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•••
•••
Acknowledgements

      We would like to thank our partners for their help in making this study

      Mehdi Medjaoui
      Co-founder & COO at Webshell




      Pierre-Antoine Durgeat
      Founder & Partner at Novacodex




                                                                       faberNovel 2012 ••• 2
•••
   This work was made for you to share, reuse, remix, rework!
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                         It is licensed under the Creative Commons BY-NC-SA license to allow for further
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                         You must cite this document:
                         faberNovel, 6 Reasons Why APIs Are Reshaping Your Business, November 2012.

                         You may not use this work for commercial purposes. You may distribute a modified
                         work under the same or similar license.




                         Why do we release this kind of work for free?
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                         believe that 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 or successful
                         companies like Apple, Amazon, Facebook! or the business value of APIs.

!!!!!!!!!!!!!!!!!!!!!!!"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!""#
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                                                                                                            faberNovel 2012 ••• 3
•••

Deep-Dive in the API World
•••
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.




Source: Wikipédia

                                                               faberNovel 2012 ••• 5
•••
In other words, APIs are like male and female plugs allowing software to
share data and functionalities.




                                     Input

               Processing

                                    Output




        API Provider Program                 Consumer Program


                                                                faberNovel 2012 ••• 6
•••
An analogy: The evolution of the car industry follows the logic of APIs



                            Yesterday                                    Today




              Carmaker = craftsman                       Carmaker = system integrator
           Tailor made                                     Car divided into subsystems (powertrain,
           Custom design for each element of the car       brakes, steering, suspension, etc.)
           (wheels, seats, brakes, lights, roof, etc.)     Main elements designed separately and
           Restricted modularity                           reused in different cars
           No standardized processes                       Standardized processes
                                                           Communication interfaces between different
                                                           engineering teams

Source: 3Scale, What is an API?

                                                                                        faberNovel 2012 ••• 7
•••
So, what is an API ?




                                                            API interface




                                                                         API provider



      Just like a car which consists of several      !an API is a software brick that allows someone
      subsystems designed by different               to share data, content and functionalities with
      specialized teams (internal or partners) who   others, for them to build new services based on
      communicate with each other all throughout     this data, content and functionalities (i.e. using one
      the design process!                            or several bricks). The services built can use one
                                                     or several APIs from the same or different API
                                                     providers.




                                                                                    faberNovel 2012 ••• 8
•••
The Facebook Like button uses an API to dominate social recommendation

      Before 2010: no Like API                                 After 2010: a Like API




                                                                                API




The Like button was at first intended to be used only   By embedding a line of code in their website,
on Facebook to like photos, status, comments and fan    now anyone can benefit from the Like button
pages.                                                  functionality and enable their visitors to Like
                                                        any content while browsing.

                                                                                         faberNovel 2012 ••• 9
•••
There are three main types of API




                      Private                     Partner                            Public

   Private APIs are used internally    Partner APIs are used to          Public APIs allow companies to
   to facilitate the integration of    facilitate communication and      publicly expose information
   different applications and          integration of software between   and functionalities of one or
   systems used by a company.          a company and its business        various systems and
                                       partners                          applications to third parties that
   Advantages:                                                           do not necessarily have a
   •  Rationalized infrastructure      Advantages:                       business relationship with them.
   •  Reduced costs                    •  Value-added service
   •  Increased flexibility            •  Up sell                        Advantages:
   •  Improved internal operations     •  Must have for business         •  Delegated R&D
                                          partners                       •  Increased reach, traffic
                                                                         •  New revenue stream

Source: 3Scale, The rise of the APIs

                                                                                         faberNovel 2012 ••• 10
•••
Historically, APIs were used by big software companies but their usage is
becoming more democratic today




                                   Application Services APIs
                                   •  Build new functionalities
                                   •  Trouble-free
                                                                                       Web services APIs
                                      interoperability
                                                                                       •  Share data or services internally
                                   •  Accessible to big
                                                                                          and externally
                                      companies
                                                                                       •  More unified communication
                                                                                          protocol
                                                                                       •  Accessible to any company
                                                                                       •  Easy integration
    APIs for operating systems
    •  Create application for OS
    •  Attract developers
    •  Enlarge customer base
                                                  Infrastructure services APIs
    •  Limited to big software
                                                  •  Allows companies to externalize
       companies
                                                     IT infrastructures
                                                  •  Access to computing power
                                                  •  Available to anyone




1985 - 2001                           1990s            2002                                2006
Source: 3Scale, What is an API?

                                                                                                          faberNovel 2012 ••• 11
•••
Today, API growth is skyrocketing!




                          Number of public APIs listed on ProgrammableWeb

Source: ProgrammableWeb

                                                                            faberNovel 2012 ••• 12
•••
!however, most APIs are private and thus invisible to the public




                                                8014 APIs

                               Public APIs


                              Private APIs




                                                               faberNovel 2012 ••• 13
•••
APIs mean a lot of exposure for web giants!




        13
      billion API calls / day
                                                               5
                                                        billion API calls / day
                                                                                        5
                                                                                  billion API calls / day




      1,4 1,1
      billion API calls / day                           billion API calls / day
                                                                                        1
                                                                                  billion API calls / day
Source: Open APIs, What’s Hot What’s Not, John Musser

                                                                                            faberNovel 2012 ••• 14
•••
!and also significant revenue




                                                            = $2            billion/year


      90% of what we do is business through APIs
                                          John Watton, Expedia Affiliate Network, Travolution.co.uk, April 2012




Source: John Musser, Open APIs, What’s Hot What’s Not

                                                                                                     faberNovel 2012 ••• 15
•••
API revolutionized a century old industry: the Canadian Yellow Pages!




                                                        Yellow Pages database
                                                                      API




            Yellow Pages book

      Before, The Yellow Pages were delivered     Today, The Yellow Pages data can be
      as a paper directory. Users had to flip     accessed via an API, allowing it to be present
      pages to find relevant information. The     on any device (PC, smartphone, tablets, etc.)
      content was not mobile, you had to have a   and associated with search, location-based
      Yellow Pages book at hand to find what      services and other functionalities.
      you were looking for.

                                                                                faberNovel 2012 ••• 16
•••
!and is expanding its reach to many industries




      Internet           Social             Tools         Mapping




      Shopping          Telephony          Finance       Enterprise




       Music             Photos             Videos       Messaging



                                                     faberNovel 2012 ••• 17
•••
Did you know? APIs can also be used to do unexpected things




        Generates full report of available   Users pass CAPTCHAs through the           The FullerData Fortune Cookie API
      information about a specific vehicle     API where they are solved by an         randomly generates a message (a
       based on its vehicle identification    OCR or manually. Average solved           fortune). There are a total of 882
                   number.                    response time of 15 seconds, and                 fortunes available.
                                                average accuracy rate of 90%.




