fragmented “ Gold Rush” (like search …) Brand-Building Industry Today Industry 3 years ago
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  Apple’s AppStore hasbeen the game changer 2008 Earlier Q1/09 2007 Q2/09 Q4/09 Q3/09 Mobile Application Stores Evolution “ Gold Rush” “ Take off” “ Emergence” Q1/10 Early Pioneers The game changer “ How can I get a place in the game?” Q2/10
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  Enterprise Platforms delivercompetitive advantages Enterprise Platform Enabler Competitive Advantages Enterprise Platforms / App Stores
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  Abundance of playerswith different agendas but competing for the same audiences App Store Ecosystem Users Developers Developers Developers Developers Attract Developers Attract Customers Vertical players 2 PC OEMs 4 Mobile OEM’s 3 Independent Stores 6 ISVs/Carriers 5 Software OS vendors 1
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  Key success factorsto attract both developers and customers App Stores Virtuous Circle More Customers More Developers Take off Quality Technical Support High Reach and Exposure Generous Business Model Attract Developers Powerful Brand & Marketing Broad and Diverse Offerings Quality Storefront Easy Payments Engine Attract Customers
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  Leveraging capabilities andstrategic assets to determine the best strategic play Ability to Steer Traffic Local/ Operator- Specific Content Control of Network Quality Steer Traffic towards Preferred Stores Provide Own Applications Provide Convenient Payment Tools Payment Tools Differentiate Service-level Data Packages Strategic Plays for Mobile Operators Strategic Levers Asset EXAMPLE: MOBILE OPERATORS Own App Store 2 App Store Consortium 3 3 rd Party App Store 1 Leveraging assets Strategic Plays
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  Key messages We’veunderstood 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
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  Questions? Thank you!Blog: http:// mtantow.com / Twitter: @ mtantow