APIs as a Product Strategy
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APIs used to be a technical implementation detail reserved for developers and architects. In the Web age, APIs make more business sense than ever before. This presentation gives a ring side view of How to Craft Business Strategy around APIs.
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APIs as a Product Strategy
- 1. APIs as a Business Strategy Ravi Kumar, Autodesk
- 2. Agenda API Growth Story Types of APIs, API Contracts API Business Models Building the API Product Strategy Measuring the success of your API? How to drive adoption through developers/partners community? Case Studies: ◦ Success of Amazon’s Internal API ◦ The Curious Case of Netflix- Public to Private ◦ Twitter’s Love/Hate relationship with Dev Community ◦ How we do it at Autodesk?
- 3. Did you check the weather today?
- 5. API
- 6. Growth in Web APIs since 2005 Source: Programmable Web
- 8. The Rise of the App Economy
- 9. Some trends in the API economy Combined revenues of 2.2 Billion – 2013 APIs are the key building blocks for apps. Salesforce.com, generates nearly 50 percent of its annual $3 billion in revenue through APIs Expedia generates 90% of 2 Billion revenues through APIs.
- 10. • Built a large partner ecosystem by opening core services for partners to innovate and extend • More traffic (60%) comes through Salesforce API than through its website. • Opened its core computing infrastructure as Amazon Web Services. • Accessed by APIs • More bandwidth through AWS than all global storefronts • Business almost entirely based on API and an ecosystem of developer applications. Transformed how we consume movies with streaming to hundreds of different devices (800+) through the use of APIs. • NPR has infused its API into the engineerin g culture. • APIs drive the website, • Transforme d the way NPR shares content.
- 12. What is an API in business context? Essentially a contract between providers and consumer describing the terms of the functionality the API will offer. The contract increases confidence, which increases use. APIs can be open to developers, partners, or used internally. Contract makes connection efficient because interfaces are documented, consistent, and predictable. The contract is binding and it cannot be changed casually.
- 13. Building Blocks of an API Contract Definition Terms of Service Privacy Service Level Agreements Service Accord Interface License Data License • Code License • Deprecation policy • Roadmap • Change Log • Rate Limits • Uptime/Availability • Pricing • Service Tiers • Support Facebook policy Autodesk Policy
- 14. Types of API Private APIs Public APIs Strategic Value Innovation Agility/Flexibility Efficient programming infrastructure Strategic Value: Reach new customers Drive brand awareness Unlock value of data
- 15. Partner APIs - Hybrid Used to provide access to data with a trusted business partner. Strategic Value: Collaboration Value add New revenue
- 16. Partner APIs - Hybrid Used to provide access to data with a trusted business partner. Strategic Value: Collaboration Value add New revenue iBooks + New York Times (Partner APIs)
- 17. Business Benefits of Internal APIs Private APIs more prevalent. - Accelerate projects - Create a safety layer around key assets - Create a structure that supports the engagement of external contracts - Achieve greater agility and maintainability - More responsible in transformational impact on most companies
- 18. The Secret to Amazon’s API success: Internal APIs The infamous Jeff Bezos Memo 1) All teams will henceforth expose their data and functionality through service interfaces. 2) Teams must communicate with each other through these interfaces. 3) There will be no other form of interprocess communication allowed: no direct linking, no direct reads of another team's data store, no shared-memory model, no back-doors whatsoever. The only communication allowed is via service interface calls over the network. 4) It doesn't matter what technology they use. HTTP, Corba, Pubsub, custom protocols -- doesn't matter. Bezos doesn't care. 5) All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.
- 19. The Value of Amazon’s API Source: 3Scale AWS: 3.8 Billion revenue in 2013 and worth 30 billion if it were a standalone company.
- 20. Many models of business APIs…
- 21. How to craft your API Business Model? You need to know who, what, and why before how (model)?
- 22. Deploying an API is easy, crafting an effective business model around it is difficult.
- 23. Effective API business model begins from knowing what “value” you are selling
- 24. API Value Chain If there is nothing of value in the business assets, the APIs wont succeed.