       The KBS API provides users with         Who’s Hurt is an injury reporting           The MyFitnessPal API allows
      programmatic access to the KBS's          service for professional sports       developers to access and integrate the
        Korean translation of the Bible.     leagues, including football, baseball,   functionality of MyFitnessPal (tracking
                                                basketball, hockey, and soccer           food and exercise) to create new
                                                           leagues.                                 applications.


Source: ProgrammableWeb

                                                                                                          faberNovel 2012 ••• 18
•••

API Case Studies
•••
APIs, an innovative and efficient model allowing companies to manage their core
business activities only

        TRADITIONAL COMPANY                                 API-DRIVEN COMPANY



                      Core                                             Finance
                    business
                                                             HR
                                                                                            R&D




         HR         Finance           R&D
                                                vs.            IT
                                                                          Core
                                                                        business            Marketing




          IT        Logistics     Marketing                             Logistics


      In a traditional company, all functions         In an API-driven company, support
      are internalized to support the core            functions are externalized via an API,
      business                                        focus is on the core business


                                                                                    faberNovel 2012 ••• 20
Case Study #1
•••
Case Study 1. Salesforce, CRM in Platform-as-a-Service mode     1           2          3

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.
                                                              faberNovel 2012 ••• 22
•••
Case Study 1. What would it cost if there were no APIs?                                1           2          3
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                       3 meeting/day
  assume                      200 days/year                                 =
  that:  Salesperson          50 000$/year                   1 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
                                                                                     faberNovel 2012 ••• 23
•••
Case Study 1. Salesforce API eases IT services integration          1           2          3




       Thanks to its API, Salesforce can easily integrate with:

       Applications

       Web services




                                                                  faberNovel 2012 ••• 24
Case Study #2
•••
Case Study 2. Expedia, marketing through APIs                                                       1        2          3

              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

                                                                                               faberNovel 2012 ••• 26
•••
Case Study 2. Room 77, a hotel search website using
                                                        1           2          3
the Expedia API

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




                                                      faberNovel 2012 ••• 27
•••
Case Study 2. Eased partnership for Expedia and its affiliates      1           2          3




      Drives more traffic        Generates new          New distribution
          to Expedia           revenues sources           channels




         Thanks to its API, Expedia affiliates do the
        partnership and marketing work for Expedia
             at a low marginal cost for Expedia.

                                                                  faberNovel 2012 ••• 28
Case Study #3
•••
Case Study 3. Netflix, distribution on a large scale thanks
                                                                           1      2      3
to APIs




Netflix offers subscription to         In October 2008, Netflix opened an API to
unlimited streaming movie and          allow developers to use its resources:
TV shows                               •  Movie database
                                       •  Queue management
                                       •  Rental history
                                       •  !

                                       The API is free and allows for commercial30use
                                                                        faberNovel 2012 •••
•••
Case Study 3. Many use case scenarios are built on the               1           2          3
Netflix API




 800+                               devices can stream
                                    Netflix content      20 000   developers use
                                                                  the Netflix API

Source: Redesigning the Netflix API, Daniel Jacobson

                                                                   faberNovel 2012 ••• 31
•••
Case Study 3. What would it cost if there were no APIs?                                   1           2          3

             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
                                                                                        faberNovel 2012 ••• 32
Case Study #4
•••
Case Study 4. Facebook Connect API, partnership on a
                                                                  1           2          3
worldwide scale




                                                  Facebook Connect
                                                  allows users to log-in on
                                                  any websites or
                                                  application using their
                                                  Facebook information.

                                                  Third party developers can
                                                  add a “Connect with
                                                  Facebook” button by using
                                                  Facebook Connect APIs.




             Facebook Connect API has standardized
          credentials on the web, creating a universal ID

                                                                faberNovel 2012 ••• 34
•••
Case Study 4. What would it cost if there were no APIs?                             1           2          3
If Facebook did not have APIs, it could not let third party developers onboard themselves to
use Facebook Connect API, and would thus have to do partnership work.


                   What would it cost if Facebook did partnership work?


Let’s                       10 phone meetings/day
assume
that:
                            200 days/year                                    =
                            50 000$/year                                          2000 phone
           Salesperson                                       1 salesperson
                                                                                  meetings/year


                          7 million websites and apps use Facebook Connect
               To reach that partners target in 3 years Facebook would need around:



                         1100 salespersons = $55 million
      Facebook let partners onboard themselves in its ecosystem through its API, and thus built
                   partnerships on a worldwide scale while maintaining low costs
                                                                                  faberNovel 2012 ••• 35
•••
Case Study 4. Facebook Connect enriches its Social Graph                                    1           2          3

Facebook Connect is embedded in iOS 6…                                 …and in Instagram




      Connect with Facebook to apps like Safari, Photos,
      Camera, Maps, Game Center, etc.

                                                             Post pictures directly to Facebook
      Synchronize contact info, events and birthdays your
      friends have shared with you on Facebook
                                                             Chat in a native Facebook interface
      Like songs, albums and apps directly from iTunes and
      the App Store

                                                                                          faberNovel 2012 ••• 36
Case Study #5
•••
Case Study 5. Fitbit API, externalizing R&D         1           2          3

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.


                                                  faberNovel 2012 ••• 38
•••
Case Study 5. Thriving innovation based on the Fitbit API     1           2          3




       20 apps were built on the Fitbit API creating
        innovative uses of fitness and health data
                                                            faberNovel 2012 ••• 39
•••
Example: MapMyRun




      MapMyRun uses FitBit health data to provide joggers with statistics
            such as calories burned, heartbeat, speed, altitude
                                                                faberNovel 2012 ••• 40
•••
Case Study 5. What would it cost if there were no APIs?                          1           2          3

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.

                                                                               faberNovel 2012 ••• 41
Business value is
moving towards data
and its associated
uses
•••

Takeaway
•••
APIs allow companies to effectively pursue the classical triptych of business
goals



           #1                        #2                       #3

        Business                  Product                Supply Chain
       Development              Development              Management




                                                               faberNovel 2012 ••• 44
•••
!by giving access to what they do best and accessing what others do best
        Thanks to APIs, companies can benefit from other companies’ core
        business to support their own business.




