Why C-Level Should Care About APIs: It's the New Economy

WHY SHOULD C-LEVEL CARE
ABOUT APIS?
IT'S THE NEW ECONOMY, STUPID.

//

1

THIS WORK WAS MADE FOR YOU TO SHARE, REUSE, REMIX,
REWORK…
It is licensed under the Creative Commons BY-NC-SA license to allow for further
contributions by experts and users in the coming months.

You are free to share and remix/adapt the work.
You must cite this document:
FABERNOVEL, Why Should I Care About APIs, December 2013
You may not use this work for commercial purposes. You may distribute a modified
work under the same or similar license.

Our job is to help large organizations think and act like startups. And we believe this
cannot be achieved without causing people to want to innovate and explore new
business models. Our ambition is to inspire you by giving you the keys to understand
new markets like Russia, new business drivers like APIs or successful companies like
Apple, Amazon, Facebook… or LinkedIn.

//

2

PART #1

DIVE IN THE API ECONOMY
//

3

WHAT IS AN API?

An Application Programming Interface
(API) is a specification intended to be used
as an interface by software components
to communicate with each other. An API
may include specifications for routines, data
structures, object classes, and variables.

//

4

THERE ARE THREE MAIN TYPES OF APIS

Open

Partner

Private

Open APIs allow companies to
publicly expose information
and functionalities of one or
various systems and
applications to third parties
that do not necessarily have a
business relationship with
them.

Partner APIs are used to
facilitate communication and
integration of software
between a company and its
business partners

Private APIs are used
internally to facilitate the
integration of different
applications and systems used
by a company.

Advantages:
•  Value-added service
•  Up sell
•  Must have for business
partners

Advantages:
•  Rationalized infrastructure
•  Reduced costs
•  Increase flexibility: “realtime” business
•  Improved internal
operations

Advantages:
•  Delegated R&D
•  Increased reach, traffic
•  New revenue stream

//

5

APIS IS AN INNOVATIVE AND EFFICIENT MODEL ALLOWING
COMPANIES TO MANAGE THEIR CORE BUSINESS ONLY
API-DRIVEN COMPANY

TRADITIONAL COMPANY

Core
business

Finance

HR

HR

Finance

R&D

vs.

R&D

“Elastic” IT

Marketing
Sales
IT

Logistics

Logistics

Marketing

In a traditional company, all
functions are internalized to
support the core business

In an API-driven company, support
functions are externalized via an API,
focus is on the core business
//

6

« GOOGLE NOW » IS AN EXECUTION OF INTERNAL & EXTERNAL
APIS FOR PREDICTIVE INTELLIGENCE

Google Agenda &
Maps APIs

Flight Carriers APIs

Google Weather API

Travel Agency API

The value of Google Now lies in the aggregation of mostly free data external and internal data

//

7

TODAY, OPEN API GROWTH IS SKYROCKETING...

Number of public APIs listed on ProgrammableWeb

Source: ProgrammableWeb

//

8

...AND OPEN APIS MEAN A LOT OF EXPOSURE FOR WEB GIANTS

30% $3.8B

9M

tweets from Twitter oﬃcial APIs

AWS’ revenues (API-based)

apps & websites connected

14

1

1

billion API calls / day

Sources: the Verge, Gartner, Facebook, Netﬂix, Klout, ebay



//

9

PART #2

THE RISE OF THE PROGRAMMABLE
ECONOMY
//

10

MOST APIS ARE PRIVATE AND THUS INVISIBLE TO THE PUBLIC

Open APIs

10 332 APIs

Private APIs

//

11

HISTORICALLY, APIS WERE USED BY BIG SOFTWARE COMPANIES
BUT THEIR USAGE IS BECOMING MUCH MORE STANDARD TODAY

Application Services APIs
•  Build new functionalities
•  Trouble-free interoperability
•  Accessible to big companies

APIs for operating systems
•  Create application for OS
•  Attract developers
•  Enlarge customer base
•  Limited to big software
companies

1985 - 2001
Source: 3Scale, What is an API?