- 25. APIs only succeed if they provide something of value Some examples: Valuable APIs Valuable data Valuable audience Valuable function Valuable market
- 26. Broad classification of business APIs The API is the product The API projects the product The API promotes the product* The API powers and feeds the product
- 27. Digging deeper The API is the product The API projects the product The API promotes the product* The API powers and feeds the product Direct Revenue Utility/Pay per transaction Tiered pricing bands Reach more places Provide more utility Enable mobile Allow deeper integration Biz dev lead generation User acquisition Advertising Brand promotion Affiliate programs Content aquisition Partner tie ins Internal innovation
- 28. Source; API as Strategy Guide
- 30. Most APIs have >1 type of ROI
- 31. Free is a strategy • They want to become Web’s Social Operating System • Ubiquity is the strategy • Free made sense to them
- 32. Developer pays
- 35. Freemium
- 41. Crafting Your API Product Strategy
- 42. Establish a Clear Business Objective Establish a clear business objective ◦ What is the business purpose? ◦ What are you trying to achieve? ◦ What problems are you trying to solve? ◦ What opportunity are you trying to take advantage of? Have a vision for your API? ◦ Vision statement helps identify top priorities.
- 43. API Strategy Questions Who will use the API? (Internal staff, partners, or external developers) What assets could be made available through an API? Who should have access to each type of available asset? How should the API make those assets available? What type of applications could be constructed using the API? What will motivate the developers to use the API to create applications? How would those types of applications create value for everyone involved? How will the audience discover the applications?
- 44. How a company’s value is accessed through its API? “If a business has an API layer, it is a sign they have been more thoughtful about their organizational architecture.” “APIs are looked at as a sign that businesses have the infrastructure to be able to build an ecosystem around their customers and products.” “APIs are valued as a sign that not only is a business building on its own architecture, but it is making itself an internal customer of its own products. They are eating their own cooking.”
- 45. Public to Pvt : Curious Case of Netflix Original Netflix charter, 2008 “Expose Netflix metadata and services to the public developer community to "let 1,000 flowers bloom". That community will build rich and exciting new tools and services to improve the value of Netflix to our customers.” API delivered greatest value from: Internal Engineering Teams ◦ Netflix Product Owners ◦ Netflix Developers Partner Relationships ◦ External Device Manufacturers ◦ Public Developer Community 1,000 Flowers
- 46. Public to Pvt : Curious Case of Netflix 18K Public Developers = .5% of the traffic to API Netflix eventually adapted its API to better suit the interests of internal programmers and external partners. For example, the company no longer supports rental history-related API calls because third-party developers could formerly resell this information or use it to advertise competing products.
- 47. Building the Building the Developer Community
- 48. Developer Adoption Hackathons ◦ Best way to spread the word out, but!!! Nurture connection ◦ Engage where your developers community exist. ◦ They want great APIs, great products, and a rewarding business model ◦ Great experience. Targetted messaging ◦ Understand, segment and attract ◦ Developers differ in: The environments they target, OS, platforms etc Languages they use Services they have loyalty towards, Twitter, Salesforce
- 49. Lessons from Twitter – Love/hate relationship with developers Twitter had build an ecosystem before it decided on a business model. Scamming ideas/features from dev community. 2010 Dev Conference: Twitter announced its acquisition of Tweetie. No map was given. Wasn’t disclosing roadmap to all its partners. Some close partners benefitted some didn’t. Chirp Conference 2010 broke all trust. They also failed to understand that the next creative use of Twitter won’t be developed by their developers, but by some API developer — just as it was since their inception.” Worked to better communicate while acquiring Tweetdeck and revealed part of its roadmap. Controversial memo by Ryan Sarver, PM, Dev: ◦ Don’t make a Twitter client using Twitter’s API. ◦ Don’t duplicate Twitter’s features. ◦ Don’t rename them. ◦ Don’t channel users away from Twitter’s ads and experience. Twitpic for uploading photos and videos and sharing on Twitter. Twitter announced the features in the next release and killed all apps who had such features. Heelo in stealth mode. “If Twitter can compete with its developers without fair notice, then why can’t we?” Developers want complete roadmap. No one has complete roadmap. And revealing is