                                            =                                             +

        WOOZOR, online meteo                              High quality maps                   High quality
                                                                                              weather data

         When opening up data through an API (whether it is private, partner or public), the API provider
         does the partnership work once, partners then need only onboard themselves and use their
         own resources as often as they like for marginal additional cost to the provider.


         An API provider creates the infrastructure and then each partner does the technical,
         business and legal work on their end.


       Source: Dion Hinchcliffe, Open APIs Mature Into a Next-Generation Business Model

                                                                                                    faberNovel 2012 ••• 45
•••
APIs are becoming more flexible allowing companies to add functionalities
like LEGO blocks and grow core business activities




APIs give business the ability to completely customize their strategy by choosing which
function they want to outsource via an API and which functions they want to keep internally.
It is like picking different LEGO blocks to build a tailored toy house.


                                                                              faberNovel 2012 ••• 46
•••
An API is more than the sum of its parts, it combines many advantages




       New business model          New distribution channels         Externalized R&D
       and revenue streams           and extended reach            and fostered innovation




                                Rationalization and control over   Organization flexibility
      Partnership development   who accesses your resources         with internal APIs




                                                                               faberNovel 2012 ••• 47
1
NEW BUSINESS MODELS
 & REVENUE STREAMS
•••
An API represents a shift in traditional business models




           Free                                User pays             User gets paid                 Indirect
  Any developer who                        API providers get paid   API providers share       API providers receive
  signs up can access                      for the use of their     revenue with users        indirect revenue from
  the API and use its                      APIs. Different          for leads they bring to   the use of their APIs.
  functionalities. This is                 revenue models exist.    their website.            Salesforce for instance
  the model used by the                                                                       sell its API as a SaaS.
  Facebook Like API.                       Variant:                 Variant:
                                           •  Pay as you go         •  Revenue share          Variant:
                                           •  Tiered                •  Affiliation            •  Content
                                           •  Freemium                                            acquisition
                                           •  Unit-based                                      •  SaaS
                                           •  Transaction fee                                 •  Content
                                                                                                  syndication
                                                                                              •  Internal use

Source: John Musser, ProgrammableWeb.com

                                                                                                   faberNovel 2012 ••• 49
•••
Business model 1. Free


               Case Study                          Key figures


                                              #1   2,7       billion of Likes/day




      The Facebook Like API is free to use.
      Anyone can embed a Like button on
                                              #2   2,5       million websites use
      their page.                                  the Like button
      This allowed Facebook to spread the
      Like button very rapidly everywhere


                                                   +1,000
      on the web, to enrich the Facebook
      Social Graph, to be present
      everywhere on the web, and to           #3
      position themselves as dominant in
      social recommendation.                       websites adding the Like button/
                                                   day

                                                                     faberNovel 2012 ••• 50
•••
Business model 2. User pays


                     Case Study                                                      Key figures


                                                                                #1   905         billion objects
                                                                                     stored in AWS



      Amazon Web Services (AWS) offer a
      wide variety of services (storage,
                                                                                #2   $750              million
      database, computing power, servers,                                            revenue in 2011
      application services, deployment &
      management) accessible through a set
      of APIs.

      Each of these services is charged
      following use pricing.                                                    #3   $1     million savings for
                                                                                     NASA after moving IT into AWS
Source: Statista. NASA sees $1 millions savings in moving to cloud, FierceCIO

                                                                                                       faberNovel 2012 ••• 51
•••
Business model 3. User gets paid


                   Case Study                         Key figures


                                                 #1   $9,71              billion of
                                                      revenue in 2011 for Google



      The Google Adsense API allows
      publishers to automatically serve text,
                                                 #2   28%           of Google’s
      image, video, and rich media on Google’s        revenue
      network websites, targeted following
      content and audience. These adverts are
      administered, sorted, and maintained by
      Google, and they can generate revenue
      on either a per-click or per-impression
      basis.

      Google splits revenue with publishers
      who display their ads.
Source: Google AdSense Facts

                                                                     faberNovel 2012 ••• 52
•••
Business model 4. Indirect


                    Case Study                                                        Key figures


                                                                                #1   30         minutes to share
                                                                                     resources through internal API
                                                                                     compared to months in the past


      Comcast, America’s largest TV, media,
      entertainment and cable provider created
                                                                                #2   x100              increase in the
      an internal API for teams to easily share                                      API traffic last year
      data and solutions.

      The API is free for use by internal teams.


                                                                                     $8,5
      Today, teams can build new products and
      user experience faster than ever,
      generating thus new revenue sources for                                   #3                    billion revenue
      Comcast.
                                                                                     for Xfinity, a Comcast offer using
                                                                                     the API
Source: How an API Can Transform Your Enterprise, RWW. Comcast annual report.

                                                                                                       faberNovel 2012 ••• 53
•••
APIs usually mix several business models




      API business models are often a mix of the various models previously explained. This
      allows API providers to cater to the needs of different API users by adapting pricing
      policies.

      For instance, the freemium business model gives free access to an API’s basic
      functions and data; to access more advanced functions and data, developers must pay
      the API provider.

                                                                               faberNovel 2012 ••• 54
2
NEW DISTRIBUTION CHANNELS
    & EXTENDED REACH
•••
APIs open up distribution channels




      At Netflix now, we have several hundred devices
      running off our API. Many publishers of various kinds
      would love to have that kind of distribution.




                                     Daniel Jacobson, Director of API Engineering at Neflix




                                                                           faberNovel 2012 ••• 56
•••
Yesterday, websites were key to reach the online population that used only
computers to browse the Web!




Data, content,
                            Website
 technology

                                                           Online population

 In the dot-com era, websites were crucial for companies to reach new customers
 and grow their businesses. However, today the online population has skyrocketed in
 size and variety of devices (computer, smartphone, tablet), making it hard for a
 single website to reach the whole online population.


                                                                      faberNovel 2012 ••• 57
•••
!today APIs allow for content, data and technology to be accessed and
used everywhere, seamlessly




                             Website

Data, content,
 technology
                               API
                                                             Online population


 APIs unlock distribution channels by allowing data, content and services to be
 accessible and usable on any device, anywhere. Thus, theoretically, all the online
 use case scenarios can be covered with an API where developers (external or
 internal) build applications for each of these scenarios.

                                                                        faberNovel 2012 ••• 58
•••
Case Study. The Netflix API, distributing digital media on every possible
device
Netflix opened up an API in October 2008 to allow for its content to be accessed
everywhere through every device.