Web services APIs
•  Share data or services internally
and externally
•  More uniﬁed communication protocol
•  Accessible to any company
•  Easy integration

Infrastructure services APIs
•  Allows companies to
externalize IT infrastructures
•  Access to computing power
•  Available to anyone

1990s

2002

Internet of Things APIs
•  Share data or services
internally and externally
•  Generate new data and
optimize objects usage
•  Get real-time information
on objects usage

2006

2013
//

12

IN THE 90’S APIS ALLOWED PROGRAMMERS TO
DEVELOP APPLICATIONS FOR OS

//

13

TODAY, APIS CONNECT SMARTPHONES, COMPUTERS,
TABLETS, ETC.

//

14

TOMORROW, ALL OBJECTS AND PEOPLE WILL BE ABLE TO EXCHANGE
RESOURCES THROUGH APIS

//

15

TOMORROW: THE RISE OF CONNECTED DEVICES IS THE
FUEL BEHIND BOTH PRIVATE AND PUBLIC APIS GROWTH

1
billion of everyday devices
are connected today

Source: Ericsson (considered a conservative ﬁgure)

50

billion devices will be
connected in 2020, and
this ﬁgure will double every
5 years
//

AFTER TOMORROW: THE PROGRAMMABLE ECONOMY

APIs foster all web
services

APIs are universal
infrastructure

At the beginning of the
2000’s there was a
website for everything:

APIs are the roads and
railways of the
information revolution.

•  Check the weather
•  Check in for a ﬂight
•  Book an hotel

Like distance to natural
ressources during the
XXth Century,
companies' ability to
use APIs becomes a key
factor of success today.

Tomorrow, everything
will be aggregated on a
single application like
Apple Passbook or
Google Now.

APIs will be the
pipelines for the XXIth
Century gold: data.

APIs are a basic need
During past years, being
connected everywhere
has switched from an
option to a must-needed
for all smartphone users.
While connected objects
become more and more
mainstream, their users
will ask for common
langages to plug them.

//

17

WHY C-LEVEL SHOULD BE INTERESTED IN APIS?

Communica7on

Director

CEO

CFO

CMO

COO

Sales

Director

HR

//

18

BECAUSE APIS ARE ALREADY DISRUPTING ALL TRADITIONAL
INDUSTRIES

Retail

Health

Car Industry

Media

Farming

//

19

1// SEVEN&I: APIS & MASS-CUSTOMIZATION
7&I is a leading global company operating convenience stores. To maintain its position as
world largest franchisor, surpassing McDonalds, 7&I relies on a cutting-edge IT system
integrating all business departments in an “elastic” cloud infrastructure.
Internal APIs allow 7&I to take full advantage of their big data collection.

$29B+
market cap

56,000
stores globally

$65B

2013 revenue

// This retail giant implemented in its 15,000’s Japanese stores:

#1

100%

points of contact
connected

100%
line-up
optimized from
big data

Sources: Seven&I Annual Report 2013, The Japan Times, 7Spot, LINE campaign in 7&I shops

3X

deliveries per day

//

21

2// CONNECTING ALL POINTS OF CONTACT THROUGH APIS

1 // ADVANCED CASHIER
DATA COLLECTION

PRIVATE API
Ø  Push sales data

2 // ADVANCED LOYALTY
PLATFORM
• 
• 
• 
• 
• 

•  User data (age, gender)
•  Environment data (location,
weather, time & date)
•  Manually added information

25M card holders
15,000 shops network
Digital payment platform
Smartphone/NFC version
Staﬀ incentives on membership activation

PRIVATE API
Ø  Pull recommendations

3 // BIG DATA & ANALYTICS

•  Real-time data processing:
•  Stock management optimization
•  Store line-up recommendations

4 // MASS-CUSTOMIZATION
•  Store line-ups are changed up to 3
times/day based on data
recommendations

//

22

3// THE VALUE OF APIs: INCREASING SALES REVENUE AND
COMPETING WITH E-COMMERCE
Seven&I optimizes line-up with Big Data technologies.
Seven&I challenges Amazon and its peers by becoming a data-driven company and
building the infrastructure to create personal shopping experiences.