- 50. Developer APIs were critical to AutoCAD’s early business Opens Untested growth. Markets It created a significant partner ecosystem built on desktop platform. It built a “long tail” of solutions/design tools for niche industries. A large number of Autodesk acquisitions happen around developer products. Cloud APIs - Hackdays
- 51. Autodesk Developer Network (ADN) A large number of our acquisitions have been from ADN companies
- 53. Programmable Web
- 54. Books on API Businesses Free Free by Apigee Free by Apigee
- 55. Books on Building Platform Products
- 56. References Age of API: http://twimgs.com/infoweek/green/111413s/InformationWeek_SUP_2013_11[2].pdf #202_o176-element API Contract: http://apievangelist.com/2014/07/15/an-api-definition-as-the-truth-in-the-api-contract/ Steve Yegge’s internal API rant: https://plus.google.com/+RipRowan/posts/eVeouesvaVX Free Vs Paid API: https://blog.apigee.com/detail/paid_vs_free_apis Twitter ecosystem problems: http://venturebeat.com/2011/10/28/twitter-ecosystem/ view-all/ https://gigaom.com/2010/04/15/what-i-learned-at-twitters-first-chirp-conference/ Things I learnt Working on the Twitter Platform API Billionaires Club: http://www.programmableweb.com/news/who-belongs-to-api-billionaires-club/2011/05/25 Lessons in API Deployment from Netflix http://apievangelist.com/2011/06/10/lessons-in-api-deployment-from-netflix/ SAAS, PAAS, IAS http://www.rackspace.com/knowledge_center/whitepaper/understanding-the-cloud-computing-stack- saas-paas-iaas
- 57. Thank you! Oct 2014 Meetup
Notas do Editor
- And the Age of the Platform. But I removed platform because it was a presentation by itself even though they are closely related. APIs used to be a technical implementation detail reserved for developers and architects. Never made sense as an avenue for business and have jobs API product management jobs. Now we have. For this presentation, we will focus on Web APIs because that’s where the business is. The context is also purely on the business aspect of it. So you don’t need to know what is RESTFUL APIs/JSON or SOAP/XML etc. ---------------------------------------------------------------------------------------------------------------------------------------- APIs become a primary customer interface for technology-driven products and services and a key channel for driving revenue and brand engagement.
- APIs are not just created to meet a technical requirements and API publishing is not merely a technical challenge. Every API is published with specific business aims in mind and API program managers must ensure these aims drive the interface design process. This lesson provides an overview of key drivers behind API programs and how these impact API architecture. http://www.apiacademy.co/lessons/api-strategy/business-value-apis
- Did you check the weather today? You would have used an API before thinking about it. It is something that is hidden to you as an end user. But this simple application that is represented as weather on iPhone. It is dumb on its own. It just a presentation layer.
- It relies upon the backend to deliver the data to the application. So an API is continously beating this app with the information it needs to serve you.
- It’s web’s defacto journal of the API economy.
- What changed the game?
- The proliferation of internet connected devices. Each of us have 3-4 devices that are connected to a network. As a consequence, each of these machines is interacting with services through API. Similarly, the number of apps are also increasing exponentially because of delives OS like Android and iOSes, APIs are the frmaework and infrastructure. ------------------------------------------------------------------------------------------------------------------ social networking, social commerce, social content and their patron saints Facebook, Twitter, Netflix, Amazon and eBay, among others; Mobile devices are our new appendage and apps are the currency of trade. At the center is an explosive opportunity to find and mine new customers and communities that companies can tap into by way of APIs. “APIs are going to be the driver for the digital economy and unless they [companies] are talking about APIs already, they will be left behind.” Increasingly, a company’s APIs represent a business development tool and a new go-to-market channel that can generate substantial revenues from referrals and usage fees. Given the strategic importance and revenue potential of this resource, the C-suite must integrate APIs into its corporate decision making.
- These developments represent just the first wave of value that APIs can deliver to businesses. “APIs are going to be the driver for the digital economy and unless they [companies] are talking about APIs already, they will be left behind.” Twilio, a cloud communications company. http://www.forbes.com/sites/mckinsey/2014/01/07/ready-for-apis-three-steps-to-unlock-the-data-economys-most-promising-channel/
- Netflix though has stopped its public API program from June this year.