                        API




          Today, more than 800 devices use the Netflix API
                         to stream content
                                                                       faberNovel 2012 ••• 59
3
 EXTERNALIZED R&D
FOSTERED INNOVATION
•••
Companies can foster innovation by exposing some of their resources to
others




      We are accelerating the pace of innovation at AT&T.
      The transformation that is underway here is about
      unlocking the value of our platform and delivering
      new capabilities to our customers faster than ever
      before. […] It (API) accelerates time-to-market with
      finished products, and it also increases leverage and
      reuse of assets.


              Jon Summers, AT&T’s Senior Vice President of Applications and Services Infrastructure


                                                                                 faberNovel 2012 ••• 61
•••
Before, corporate processes were designed to support long product or
service development cycles!




In a traditional company, the organization is pyramidal, communication protocols between teams are slow, validation
processes are long and the product development cycle is lengthy due to time consuming processes. Data is often used
and stored differently from one team to another, slowing things down even more when these teams have to work together.


                                                                                                     faberNovel 2012 ••• 62
•••
!but in today’s fast evolving economy, innovation has to speed up
drastically, which is what APIs allow




        Fast and efficient             Unified data uses and          Facilitated resources access
      communication protocols             storage formats                      through APIs




                            Eased team                   Thriving community of
                            collaboration                  developers around
                                                            company’s APIs




              Faster product or service development cycles
                                                                                   faberNovel 2012 ••• 63
•••
Case study. Twitter and AT&T internal APIs




      3X        faster is the product
                development cycle at AT&T
                thanks to its APIs            746   applications were
                                                    developed based on
                                                    the Twitter API




      5
              billion API calls each month,
              mostly coming from third
              party developers. A 1400%
              increase since the launch of
              the API in 2010



                                                        faberNovel 2012 ••• 64
4
PARTNERSHIP
DEVELOPMENT
•••
APIs open up possibilities for new partnerships at a low marginal cost




      There are plenty of people all over the world that
      would like to have access to our content, but we don’t
      have enough people to go and talk to all of them, […]
      this [API] helps us scale and has opened us up to a set
      of large partners we wouldn’t otherwise have had the
      time and energy to go after.



                                 Sharath Bulusu, Product Manager about The Guardian API

                                                                        faberNovel 2012 ••• 66
•••
Before, developing new partnerships was time consuming and required
consequent commercial workforce,!




Usually, to develop new partnerships, a commercial team goes prospecting for new partners
and clients. The number of partnerships achieved is limited by the size of commercial teams,
and the ability of the company to process these partnerships, and effectively set them up. This
partnering process is energy and time consuming.

                                                                               faberNovel 2012 ••• 67
•••
!but today APIs take partnerships on a large scale while maintaining low
costs




 Data, content,
                            API
  technology




By opening up business assets to other parties, APIs ease considerably partnership process.
Potential partners are able to make use of the API to design new products and services.
Commercial workforce no longer needs to have a “door-to-door” approach to finding new
partners. Instead, new partners plug-in to the company’s APIs on their own.


                                                                            faberNovel 2012 ••• 68
•••
Case Study. Xignite API, distributing financial data on a large scale




       50 financial cloud APIs
       Reference and historical data covering :
       •    Global equities                       API
       •    Commodities
       •    Currencies
       •    Fixed income
       •    Mutual funds
       •    Derivatives
       •    OTC instruments




                       Today, 900 clients in 47 countries
Source: CrunchBase
                         use Xignite financial services
                                                                  faberNovel 2012 ••• 69
5
RATIONALIZATION & CONTROL
        OVER WHO
ACCESSES YOUR RESOURCES
•••
APIs allow for monitoring and control over how a company’s resources can
be used




      We want to make sure that the Twitter experience is
      straightforward and easy to understand. […]
      Related to that, we’ve already begun to more
      thoroughly enforce our Developer Rules of the Road
      with partners, for example with branding, and in
      the coming weeks, we will be introducing stricter
      guidelines around how the Twitter API is used.


                                   Michael Sippey, VP Consumer Products at Twitter

                                                                       faberNovel 2012 ••• 71
•••
APIs allow companies to open their resources in a secure and controlled
way while bringing them closer to their customers




       Control your ecosystem                    Get feedback fast                    Secure your resources

      API providers have complete          API providers can know precisely      Identification protocol allows
      control over their API               how their resources are being         developers to access securely to
      ecosystem :                          used :                                APIs :
      •  Degree of openness of their
                                           •    Identity, number of API calls,   •     Encrypted communications.
          APIs.
                                                functionalities used, etc.
      •  Usage rules for developers.
                                           •    Instant insights on which        Security depends on what
                                                resources are most used and      resources a company decides to
      Example : Twitter recently decided
                                                thus potentially most valued     expose to third parties through an
      to strengthen its API policy to be
                                                by customers.                    API.
      sure the best experience is
      delivered to users.




                                                                                                  faberNovel 2012 ••• 72
6
ORGANIZATION FLEXIBILITY WITH
       INTERNAL API
•••
Traditionally, IT management controls the whole value chain of a company’s
data!


                          In traditional companies,
                      IT’s role can be summed up as:




                                                           Building enterprise
                 Controlling corporate data
                                                              applications


        IT systems are thus centralized, locked down, and controlled by IT teams.

        All requests for new applications or changes have to be submitted to IT, thus
        creating a funnel effect that slows down processes. This results in a rigid, costly,
        and time-consuming IT organization.


                                                                                        faberNovel 2012 ••• 74
•••
!whereas internal APIs give more flexibility and speed up internal processes


                                With internal APIs, IT’s role is reinvented




                             Define policies for data
                                                           Build and maintain APIs
                                      use


               Internal APIs grease the wheels in companies and organizations

 Updatability                     Flexibility              Scalability               Cross-department
 If changes or repairs are         Each department can      In case opening data     Departments can share
 needed in the database,           build its own            and functionalities to   data easily, and re-use
 IT can handle it without          applications with in-    partners is needed,      other departments’ data
 disrupting the                    house or third party     having internal APIs     to rapidly build their
 functioning of IT                 developers using data    speeds up partnership    own applications
 systems as long as API            and functionalities      and scaling processes.   without to resort to IT
 rules do not change               provided by the                                   management.
                                   internal APIs.