[
[

]
]

(in seconds)

(now in hours)

Seven&I can’t beat e-commerce giants and real-time customization. But strong and
determined Big Data and intraday restocking strategies help them stay competitive with
e-commerce execution speed.
APIs help retail giants reach e-commerce speed

//

23

1// OMRON: DATA RESELLING
OMRON is a Japanese manufacturer of health-related connected objects. OMRON
is historically an automation and electronic components company, which recently
entered the eHealth services business through private proprietary APIs.

+30%

Growth of OMRON B2B activities in
2013. Target revenue: $130M in 2015

Since 2012, OMRON partnered with DOCOMO and operated a business model switch, based
on APIs. Their new oﬀer, Wellness LINK by OMRON, is a B2B service aggregating the Cloud
data from 15 OMRON devices (Bluetooth, NFC and USB).

Until 2012

Data accumulation and visualization for users

From 2013

New business model: creation of reference data sets for external
partners, sold through APIs.

Sources: WellnessLINK (jp), Aninews.in, Docomo

//

25

2// FROM DEVICE MANUFACTURING TO DATA RESELLING
THROUGH PRIVATE APIs
1// eHEALTH DEVICES

PRIVATE API
Ø  Push health data

•  Blood pressure monitor
•  Thermometer
•  Scale Body Composition
monitor
•  Pedometer
•  Sleep monitors

PUBLIC API
Ø  Pull health data

PARTNER API
Ø  Pull Patterns
Ø  Pull Predictions
PRIVATE API
Ø  Pull health data

2// PUBLIC API

•  10+ mobile device applications
•  Stronger engagement with tech
communities
•  Real-time data availability
•  Custom segmentation

3// PERSONAL
DASHBOARDS

•  Cloud processing
•  Multi-device service
•  Context-based analytics

4// PARTNERSHIP THROUGH
PRIVATE APIs
•  Real-time health data access for
practitioners
•  Home monitoring for hospitals
•  Disease and epidemics patterns
prediction for the State

//

26

3// THE VALUE OF APIs: DEVELOPPING A NEW HEALTH
INTELLIGENCE BUSINESS MODEL
By reselling its health data, OMRON monetizes massive user data and has found a new
revenue channel.

B2C

NEW: B2B

Personal data visualisation

Disease & epidemics intelligence

Today:

40
million

Japanese suﬀer high
blood pressure

16
million
patients take a
treatment

1,500
hospitals

subscribed to Wellness
LINK to optimize
treatment eﬃciency

//

27

1// HONDA INTERNAVI: FUTURE OF DRIVING
Honda was the ﬁrst car manufacturer to release a navigation system in 1983.
Internavi Floating Car is Honda connected navigation service using mobile
networks launched in 2003.
The service gather 2 millions enabled cars in Japan.

Honda uses an internal API linked to its connected cars and
navigation system (InterNavi), allowing to pull/push
information to/from vehicles:
• 

Each car pushes real-time data with location and speed

• 

Honda archives data related to more than 1B km in Japan

• 

Data are processed and shared real time
Services included:

Real-time
traﬃc conditions

Entertainment
features

Sources: Honda Connecting Lifelines, Honda Silicon Valley Lab

Car conditions

Applications
SDK

//

29

2// IN THE FUTURE CARS WILL BE MORE SIMILAR TO
SMARTPHONES: CONTENT PLATFORMS WITH APPLICATIONS FOR
EVERY USAGE

PRIVATE API
Ø  Push location & speed
Ø  Pull informations

2M

connected cars

PUBLIC API
Ø  Pull cars information

1// HONDA OFFICIAL APIs
•  Real-time car
informations on your
computer
•  Mobile devices
applications

2// PARTNER APPLICATIONS
•  Music (Pandora,
aHaradio)
•  Navigation (Smartloops,
Waze)
•  ...

PARTNER API
Ø  Push media content

PARTNER API
Ø  Push environment
information

3// PARTNER APIS PUSH
CONTENT ON INTERNAVI
•  Weather information
•  Parking availability
•  ...

