APIs and Beyond

Open distribution platforms

August 31st, 2010

Martin Tantow,
Booz & Company
 Martin Tantow
2

 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
 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
 Agenda
3

1. Evolution of Web Service Business Models

2. The Open Computing Value Chain
3. App Stores and the Rise of Social
Apponomics
 How do I monetize my digital assets?
4

Rupert Murdoch, Chairman & CEO,

News Corp
 Over the last couple of years we had
a simple answer: Build an API
5

Product Product
s& s&
Service Service
s s
Open
Website Web
API
However,
building an
API is easy,

?
API

but its
distribution to
10,000 the customer /
users is not.
–
1
100,00
One distribution Reaching0thousands
channel (aka of users through an
HTML website) API, being available
“everywhere”
 Not having an API today is like not
having a Web Site in the 90s
6

“$7bn worth of items on eBay through APIs”

Mark Carges (Ebay CTO)

“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)

6
 Evolution of Web Service Business
Models
7

Web
Services
become
Open
Platforms
Websites Applications turn
have into platforms
become web
The API has services
overtaken The API IS the product,
Websites website e.g. Twilio, Zemanta,
with add-on
traffic Amazon WS, Strikeiron,
API The API is more Xignite
API as an additional important than the
access/interface to website, e.g. Twitter,
their existing data, eBay
e.g. Weatherbug,
Technorati, Yelp
 Platforms leverage the network
effect
8

Product Product Product

s& s& s&
Service Service Service
s s s
Open Open
Website Web Platforms
API

Platforms
API

10,000
– 1,000,00
1
100,00 0s
One distribution 0 thousands of
Reaching Collaborating and
channel (aka users through an API, sharing with millions
HTML website) being available of users and
“everywhere” customers  Ubiquity
 Why should enterprises care about?
9

 Being indispensable in this new ecosystem

 Adapt new business models and exploit new
opportunities
 Foster innovation
 Future model for software acquisition
 Increased customer engagement
 The Open Computing Value Chain
10

Value Chain
Sourcing Reach
Open Supply Chain Open Distribution Channels

Direct
Content & functionality
Website B2
provider / partner Direct
API C
Open APIs
Enterprise 2.0 B2 chann
B els

Front
Back

Products & Platforms

Indire Services
Enterprise
Platforms / App Multi-
ct Store B2 chann
APP APP APP
Consumer App
B el
Store / Mobile B2
Platfo
APP APP APP rms
C
Mashups Develop
er Platforms are
creating the
Commun required network Self-serve
ity effect to succeed in
the new distributed
ecosystem Social
Apponomics
 Social Networking: Network effect
driving towards consolidated
11 experiences

 850+ social networking sites

 55.6MM adults visit every

month

 46%+ ‘Online Adults’ visit

 9.3% of all internet time

 Facebook winning with adults -

73% of SN adults have an
account

Sep 2, 2010 Confidential and For Internal Use Only

 New Technology Infrastructure Rapid
Spawned Innovation
12
Manageme
Life Cycle

Apps
nt

Marketplaces Services
Content Digital
Customer
Service

Management
Trends
 Web 2.0
Processes
Company

News  Apps
Search  SOA
Social
Marketing

 Open APIs
Networking
 Portals

Productivity  Bandwidth
Payments
 Device
Innovation

Mobility &Devices proliferation

Save Spend Deposit Invest Borrow

Customer Use
 Convergence of Cloud Functionality
13
13
Manageme
Life Cycle

nt

Rise of
Social
Customer
Service

Content Management
Services
Marketplaces Apponomic
Processes
Company

 Connections

Search
createsvalue
News Social OS  Value from
Marketing

content clusters
 Ubiquity (and
Productivity
Mobility Payments Agnostic)
 New digital
Innovation

functionality
 Untethered

Save Spend Deposit Invest Borrow

Customer Use
 The Big Trend is Towards
Monetization
14

Potential
18-Month
Dominatio Future States
n by 2-3
Networks
Concentrati

Handful
on

of
Key Industr Indust “Gold Rush”
Players y ry (like search
3 years Today …)
ago

Fragmente
d
None Brand- Social Sites E-commerce
Building as Hosted on
Commercial Social Sites
Portals
Commercializat
ion
 Apple’s AppStore has been the game
changer
15

Mobile Application Stores Evolution

Earli 2007 2008 Q1/0 Q2/0 Q3/0 Q4/0 Q1/1 Q2/1
er 9 9 9 9 0 0
“Emergenc
e”
Early
Pioneers

“Take
The game
off”
changer
“Gold
Rush”
“How can I
get a
place in
the
game?”
 Enterprise Platforms deliver
competitive advantages
16

Enterprise Platform Enabler Enterprise Platforms / App Stores

Competitive
Advantages
 Abundance of players with different
agendas but competing for the same
17 audiences App Store
Ecosystem
Developers

1 Software 2 Vertical
OS players
vendors

Developers
6 Independe 3 Mobile
nt
Stores Users OEM’s

Developers
Attract Attract
5 ISVs/Carri
Develope 4 Customer
ers PC OEMs
rs s

Developers
 Key success factors to attract both
developers and customers
18

App Stores Virtuous Circle

Attract Attract
Developers Customers
 Powerful Brand &
 Quality Technical Marketing
Support

Broad and
e


k Diverse Offerings
Ta ff
More More
 High Reach and
Exposure
Develop o Custom
ers ers  Quality
Storefront

 Generous
Business Model
 Easy Payments
Engine
 Leveraging capabilities and strategic
assets to determine the best
19 strategic play
Strategic Plays for Mobile Operators
EXAMPLE: MOBILE OPERATOR

Asset Strategic Strategic

Levers 1 2 Plays 3
Ability to  Steer Traffic towards Preferred
Steer Traffic Stores

Local/
Operator-
Specific
 Provide Own Applications
Content App
3rd Party Own
Store
App App
Consorti
Control of Store Store
 Differentiate Service-level Data um
Network Packages
Quality

Payment  Provide Convenient Payment Tools

Tools

Leveraging assets
 Key messages
20

 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 critical to succeed
 B2C and B2B app stores are a preferred digital
distribution model
 Enterprises need to leverage their existing
assets and capabilities
Questions? Thank you!
Blog: http://mtantow.com/
Twitter: @mtantow