                                                                                         faberNovel 2012 ••• 75
•••
Case Study. Comcast, internal APIs speeding-up time-to-market

           Yesterday                                                 Today
  Accessing cross-division resources to              Now, thanks to internal APIs, accessing
  create new products would take months              cross-division resources takes around
  because:                                           30 minutes:

        No standardized data format                             Each department is free to use other
  #1                                                   #1
        between departments                                     departments’ resources

  #2    Different data exchange protocols                       A dozen of internal APIs have been
                                                       #2       created
        Code created for each project was
  #3    rarely reusable




            The goal is that APIs become so fundamental to how we
            operate that people don’t notice them anymore, like the
            air.
                                            Agustin Schapira, Principal Architect at Comcast




                                                                                          faberNovel 2012 ••• 76
•••
REST architecture for APIs eases resources manipulation

RESTFul is a style of software architecture that allows data exchange through
human readable URIs

REST language uses nouns and verbs, and has an emphasis on readability. It
ultimately uses less bandwidth than other language such as SOAP for instance




                                        GET              POST



                         4
      Users can manipulate
                                        Access            Create
      data through a REST
                                       a resource        a resource
                 API using




                       action verbs
                        and an URI      PUT            DELETE
                                        Update             Delete
                                       a resource        a resource




                                                                      faberNovel 2012 ••• 77
•••
Example: an internal REST API



Let’s consider an enterprise named HelloWorld

Example: if HelloWorld had an internal REST API, typing
the following command line!

get api.company.com/1/revenue/?subsidiary=paris&year=2012



      HelloWorld API version 1   Revenue of…   …subsidiary in Paris…   …in 2012



!would return HelloWorld revenue in 2012 of the Paris
subsidiary.




                                                                                  Machine & human readable
                                                                                  results: HelloWorld revenue
                                                                                      in 2012, each month
                                                                                            faberNovel 2012 ••• 78
APIs
revolutionize the
way products and
  services are
    delivered
•••
Re-imagination of movie rental

                      THEN                                          NOW




      Brick-and-mortar stores / Localized / Not    Online / Accessible on demand / Virtually
       compatible with every device / Limited     unlimited catalog / Wide reach / Accessible
            distribution / High fixed costs                      on any device




                                                                              faberNovel 2012 ••• 80
•••
Re-imagination of the newspaper industry

                         THEN                                          NOW



       Printed on paper / Limited and localized        Online / Accessible on demand / Eased
      distribution / Print costs / High distribution       partnerships / Wide reach / New
       costs / Not scalable / Limited innovation        distribution channels / Scalable / Low
                                                                   distribution costs




                                                                                 faberNovel 2012 ••• 81
•••
Re-imagination of business IT

                       THEN                                        NOW



        Internal servers / High acquisition and   Online / Pay-as-you go / No obsolescence
      maintenance costs / Obsolescence issues /     issues / Virtually unlimited computing
       Limited computing power / Not scalable     power / No maintenance costs / Scalable




                                                                            faberNovel 2012 ••• 82
•••
Re-imagination of the business of telephony

                      THEN                                         NOW



       Fixed phones / Single communication         Twilio / Cloud-based communications /
      device / Limited functionalities / Closed      Endless integration possibilities with
         communication ecosystem / High             devices / Low scalability costs / Open
                  scalability costs               communication ecosystem / Expandable
                                                                functionalities




                                                                             faberNovel 2012 ••• 83
•••
Re-imagination of enterprise ERPs

                        THEN                                         NOW



      SAP, Oracle / Expensive systems / Limited       Workday / SaaS / Always up-to-date /
       flexibility / On-premise / Low scalability /    User-centric / Flexible and scalable
                     Complicated to use




                                                                               faberNovel 2012 ••• 84
•••
Re-imagination of educational content

                        THEN                                           NOW


                                                     Khan Academy / Analytics for teachers and
       Printed on paper / Obsolescence / One            students / Interactive content / Diverse
      size fits all approach / Unique distribution   distribution modes / Embeddable with other
                  mode / Static content                       contents and functionalities




                                                                                 faberNovel 2012 ••• 85
•••
Re-imagination of fitness coaching

                        THEN                                              NOW



      Single device / Limited functionalities / Not        Myfitnesspal / Many applications
             evolutionary / Few analytics /           possibilities / Analytics / Fun / User-centric /
                                                                        Evolutionary




                                                                                     faberNovel 2012 ••• 86
•••
Re-imagination of retail product search

                      THEN                                         NOW




      Paper catalog / Not interactive / One-to-    Mobile product search / Geolocalized /
           many marketing / No analytics          Analytics / One-to-one marketing / Many
                                                  functionalities (reviews, couponing, etc.)




                                                                              faberNovel 2012 ••• 87
•••

In the 90’s you couldn’t do
without a website!
!and today you can’t do without
•••


an API
•••

What’s next for the API world
•••
In the 90’s APIs allowed programmers to develop applications for OS
•••
Today, APIs connect smartphones, computers, tablets, etc.
•••
Tomorrow, all objects will be able to exchange resources through APIs
•••

   We are faberNovel
 We help large organizations think and act like startups!
 We help our clients make the most of digital opportunities and emerging
 practices. We build on tomorrow’s challenges to deliver significant impact.
 We are designers, business analysts, and engineers.




   •••
   We work ideas into successful projects.
   We make innovation happen.

         facebook.com/faberNovel                             @faberNovel                          www.fabernovel.com
!!!!!!!!!!!!!!!!!!!!!!!"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!""#
!!!!!!!!!!!!!!!!!!!!!!!"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!""#
                                                                                                           faberNovel 2012 ••• 94
Stéphane Distinguin                                   Adrien Delepelaire
   Founder & CEO                                         Junior Project Manager
   @fano

   Cyril Vart                                            Mathilde Brès
   Partner & VP Strategy                                 Business Development Manager
   @cyrilvart                                            @mahautbres

   Aurélien Fache
   Senior Software Engineer
   @mathemagie


    Design Team

   Benoit Talabot                                        Jules Mahé
   Partner & Art Director                                Junior Art Director
   @bybent                                               @julesmahe




!!!!!!!!!!!!!!!!!!!!!!!"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!""#
!!!!!!!!!!!!!!!!!!!!!!!"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!""#
                                                                                                           faberNovel 2012 ••• 95
Paris                          San Francisco
……………………………..…………   17 rue du Faubourg du Temple   169 11th street

Contact             75010 Paris
                    +33 1 42 72 20 04
                                                   San Francisco CA 91 103, USA
                                                   +1415 626 6406
……………………………..…………   meet_paris@fabernovel.com      meet_sf@fabernovel.com