//

30

3// THE VALUE OF APIS: CREATING NETWORK EFFECT IN THE CAR
INDUSTRY
• 
• 

HONDA opened a Silicon Valley Innovation Lab to work with potential partners and
ﬁnd new usages.
Lately, HONDA developped new prospectives use cases:

Share of internal APIs data to
predict road conditions after a
disaster (crowd sourcing)

Dedicated hacthakon with partners to
test and develop new usages
(the 1st Open API for a car)

Like Apple that turned the AppStore as a strong selling point, Honda is
developing an ecosystem around the Navi System.
//

31

1//COOKPAD: THE COOKING DATA PLATFORM
Cookpad started as a web recipe sharing portal (≈Marmiton) and has since become a
global intermediation platform dedicated to food. Revenue was coming from
traditional online revenue streams such as:

Membership

Advertising

Marketing

1M+

500M+

$42M

paying members

pageviews/month

marketing revenue

Thanks to proprietary APIs and advanced use of Cloud architecture, Cookpad also
developed innovative revenue streams such as monetizing analytics tools used by brands
and business partners to gain better understanding of user behavior and most preferred
ingredients.

Sources: Coockpad, Cookpad Engineering Blog, ITMedia

//

33

2// ON TOP OF CLASSICAL REVENUE STREAMS, COOKPAD’S GROWTH IS
SUSTAINED BY A SYSTEMATIC USE OF PROPRIETARY APIs AND
ADVANCED USE OF BIG DATA TECHNOLOGIES
User choice and taste

Crowd sourced by search
criteria

Reporting

Recipe analysis

PRIVATE API
Ø  Push logs
Ø  Push traﬃc data
Ø  Push search data

Dashboards

Analytics & monitoring

PARTNER API
Ø  Pull layout
recommendations
PARTNER API
Ø  Pull taste
insights
1// RETAIL
Food department
layout is adjusted
with Cookpad
analytics

2//
RESTAURANT
Insight and
analytics on
client tastes

PARTNER API
Ø  Pull taste
insights

3 // FOOD
INDUSTRY
Crowd sourced
recipes for
brands

//

34

3// THE VALUE OF APIs: A UNIQUE NEW REVENUE CHAIN AND
BIG DATA EXPERTISE
Having built a cloud API-friendly platform allows Cookpad to launch new products and innovate
faster on mobile and abroad:

API-enabled recipe
suggestions based
on physical lists

Strong links with the
tech community

Crowd sourced
translation

With APIs and a cloud infrastructure to leverage its data, Cookpad turned itself from a
user-generated recipes platform into a big data company – with the associated metrics:

$55M

$860M

50%+

2013 revenue

Market cap

Proﬁt margin

//

35

1// FUJITSU: AUTOMATING ALL FARMS
Futjitsu has launched a new service called AKISAI that aggregates nationwide data from a network
of sensors and cameras installed in ﬁelds and farms. The records include various data like soil
temperature, moisture, rainfall, or humidity.
Futjitsu wants to address the new farmer market: young ex-urbans with no farming experience.
AKISAI uses Cloud technologies to store and process all
farming data:
• 
• 
• 

Production schedules, production history, harvest volume,
and planting information pushed through APIs ;
Analytics give daily visualization of quality and cost for
each planted ﬁeld ;
Farmers can look back on the results of previous plans and
modify the farming schedule for the future.
Services included:

200,000
Recommendations
based on history and
environnement

Advanced stats
visualistations

Full farming data
Cloud storage

Sources: CNET, Akisai Video Presentation, OpenToExport.com, DaiwaHouse

Expected customers
in 2016

//

37

2// THE RURAL FLIGHT TOWARD DATA INTELLIGENCE AND
AUTOMATION
PRIVATE API
Ø  Push production harvest data
Ø  Push meteorological data

1// SENSORS

PRIVATE API
Ø  Push production
quality metrics
PRIVATE API
Ø  Pull farming
recommendations

2// MOBILE DEVICE
Smartphones enrich
Cloud data to improve
feedback quality

3// FARMING
INTELLIGENCE
Recommendations for
saving resources and
increasing revenue

PARTNER API
Ø  Pull tractor
directions

4// AUTONOMOUS FARMING
Since 2010, autonomous
tractors are using satellites to
follow recommendations bases
on history analysis

