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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.

Publicado en: Tecnología
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APIs as a Product Strategy

  1. 1. APIs as a Business Strategy Ravi Kumar, Autodesk
  2. 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. 3. Did you check the weather today?
  4. 4. API
  5. 5. Growth in Web APIs since 2005 Source: Programmable Web
  6. 6. What changed?
  7. 7. The Rise of the App Economy
  8. 8. 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.
  9. 9. • 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.
  10. 10. 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.
  11. 11. 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
  12. 12. 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
  13. 13. Partner APIs - Hybrid Used to provide access to data with a trusted business partner. Strategic Value:  Collaboration  Value add  New revenue
  14. 14. 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)
  15. 15. 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
  16. 16. 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.
  17. 17. 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.
  18. 18. Many models of business APIs…
  19. 19. How to craft your API Business Model? You need to know who, what, and why before how (model)?
  20. 20. Deploying an API is easy, crafting an effective business model around it is difficult.
  21. 21. Effective API business model begins from knowing what “value” you are selling
  22. 22. API Value Chain If there is nothing of value in the business assets, the APIs wont succeed.
  23. 23. APIs only succeed if they provide something of value Some examples: Valuable APIs Valuable data Valuable audience Valuable function Valuable market
  24. 24. 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
  25. 25. 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
  26. 26. Source; API as Strategy Guide
  27. 27. Most APIs have >1 type of ROI
  28. 28. Free is a strategy • They want to become Web’s Social Operating System • Ubiquity is the strategy • Free made sense to them
  29. 29. Developer pays
  30. 30. Freemium
  31. 31. Developer gets paid
  32. 32. Crafting Your API Product Strategy
  33. 33. 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.
  34. 34. 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?
  35. 35. 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.”
  36. 36. 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
  37. 37. 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.
  38. 38. Building the Building the Developer Community
  39. 39. 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
  40. 40. 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
  41. 41.  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
  42. 42. Autodesk Developer Network (ADN) A large number of our acquisitions have been from ADN companies
  43. 43. API Management Tools
  44. 44. Programmable Web
  45. 45. Books on API Businesses Free Free by Apigee Free by Apigee
  46. 46. Books on Building Platform Products
  47. 47. 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
  48. 48. Thank you! Oct 2014 Meetup

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