                    New York                       Moscow
                    412 Broadway, Floor 2,         3-iy Monetchikovskiy Peureulok
                    NY 10013                       17, Stroenie 2 Moscow 11054
                    +1415 298 0209                 +7 (999) 639 80 82
                    meet_nyc@fabernovel.com        meet_moscow@fabernovel.com




                                                                   faberNovel 2012 ••• 96

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6 Reasons Why APIs Are Reshaping Your Business

  • 2. ••• Acknowledgements We would like to thank our partners for their help in making this study Mehdi Medjaoui Co-founder & COO at Webshell Pierre-Antoine Durgeat Founder & Partner at Novacodex faberNovel 2012 ••• 2
  • 3. ••• 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, 6 Reasons Why APIs Are Reshaping Your Business, November 2012. You may not use this work for commercial purposes. You may distribute a modified work under the same or similar license. Why do we release this kind of work for free? Our job is to help big organizations think and act like startups. And we believe that 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 or successful companies like Apple, Amazon, Facebook! or the business value of APIs. !!!!!!!!!!!!!!!!!!!!!!!"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!""# !!!!!!!!!!!!!!!!!!!!!!!"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!""# faberNovel 2012 ••• 3
  • 5. ••• 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. Source: Wikipédia faberNovel 2012 ••• 5
  • 6. ••• In other words, APIs are like male and female plugs allowing software to share data and functionalities. Input Processing Output API Provider Program Consumer Program faberNovel 2012 ••• 6
  • 7. ••• An analogy: The evolution of the car industry follows the logic of APIs Yesterday Today Carmaker = craftsman Carmaker = system integrator Tailor made Car divided into subsystems (powertrain, Custom design for each element of the car brakes, steering, suspension, etc.) (wheels, seats, brakes, lights, roof, etc.) Main elements designed separately and Restricted modularity reused in different cars No standardized processes Standardized processes Communication interfaces between different engineering teams Source: 3Scale, What is an API? faberNovel 2012 ••• 7
  • 8. ••• So, what is an API ? API interface API provider Just like a car which consists of several !an API is a software brick that allows someone subsystems designed by different to share data, content and functionalities with specialized teams (internal or partners) who others, for them to build new services based on communicate with each other all throughout this data, content and functionalities (i.e. using one the design process! or several bricks). The services built can use one or several APIs from the same or different API providers. faberNovel 2012 ••• 8
  • 9. ••• The Facebook Like button uses an API to dominate social recommendation Before 2010: no Like API After 2010: a Like API API The Like button was at first intended to be used only By embedding a line of code in their website, on Facebook to like photos, status, comments and fan now anyone can benefit from the Like button pages. functionality and enable their visitors to Like any content while browsing. faberNovel 2012 ••• 9
  • 10. ••• There are three main types of API Private Partner Public Private APIs are used internally Partner APIs are used to Public APIs allow companies to to facilitate the integration of facilitate communication and publicly expose information different applications and integration of software between and functionalities of one or systems used by a company. a company and its business various systems and partners applications to third parties that Advantages: do not necessarily have a •  Rationalized infrastructure Advantages: business relationship with them. •  Reduced costs •  Value-added service •  Increased flexibility •  Up sell Advantages: •  Improved internal operations •  Must have for business •  Delegated R&D partners •  Increased reach, traffic •  New revenue stream Source: 3Scale, The rise of the APIs faberNovel 2012 ••• 10
  • 11. ••• Historically, APIs were used by big software companies but their usage is becoming more democratic today Application Services APIs •  Build new functionalities •  Trouble-free Web services APIs interoperability •  Share data or services internally •  Accessible to big and externally companies •  More unified communication protocol •  Accessible to any company •  Easy integration APIs for operating systems •  Create application for OS •  Attract developers •  Enlarge customer base Infrastructure services APIs •  Limited to big software •  Allows companies to externalize companies IT infrastructures •  Access to computing power •  Available to anyone 1985 - 2001 1990s 2002 2006 Source: 3Scale, What is an API? faberNovel 2012 ••• 11
  • 12. ••• Today, API growth is skyrocketing! Number of public APIs listed on ProgrammableWeb Source: ProgrammableWeb faberNovel 2012 ••• 12
  • 13. ••• !however, most APIs are private and thus invisible to the public 8014 APIs Public APIs Private APIs faberNovel 2012 ••• 13
  • 14. ••• APIs mean a lot of exposure for web giants! 13 billion API calls / day 5 billion API calls / day 5 billion API calls / day 1,4 1,1 billion API calls / day billion API calls / day 1 billion API calls / day Source: Open APIs, What’s Hot What’s Not, John Musser faberNovel 2012 ••• 14
  • 15. ••• !and also significant revenue = $2 billion/year 90% of what we do is business through APIs John Watton, Expedia Affiliate Network, Travolution.co.uk, April 2012 Source: John Musser, Open APIs, What’s Hot What’s Not faberNovel 2012 ••• 15
  • 16. ••• API revolutionized a century old industry: the Canadian Yellow Pages! Yellow Pages database API Yellow Pages book Before, The Yellow Pages were delivered Today, The Yellow Pages data can be as a paper directory. Users had to flip accessed via an API, allowing it to be present pages to find relevant information. The on any device (PC, smartphone, tablets, etc.) content was not mobile, you had to have a and associated with search, location-based Yellow Pages book at hand to find what services and other functionalities. you were looking for. faberNovel 2012 ••• 16
  • 17. ••• !and is expanding its reach to many industries Internet Social Tools Mapping Shopping Telephony Finance Enterprise Music Photos Videos Messaging faberNovel 2012 ••• 17
  • 18. ••• Did you know? APIs can also be used to do unexpected things Generates full report of available Users pass CAPTCHAs through the The FullerData Fortune Cookie API information about a specific vehicle API where they are solved by an randomly generates a message (a based on its vehicle identification OCR or manually. Average solved fortune). There are a total of 882 number. response time of 15 seconds, and fortunes available. average accuracy rate of 90%. The KBS API provides users with Who’s Hurt is an injury reporting The MyFitnessPal API allows programmatic access to the KBS's service for professional sports developers to access and integrate the Korean translation of the Bible. leagues, including football, baseball, functionality of MyFitnessPal (tracking basketball, hockey, and soccer food and exercise) to create new leagues. applications. Source: ProgrammableWeb faberNovel 2012 ••• 18