//

38

3// THE VALUE OF APIs: EMPOWERING THE NEW GENERATION OF
FARMERS WITH DATA TECHNOLOGY
The current situation in Japanese farming creates opportunities for automation and intelligence
•  60% of farmers are over 65 and the average age is over 70
•  Only 420,000 out of 1.5 million farmers are engaged in full-time farming
•  Ageing of Japanese agriculture pushed the topic of farming knowledge management

Tomorrow

After-Tomorrow

Daiwa House Agri-Cube
•  Computer assisted traditional farming:
computers helps famers to take decisions

•  Fully data-driven and computer-processed farms.
•  System using advanced data computation to optimize
resources, from electricity, humidity or hydroponic
fertilizers

//

39

THESE COMPANIES RE-INVENTED
BUSINESS MODELS WITH APIS
WHAT ABOUT YOURS ?

//

40

1// SALESFORCE, CRM IN PLATFORM-AS-A-SERVICE MODE
Salesforce provides a range of CRM services in the cloud
via an API, on a subscription basis…

Sales force automation
Customer service, support, helpdesk
Social media monitoring

…and also some products related to companies workﬂow.

Performance management

Enterprise social network

Using Salesforce requires no software installation at customer
companies sites.
//

42

2// WHAT WOULD IT COST IF THERE WERE NO APIS?
If Salesforce did not have an API, it would have to install its software at each client’s site, which means sending out staﬀ to
install the software.

What would it cost?
Let’s
assume
that:

=

3 meeting/day
200 days/year

1 salesperson

Salesperson

600 meetings/year

Salesforce has 104 000 clients
To reach that client target in 3 years Salesforce would need around:

60

salespersons

=

$9

million

Salesforce is able to handle a large basis of clients while maintaining low costs. Delivering
services through an API is far more cost eﬀective than running software locally on clients IT
infrastructures
//
43

3// SALESFORCE API EASES IT SERVICES INTEGRATION

Thanks
to
its
API,
Salesforce
can
easily
integrate
with:

Applica7ons

Web
services

//

44

1// EXPEDIA, MARKETING THROUGH APIS
Expedia is a travel booking company (train, plane, hotels, etc.). Before,
their web marketing would be done thanks to an HTML framed window
that affiliates would embed in their website.
Today, Expedia opened up an API for their affiliates to enable them to pick up:

Bookings

Photos

Search results

User reviews

It allowed developers who needed a piecemeal access to Expedia content to integrate it
seamlessly in their interfaces and experiences.

Today, Expedia Affiliate Network includes 10,000
partners and makes $2 billion revenue per year, 90%
of which comes from its API.
Source: RWW, How an API Can Transform Your Enterprise

//

46

Room 77 is a hotel
reservations aggregator

Users perform a hotel
reservation search.
Several options are
suggested; they all redirect
to the matching hotel
booking partner
websites.

Links redirecting to
Expedia website

//

47


Drives
more
traﬃc
to

Expedia

Generates
new

revenues
sources

New
distribu7on

channels

Thanks
to
its
API,
Expedia
aﬃliates
do
the

partnership
and
marke9ng
work
for
Expedia
at
a

low
marginal
cost
for
Expedia.

//

48

1// MANY USE CASE SCENARIOS ARE BUILT ON THE NETFLIX API

NeMlix
oﬀers
subscrip9on
to

unlimited
streaming
movie
and
TV

shows

In October 2008, Netﬂix opened an API to allow
developers to use its resources:
•  Movie database
•  Queue management
•  Rental history
•  …
The API is free and allows for commercial use

//

50

2// MANY USE CASE SCENARIOS ARE BUILT ON THE NETFLIX API

800+

devices can stream
Netflix content

Source: Redesigning the Netflix API, Daniel Jacobson

20 000

developers use
the Netflix API
//

51

If Netflix did not have an API, it could not have developed thousands of applications
for hundreds of devices on its own.

What would it cost if Netflix developed these apps themselves?

=

Let’s
assume
that:

50 000$/year

Developer
20 000 developers use Netflix API
Having these developers in-house would cost Netflix:

$1

billion/year

Netflix allows third party developers to build applications for all
sorts of devices, thus catering to many needs without involving
high development costs.

