apis and beyond: open distribution platforms
DESCRIPTION
Presented by Martin Tantow of Booz & Company at the August 2010 API Economy Meetup. Read more of Martin's work at http://mtantow.com/TRANSCRIPT
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APIs and Beyond
Open distribution platformsOpen distribution platforms
August 31st, 2010
Martin Tantow,Booz & Company
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Martin Tantow
1
� Management consultant 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� 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
2
1. Evolution of Web Service Business Models
2. The Open Computing Value Chain
3. App Stores and the Rise of Social Apponomics
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How do I monetize my digital assets?
3
3
Rupert Murdoch, Chairman & CEO,
News Corp
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Over the last couple of years we had a simple
answer: Build an API4
Products
& Services
Products
& Services
However,
building an
API is easy,
Open
Web
APIWebsite
One distribution
channel (aka
HTML website)
API ?
API is easy,
but its
distribution to
the customer /
users is not.
110,000 –
100,000
Reaching thousands
of users through an
API, being available
“everywhere”
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Not having an API today is like not having a
Web Site in the 90s5
“$7bn worth of items on eBay through APIs”
Mark Carges (Ebay CTO)
5
“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 sites.”
Jeff Bar (Amazon evangelist) / Dion Hinchcliffe (Journalist)
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Evolution of Web Service Business Models
6
Web Services
become Open
Platforms
Applications turn Websites have
Websites with
add-on API
API as an additional
access/interface to
their existing data,
e.g. Weatherbug,
Technorati, Yelp
Applications turn
into platformsWebsites 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 the network effect
7
Open
Web
APIWebsite
Products
& Services
Products
& Services
Pla
tform
s
Open
Platforms
Products
& Services
One distribution
channel (aka
HTML website)
API
110,000 –
100,000
Reaching thousands of
users through an API,
being available
“everywhere”Pla
tform
s
1,000,000s
Collaborating and
sharing with millions
of users and
customers � Ubiquity
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Why should enterprises care about?
8
� Being indispensable in this new ecosystem
� Adapt new business models and exploit new
opportunities
� Foster innovation� Foster innovation
� Future model for software acquisition
� Increased customer engagement
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The Open Computing Value Chain
9
Content & functionalityprovider / partner
Open APIs
WebsiteDirect
B2C Direct
channelsAPI
Open Distribution Channels
Value ChainSourcing Reach
Open Supply Chain
Social Apponomics
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
Indirect
Mashups
B2B
B2B
B2C
Multi-
channel
Platforms
channelsAPI
Self-serve
Enterprise 2.0
Products &
Services
Back
Front Platforms
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Social Networking: Network effect driving
towards consolidated experiences10
� 850+ social networking sites
� 55.6MM adults visit every
monthmonth
� 46%+ ‘Online Adults’ visit
� 9.3% of all internet time
� Facebook winning with adults
- 73% of SN adults have an
account
1-Sep-10 Confidential and For Internal Use Only
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New Technology Infrastructure Rapid Spawned
InnovationLife
Cycle
Managem
ent
Custom
er
Serv
ice
Com
pany P
roce
sses Content
Management
Marketplaces Services
Apps
Digital Trends� Web 2.0
11
Deposit InvestSpendSave Borrow
Custom
er
Serv
ice
Mark
eting
Innovation
Com
pany P
roce
sses
Customer Use Cases
Social
Networking
ProductivityPayments
SearchNews
Mobility &Devices
� Apps
� SOA
� Open APIs
� Portals
� Bandwidth
� Device proliferation
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Convergence of Cloud Functionality
12
Life
Cycle
Managem
ent
Custom
er
Serv
ice
Com
pany P
roce
sses
Rise of Social Apponomics
Content ManagementMarketplaces
Services
� Connections create
12
Deposit InvestSpendSave Borrow
Custom
er
Serv
ice
Mark
eting
Innovation
Com
pany P
roce
sses
Customer Use Cases
ProductivityPayments
SearchNews
Mobility
Social OS
� Connections create value
� Value from content clusters
� Ubiquity (and Agnostic)
� New digital functionality
� Untethered
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13
Domination by 2-3 Networks
Potential 18-Month
Future States
Conce
ntration
The Big Trend is Towards Monetization
None Social Sites as Commercial Portals
E-commerce Hosted on Social
Sites
Handful ofKey
Players
Commercialization
Conce
ntration
Fragmented
“Gold Rush” (like search …)
Brand-Building
Industry Today
Industry 3 years ago
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14
2008Earlier Q1/092007 Q2/09 Q4/09Q3/09
Mobile Application Stores Evolution
“Emergence”
Q1/10
Early Pioneers
Q2/10
Apple’s AppStore has been the game changer
“Gold Rush”
“Take off” The game changer
“How can I get
a place in the
game?”
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Enterprise Platforms deliver competitive
advantages15
Enterprise Platforms / App StoresEnterprise Platform Enabler
Competitive
Advantages
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Abundance of players with different agendas
but competing for the same audiences16
App Store Ecosystem
Vertical players
2
Developers
Software OSvendors
1
Users
PC OEMs4
Mobile OEM’s3
Developers
Developers
Developers
Attract Developers
Attract Customers
IndependentStores
6
ISVs/Carriers5
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Key success factors to attract both developers
and customers17
App Stores Virtuous Circle
� Quality Technical
Support
Attract Developers
� Powerful Brand &
Marketing
Attract Customers
� High Reach and
Exposure
� Generous Business
Model
� Broad and Diverse
Offerings
� Quality Storefront
� Easy Payments Engine
More
Customers
More
Developers
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Leveraging capabilities and strategic assets to
determine the best strategic play18
Ability to Steer Traffic
� Steer Traffic towards Preferred Stores
Strategic Plays for Mobile Operators
Strategic LeversAsset
EXAMPLE: MOBILE OPERATORS
2 31
Strategic Plays
Local/ Operator-Specific Content
Control of Network Quality
� Provide Own Applications
� Provide Convenient Payment ToolsPayment Tools
� Differentiate Service-level Data Packages
Own App Store
App Store Consortium
3rd Party App Store
Leveraging assets
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Key messages
19
� We’ve understood 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 � 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