  • 20. ••• APIs, an innovative and efficient model allowing companies to manage their core business activities only TRADITIONAL COMPANY API-DRIVEN COMPANY Core Finance business HR R&D HR Finance R&D vs. IT Core business Marketing IT Logistics Marketing Logistics In a traditional company, all functions In an API-driven company, support are internalized to support the core functions are externalized via an API, business focus is on the core business faberNovel 2012 ••• 20
  • 22. ••• Case Study 1. Salesforce, CRM in Platform-as-a-Service mode 1 2 3 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. faberNovel 2012 ••• 22
  • 23. ••• Case Study 1. What would it cost if there were no APIs? 1 2 3 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 3 meeting/day assume 200 days/year = that: Salesperson 50 000$/year 1 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 faberNovel 2012 ••• 23
  • 24. ••• Case Study 1. Salesforce API eases IT services integration 1 2 3 Thanks to its API, Salesforce can easily integrate with: Applications Web services faberNovel 2012 ••• 24
  • 26. ••• Case Study 2. Expedia, marketing through APIs 1 2 3 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 $2 billion revenue per year, 90% of which comes from its API. Source: RWW, How an API Can Transform Your Enterprise faberNovel 2012 ••• 26
  • 27. ••• Case Study 2. Room 77, a hotel search website using 1 2 3 the Expedia API Room 77 is a hotel reservations aggregator Users perform a hotel reservation search. Several options are suggested; they all redirect to the matching hotel booking partner websites. Links redirecting to Expedia website faberNovel 2012 ••• 27
  • 28. ••• Case Study 2. Eased partnership for Expedia and its affiliates 1 2 3 Drives more traffic Generates new New distribution to Expedia revenues sources channels Thanks to its API, Expedia affiliates do the partnership and marketing work for Expedia at a low marginal cost for Expedia. faberNovel 2012 ••• 28
  • 30. ••• Case Study 3. Netflix, distribution on a large scale thanks 1 2 3 to APIs Netflix offers subscription to In October 2008, Netflix opened an API to unlimited streaming movie and allow developers to use its resources: TV shows •  Movie database •  Queue management •  Rental history •  ! The API is free and allows for commercial30use faberNovel 2012 •••
  • 31. ••• Case Study 3. Many use case scenarios are built on the 1 2 3 Netflix API 800+ devices can stream Netflix content 20 000 developers use the Netflix API Source: Redesigning the Netflix API, Daniel Jacobson faberNovel 2012 ••• 31
  • 32. ••• Case Study 3. What would it cost if there were no APIs? 1 2 3 If Netflix did not have an API, it could not have developed thousands of applications for hundreds of devices on its own. What would it cost if Netflix developed these apps themselves? Let’s assume that: = 50 000$/year Developer 20 000 developers use Netflix API Having these developers in-house would cost Netflix: $1 billion/year Netflix allows third party developers to build applications for all sorts of devices, thus catering to many needs without involving high development costs faberNovel 2012 ••• 32
  • 34. ••• Case Study 4. Facebook Connect API, partnership on a 1 2 3 worldwide scale Facebook Connect allows users to log-in on any websites or application using their Facebook information. Third party developers can add a “Connect with Facebook” button by using Facebook Connect APIs. Facebook Connect API has standardized credentials on the web, creating a universal ID faberNovel 2012 ••• 34
  • 35. ••• Case Study 4. What would it cost if there were no APIs? 1 2 3 If Facebook did not have APIs, it could not let third party developers onboard themselves to use Facebook Connect API, and would thus have to do partnership work. What would it cost if Facebook did partnership work? Let’s 10 phone meetings/day assume that: 200 days/year = 50 000$/year 2000 phone Salesperson 1 salesperson meetings/year 7 million websites and apps use Facebook Connect To reach that partners target in 3 years Facebook would need around: 1100 salespersons = $55 million Facebook let partners onboard themselves in its ecosystem through its API, and thus built partnerships on a worldwide scale while maintaining low costs faberNovel 2012 ••• 35
  • 36. ••• Case Study 4. Facebook Connect enriches its Social Graph 1 2 3 Facebook Connect is embedded in iOS 6… …and in Instagram Connect with Facebook to apps like Safari, Photos, Camera, Maps, Game Center, etc. Post pictures directly to Facebook Synchronize contact info, events and birthdays your friends have shared with you on Facebook Chat in a native Facebook interface Like songs, albums and apps directly from iTunes and the App Store faberNovel 2012 ••• 36
  • 38. ••• Case Study 5. Fitbit API, externalizing R&D 1 2 3 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. faberNovel 2012 ••• 38
  • 39. ••• Case Study 5. Thriving innovation based on the Fitbit API 1 2 3 20 apps were built on the Fitbit API creating innovative uses of fitness and health data faberNovel 2012 ••• 39
  • 40. ••• Example: MapMyRun MapMyRun uses FitBit health data to provide joggers with statistics such as calories burned, heartbeat, speed, altitude faberNovel 2012 ••• 40
  • 41. ••• Case Study 5. What would it cost if there were no APIs? 1 2 3 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. faberNovel 2012 ••• 41
  • 42. Business value is moving towards data and its associated uses
  • 44. ••• APIs allow companies to effectively pursue the classical triptych of business goals #1 #2 #3 Business Product Supply Chain Development Development Management faberNovel 2012 ••• 44
  • 45. ••• !by giving access to what they do best and accessing what others do best Thanks to APIs, companies can benefit from other companies’ core business to support their own business. = + WOOZOR, online meteo High quality maps High quality weather data When opening up data through an API (whether it is private, partner or public), the API provider does the partnership work once, partners then need only onboard themselves and use their own resources as often as they like for marginal additional cost to the provider. An API provider creates the infrastructure and then each partner does the technical, business and legal work on their end. Source: Dion Hinchcliffe, Open APIs Mature Into a Next-Generation Business Model faberNovel 2012 ••• 45
  • 46. ••• APIs are becoming more flexible allowing companies to add functionalities like LEGO blocks and grow core business activities APIs give business the ability to completely customize their strategy by choosing which function they want to outsource via an API and which functions they want to keep internally. It is like picking different LEGO blocks to build a tailored toy house. faberNovel 2012 ••• 46
  • 47. ••• An API is more than the sum of its parts, it combines many advantages New business model New distribution channels Externalized R&D and revenue streams and extended reach and fostered innovation Rationalization and control over Organization flexibility Partnership development who accesses your resources with internal APIs faberNovel 2012 ••• 47
  • 48. 1 NEW BUSINESS MODELS & REVENUE STREAMS
  • 49. ••• An API represents a shift in traditional business models Free User pays User gets paid Indirect Any developer who API providers get paid API providers share API providers receive signs up can access for the use of their revenue with users indirect revenue from the API and use its APIs. Different for leads they bring to the use of their APIs. functionalities. This is revenue models exist. their website. Salesforce for instance the model used by the sell its API as a SaaS. Facebook Like API. Variant: Variant: •  Pay as you go •  Revenue share Variant: •  Tiered •  Affiliation •  Content •  Freemium acquisition •  Unit-based •  SaaS •  Transaction fee •  Content syndication •  Internal use Source: John Musser, ProgrammableWeb.com faberNovel 2012 ••• 49