//

52

1// FITBIT API, EXTERNALIZING R&D
Fitbit is a fitness tracker that records health
and fitness data.
Originally, there was only one application
using the data developed by Fitbit.

In 2011, Fitbit created an API to allow third
party developers to create fitness apps
using Fitbit health data such as daily steps,
calories burned, food eaten and weight.

//

54

2// THRIVING INNOVATION BASED ON THE FITBIT API

20 apps were built on the Fitbit API creating innovative
uses of ﬁtness and health data
//

55

3// THRIVING INNOVATION BASED ON THE FITBIT API

MapMyRun
uses
FitBit
health
data
to
provide
joggers
with
sta9s9cs

such
as
calories
burned,
heartbeat,
speed,
al9tude

//

56

If Fitbit had not had an API, they would have had to develop applications internally to create innovative
use cases. Without an API, it would not be able to leverage third party developers creativity.

What would it cost if Fitbit had developed these apps themselves?

Let’s
assume
that:

= $50 000
1 application

20 applications are using ﬁtness data from Fitbit API
Developing these apps would have cost FitBit:

$1

million

Fitbit lets developers create new apps with its data, which results in higher usage of Fitbit device.
It only cost Fitbit the maintenance the API.

//

57

A COMPANY YOU MAY BE INTERESTED IN.

WORK WITH US.

http://www.fabernovel.com

//

58

Together, we craft the future of your industry
Our main areas of expertise

TRANSPORT &
UTILITIES

CULTURE, MEDIA,
ENTERTAINMENT

TELECOMS &
HIGH-TECH

Volkswagen
Hertz
SNCF
JC Decaux
EDF
Suez Environnement
SF MTA
Vinci
NY MTA

Cartoon Network
Radio France
Canal+
Lagardère
PagesJaunes Group
Hearst Magazines
WomanJournal.ru
Wikipedia
Arte

Verizon
AT&T
SFR
Orange
Twitter
Intel
4D
OZON.ru

RETAIL &
FOOD
Toys “R” Us
Leroy Merlin / Adeo
Danone
Groupe Auchan
Yves Saint Laurent
Sonia Rykiel
FNAC
SEB

BEAUTY &
HEALTHCARE
Biomerieux
L’Oreal
Sanofi
Essilor
UCSF
Laboratoires Pierre
Fabre

//

59

THANK YOU

To the fabernovel team
DESIGN
Benoît Talabot
Partner & Art Director

Anne-Audrey Gounot
Junior Art Director

And also…
Francis Perrin
Digital Strategy Consultant

COMMUNICATION
Amélie Pauvert
Communication manager

ANALYST
Cyril Vart
Partner & VP Strategy

Julien Rialan
Project Analyst in Paris

//

60

OUR WORK.
•••

mazon.com

THE HIDDEN EMPIRE
Three digital engines to reshape
and dominate retail

Facebook, The Perfect Startup.

Amazon, The Hidden Empire.

And more.

LinkedIn, the serious Network.

Expanding to Russia with Love.

//

61

// PARIS
17 rue du faubourg du Temple
75010 Paris
+33 1 42 72 20 04
meet_paris@fabernovel.com

// NEW YORK

// SAN FRANCISCO
169 11th St.
San Francisco, CA 94103 USA
+1415 626 6406
meet_sf@fabernovel.com

// MOSCOW

150 West 25th St. , Suite 503
New York, NY 10001
+1415 298 02 09
meet_nyc@fabernovel.com

3-iy Monetchikovskiy Peureulok
17, Stroenie 2 Moscow 11054 Russia
+7(999) 639 80 82
meet_moscow@fabernovel.com

//

62

Why C-Level Should Care About APIs: It's the New Economy

Recomendados

Recomendados

Más contenido relacionado

Destacado

Destacado (20)

Similar a Why C-Level Should Care About APIs: It's the New Economy

Similar a Why C-Level Should Care About APIs: It's the New Economy (20)

Más de Fabernovel

Más de Fabernovel (20)

Último

Último (20)

Why C-Level Should Care About APIs: It's the New Economy