- Contract about how the APIs are consumed. You much of the data you want to expose, what are the permissions, You can make changes to the APIs, but these changes are there in the implementation, and not the interfaces.
- http://apievangelist.com/2014/07/15/an-api-definition-as-the-truth-in-the-api-contract/ We do not need to get to the details, I put this for the sake of completion. My point to show this is that a lot goes into an API contract. I also investigated about them my API team and they agreed that they do not follow most of these clauses consistently. For example, the company longer supports rental history-related API calls because third-party developers could formerly resell this information or use it to advertise competing products. Cannot clone products.
- Private APIs are the more prevalent variety. http://www.apiacademy.co/lessons/api-strategy/private-apis-vs-open-apis Private APIs provide Reduced complexity, improved change management, : since user interfaces change frequently. APIs provide a way to stabilize core transaction services that enables rapid iteration Public: Unlockign value of some internal data sources
- A goood example is iBook product from Apple. One of the features of that product is the New York Times Best seller list. And so Apple doesn’t maintain that data, NNYT owns that data. Apple needed to partner with NYT to add that capability and adding value. Partnering recognizes new types of revenue.
- A goood example is iBook product from Apple. One of the features of that product is the New York Times Best seller list. And so Apple doesn’t maintain that data, NNYT owns that data. Apple needed to partner with NYT to add that capability and adding value. Partnering recognizes new types of revenue.
- Companies manage collections of important internal systems, all of which mesh in complex ways to deliver products and services. As an organization grows, these systems change, get repurposed, and, if they are well managed, they can become key assets in delivering ever more innovative services. Unfortunately however, the development of new products, services, and processes is often carried out in a manner that weaves a complex web of inter-dependencies across legacy systems. This, potentially: Slows down innovation significantly. In some cases, it simply rules out new projects. Greatly complicates maintenance, since the layers of dependencies often need to be worked out prior to regular maintenance activities. Forces a significant amount of refactoring on teams tasked with creating new systems. Actively defining the nature of the interfaces to different internal systems, departments and processes creates an environment that is ready for change and innovation.
- How many of you know about this episode when a developer called Steve Yegge moved to Google from Amazon and wrote a rant that became public. Amazon’s CEO Jeff Bezos famously issued a stern warning in 2003 to all of the company’s internal software teams, that every single service and system within the company had to be made accessible only by a well-documented API. You wouldn't really think that an online bookstore needs to be an extensible, programmable platform. Would you? Well, the first big thing Bezos realized is that the infrastructure they'd built for selling and shipping books and sundry could be transformed an excellent repurposable computing platform. These services host the backends for some pretty successful companies, reddit ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- It is also worth noting that he made no statement on the technology to be used or that the same technologies needed to be used—just that interfaces be well documented and made available in a way that facilitated change management. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Ultimately, a well-executed, internal API policy provides benefits for both the group exposing systems and for the wider organization. A more uniform path to success for developers working on new applications, since they no longer require knowledge of a wide range of technology stacks.
- That single, simple declaration created an IT (and cultural) architecture that catalyzed and stoked the stunning growth of Amazon Web Services. 3.8 Billion revenue in 2013 and worth 30 billion if it were a standalone company. He realized long before any other Amazonian realised that Amazon needs to be a platform. You wouldn't really think that an online bookstore needs to be an extensible, programmable platform. Would you? Well, the first big thing Bezos realized is that the infrastructure they'd built for selling and shipping books and sundry could be transformed an excellent repurposable computing platform. These services host the backends for some pretty successful companies, reddit
- 1. The value chain starts with business assets, something that a business wants to allow others to use. What could be business assets? Product catalog, geospatial maps, airline status info, Twitter updates. 2. Next step is to create an API to expose those business assets. The Api provider’s job is to design the API so that the intended audiences can make the best use of it. 3. Most times, the provider is same as the owner of business assets. But sometimes they are not. If same, the benefits flow back to the business owner. If not API agreement has to reward both API provider and owner.
