How to Turn APIs into "A Profit Increase"
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New research shows that API intensity is associated with higher profitability. As both “code” and “contract,” they can be a powerful way to create and capture value—but to achieve material business impact, you need to weave vision, strategy, and a strong go-to-market together. Attend this session to: • Understand the potential of APIs to drive profit based on new, first-of-its kind research • Learn how others have built robust strategies for making the most of APIs • Take home tips and tricks for evangelizing their potential value to your organization
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How to Turn APIs into "A Profit Increase"
- 1. ©2016 Apigee Corp. All Rights Reserved. How to Turn APIs into “A Profit Increase” Bryan Kirschner Dan Sandiford Apigee Fresh Gravity
- 2. ©2016 Apigee Corp. All Rights Reserved. “The future is already here — it's just not very evenly distributed.” - William Gibson 2
- 3. ©2016 Apigee Corp. All Rights Reserved. 3
- 4. ©2016 Apigee Corp. All Rights Reserved. 4
- 5. ©2016 Apigee Corp. All Rights Reserved. 5
- 6. ©2016 Apigee Corp. All Rights Reserved. 6Source: The Center for Global Enterprise
- 7. ©2016 Apigee Corp. All Rights Reserved. 7 $4.3T Source: The Center for Global Enterprise
- 8. ©2016 Apigee Corp. All Rights Reserved. 8 $4.3T Source: The Center for Global Enterprise “On our way to building the operating system for live entertainment, we’ve grown our API from a million dollar business to a bllion dollar business.” CTO, TicketMaster
- 9. ©2016 Apigee Corp. All Rights Reserved. 9 $4.3T Source: The Center for Global Enterprise “We look to wrap an API around our stores. More than 100 apps are using our in-store photo prints APIs. More than 800,000 people have connected a fitness account to our rewards program. Developer Evangelist, Walgreens
- 10. ©2016 Apigee Corp. All Rights Reserved. 10 $4.3T Source: The Center for Global Enterprise “More and more my [B2B] customers want solutions, not monolithic products: some of their stuff, some of our stuff, even some of our competitors’ stuff. I want to be there wherever, whenever there is an opportunity.” VP, McKesson
- 11. ©2016 Apigee Corp. All Rights Reserved. Operating revenue (index: first quarter with API traffic = 100) All companies normed to quarter 0 = first quarter with API traffic Source: Benzell, Lagarda, Van Alstyne (2016) “The Role of APIs in Firm Performance” http://ssrn.com/abstract=2843326 Operating revenue 95% confidence interval for significant change
- 12. ©2016 Apigee Corp. All Rights Reserved. [Dan’s Slides] 12
- 13. Thank you
Editor's Notes
- I’ve been a partner in the journey business leaders—and by that I mean people who lead their organizations forward, whether you have an MBA or a CS degree, a marketing job title or a technical job title—have been on with APIs for four years now: from wondering what they are and if they matter, to exploration and experimentation, to using them at scale to move the needle on market share, revenue, and margin. As far back as four years ago I was sure that those who’d moved furthest down the path, fastest, were showing us what the future was going to look like. Today the future is a lot more evenly distributed…
- By 2015, you could read about the strategic value of APIs in the Harvard Business Review online.
- By 2016, major analyst firms had fully grasped and were evangelizing the power of a digital platform, powered by APIs.
- And what could be more mainstream than venerable British magazine “The Economist” explaining what APIs are? APIs pervade our daily lives and are becoming pervasive in how business gets done.
- We can literally see APIs in action, powering business transactions. This is a visualization of widely used public APIs and how they interact: every connection means one API has been “mashed up” with another in an app or website. The size of each API as a “hub” represents how many connections it has. You’ll some big hubs like the Google Maps API or the Amazon Product Advertising API. You’ll see digital native API driven businesses like Twilio and emerging ecosystems like the one around the Uber Trips API.
- Digital platforms powered by APIs account for 4.3T in market valuation and growing – but playing on this stage is not just for digital natives. Ticketmaster, Walgreens, and McKesson are all in the game …
- Digital platforms powered by APIs account for 4.3T in market valuation and growing – but playing on this stage is not just for digital natives. Ticketmaster, Walgreens, and McKesson are all in the game …
- Digital platforms powered by APIs account for 4.3T in market valuation and growing – but playing on this stage is not just for digital natives. Ticketmaster, Walgreens, and McKesson are all in the game …
- Digital platforms powered by APIs account for 4.3T in market valuation and growing – but playing on this stage is not just for digital natives. Ticketmaster, Walgreens, and McKesson are all in the game …
- The bottom line really is the bottom line: we worked with Marshall Van Alsyne, one of the economists who pioneered the study of platform economics, to conduct the fist of its kind empirical validation of the economic impact of APIs. We mapped API traffic data from more than 100 Apigee customers to publicly available financial data. Marshall and his team did rigorous econometric analysis to a peer reviewed standard and the results are clear: Using ApIs The intensity of use—how much data is flowing through a company’s APIs And having a developer portal Is positively and significantly associationed with higher operating revenue. APIs are making a real difference to the bottom line for non-digital native companies across industries, today. So the question is: how you step into the API driven business stage? How do you achieve the intensity and scale, build an ecosystem? The verdict is in on their potential – how do you form your own strategy and execute in order to realize it in your organization? That’s what our partner Dan from Fresh Gravity is here to talk about…