- Enterprise functionality, Half of the transactions that cometo salesforce coem from API. Salesforce allows you to run business apps from the cloud
- Information architecture of Guardian to be used by everyone for free. Using it you can get all of their content, metadata etc. It’s used for eyewitness app. Play this: http://www.theguardian.com/technology/video/2010/aug/16/video-open-platform-launch-highlights
- Information architecture of Guardian to be used by everyone for free. Using it you can get all of their content, metadata etc. It’s used for eyewitness app. Play this: http://www.theguardian.com/technology/video/2010/aug/16/video-open-platform-launch-highlights ----------------------------- http://www.slideshare.net/3scale/the-api-economy-api-provider-perspective-european-identity-summit-2012
- That’s when Google maps came with APIs, the phrase mashups came up at that time.
- Much richer models. The things in 2005 still apply today fundamentally. As the industry has figured more ways to monetize the APIs. Most APIs have more than a single way to monetize You will be tempted to answer where is your API going to fit in this scheme of things.
- They want to become Web’s social operating system, the social dial tone. Free made sense for them, Free APIs are also all the Gov apis. That’s free because that has the mandate to keep it free
- Quintesential paid API It’s a long page with lot of text on it. But this is the primary message
- The MailChimp API allows you to sync your database with MailChimp for better list and campaign management. Create client portals, add a subscribe form to your checkout page, segment campaigns based on purchase history, link campaign stats to your database, sync email activity with your database, and more.
- These terms come from the field of ecommerce and online advertising, Amazon had an affiliate program for a decade now
- Amazon has affiliate program for a decade. You add an affiliate code, put it in your blog, and get commission for clicks. They took that existing model and took to API. My sister works in a price comparison http://www.shopify.com.sg/partners/apps CPA: cost per action
- Amazon thw difference is when somebody clicks you buy a product. API are under partner program. When you click you get a fraction of penny.
- It is the biggest one but talks about the least. Ebay and Twitter are examples: 3rd party applications built on ebay platform accounted 7 billion revenues. 60% of tweets came from 3rd party clients Under Internal is how you use the API and get the ROI yourself internally. http://developer.ebay.com/echo/
- APIs shouldn’t be looked upon as engineering projects. They are critical business tools. Successful APIs need clear business objectives and track closely KPIs for business at large.
- The journey of Netflix from DVD rental service to video streaming platform and ultimately API powerhouse is a timeless and instructive story of adaptability. The story Netflix API is worth sharing because there is a lot of learning hee. The concept of 1,000 flowers refers to the public community Netflix was targeting with the API, where ideas and applications would flower from each developer. To foster innovation from outside
- While analyzing this phenomenon, however, Netflix found the vast majority of its API requests came from internal engineers and business partners rather than lone developers. This discovery prompted the company to rethink its “thousand flower” approach.
- Developer adoption is key to success of an API program. But its challenging because enterprises have to compete for their attention. So its hard work to keep them interested in developing for you.
- Nothing happens after a hackathon.
- 1. Twitter has had only 1 developer conference till now in 2010. In a news as latest as last week, Twitter wants to revive its relationship with developers. Building goodwill is their 1st priority. Planned some goodies. First developer conference in 4 years. And presenting some goodies like a new suite of tools for building apps easily that will given them better to deal with bugs, tracking analytics and making money. Fabric as a new dev platform. http://venturebeat.com/2011/10/28/twitter-ecosystem/view-all/
- Sometimes as a company you do not know where the next business would come from. Which domain ? You do not have the research intelligence. Opening a partner ecosystem helps your developer community to find it for you.
- http://usa.autodesk.com/adsk/servlet/index?siteID=123112&id=21599809 The Autodesk Certified Apps Program is a NEW program offered to Autodesk Developer Network (ADN) members with applications that offer the highest level of quality, integration, and compatibility with select Autodesk products and releases. 80% of our acquisitions have been from ADN companies.
- If all that you heard about API management sounds overwhelming, you don’t have to worry. There are numerous API management firms that help you in handholding API stuff and charting the API strategy for you. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Develop security policies, usage policies, selective access to data and services. Both Layer 7 and SOA Software cite the need to serve the different constituencies of the enterprise. A platform by definition needs to be extensible. There needs to be a way to build on top of it. This requires both product APIs and SDK (developer toolkit). Layer 7 supplies both.