  • 50. ••• Business model 1. Free Case Study Key figures #1 2,7 billion of Likes/day The Facebook Like API is free to use. Anyone can embed a Like button on #2 2,5 million websites use their page. the Like button This allowed Facebook to spread the Like button very rapidly everywhere +1,000 on the web, to enrich the Facebook Social Graph, to be present everywhere on the web, and to #3 position themselves as dominant in social recommendation. websites adding the Like button/ day faberNovel 2012 ••• 50
  • 51. ••• Business model 2. User pays Case Study Key figures #1 905 billion objects stored in AWS Amazon Web Services (AWS) offer a wide variety of services (storage, #2 $750 million database, computing power, servers, revenue in 2011 application services, deployment & management) accessible through a set of APIs. Each of these services is charged following use pricing. #3 $1 million savings for NASA after moving IT into AWS Source: Statista. NASA sees $1 millions savings in moving to cloud, FierceCIO faberNovel 2012 ••• 51
  • 52. ••• Business model 3. User gets paid Case Study Key figures #1 $9,71 billion of revenue in 2011 for Google The Google Adsense API allows publishers to automatically serve text, #2 28% of Google’s image, video, and rich media on Google’s revenue network websites, targeted following content and audience. These adverts are administered, sorted, and maintained by Google, and they can generate revenue on either a per-click or per-impression basis. Google splits revenue with publishers who display their ads. Source: Google AdSense Facts faberNovel 2012 ••• 52
  • 53. ••• Business model 4. Indirect Case Study Key figures #1 30 minutes to share resources through internal API compared to months in the past Comcast, America’s largest TV, media, entertainment and cable provider created #2 x100 increase in the an internal API for teams to easily share API traffic last year data and solutions. The API is free for use by internal teams. $8,5 Today, teams can build new products and user experience faster than ever, generating thus new revenue sources for #3 billion revenue Comcast. for Xfinity, a Comcast offer using the API Source: How an API Can Transform Your Enterprise, RWW. Comcast annual report. faberNovel 2012 ••• 53
  • 54. ••• APIs usually mix several business models API business models are often a mix of the various models previously explained. This allows API providers to cater to the needs of different API users by adapting pricing policies. For instance, the freemium business model gives free access to an API’s basic functions and data; to access more advanced functions and data, developers must pay the API provider. faberNovel 2012 ••• 54
  • 55. 2 NEW DISTRIBUTION CHANNELS & EXTENDED REACH
  • 56. ••• APIs open up distribution channels At Netflix now, we have several hundred devices running off our API. Many publishers of various kinds would love to have that kind of distribution. Daniel Jacobson, Director of API Engineering at Neflix faberNovel 2012 ••• 56
  • 57. ••• Yesterday, websites were key to reach the online population that used only computers to browse the Web! Data, content, Website technology Online population In the dot-com era, websites were crucial for companies to reach new customers and grow their businesses. However, today the online population has skyrocketed in size and variety of devices (computer, smartphone, tablet), making it hard for a single website to reach the whole online population. faberNovel 2012 ••• 57
  • 58. ••• !today APIs allow for content, data and technology to be accessed and used everywhere, seamlessly Website Data, content, technology API Online population APIs unlock distribution channels by allowing data, content and services to be accessible and usable on any device, anywhere. Thus, theoretically, all the online use case scenarios can be covered with an API where developers (external or internal) build applications for each of these scenarios. faberNovel 2012 ••• 58
  • 59. ••• Case Study. The Netflix API, distributing digital media on every possible device Netflix opened up an API in October 2008 to allow for its content to be accessed everywhere through every device. API Today, more than 800 devices use the Netflix API to stream content faberNovel 2012 ••• 59
  • 61. ••• Companies can foster innovation by exposing some of their resources to others We are accelerating the pace of innovation at AT&T. The transformation that is underway here is about unlocking the value of our platform and delivering new capabilities to our customers faster than ever before. […] It (API) accelerates time-to-market with finished products, and it also increases leverage and reuse of assets. Jon Summers, AT&T’s Senior Vice President of Applications and Services Infrastructure faberNovel 2012 ••• 61
  • 62. ••• Before, corporate processes were designed to support long product or service development cycles! In a traditional company, the organization is pyramidal, communication protocols between teams are slow, validation processes are long and the product development cycle is lengthy due to time consuming processes. Data is often used and stored differently from one team to another, slowing things down even more when these teams have to work together. faberNovel 2012 ••• 62
  • 63. ••• !but in today’s fast evolving economy, innovation has to speed up drastically, which is what APIs allow Fast and efficient Unified data uses and Facilitated resources access communication protocols storage formats through APIs Eased team Thriving community of collaboration developers around company’s APIs Faster product or service development cycles faberNovel 2012 ••• 63
  • 64. ••• Case study. Twitter and AT&T internal APIs 3X faster is the product development cycle at AT&T thanks to its APIs 746 applications were developed based on the Twitter API 5 billion API calls each month, mostly coming from third party developers. A 1400% increase since the launch of the API in 2010 faberNovel 2012 ••• 64
  • 66. ••• APIs open up possibilities for new partnerships at a low marginal cost There are plenty of people all over the world that would like to have access to our content, but we don’t have enough people to go and talk to all of them, […] this [API] helps us scale and has opened us up to a set of large partners we wouldn’t otherwise have had the time and energy to go after. Sharath Bulusu, Product Manager about The Guardian API faberNovel 2012 ••• 66
  • 67. ••• Before, developing new partnerships was time consuming and required consequent commercial workforce,! Usually, to develop new partnerships, a commercial team goes prospecting for new partners and clients. The number of partnerships achieved is limited by the size of commercial teams, and the ability of the company to process these partnerships, and effectively set them up. This partnering process is energy and time consuming. faberNovel 2012 ••• 67
  • 68. ••• !but today APIs take partnerships on a large scale while maintaining low costs Data, content, API technology By opening up business assets to other parties, APIs ease considerably partnership process. Potential partners are able to make use of the API to design new products and services. Commercial workforce no longer needs to have a “door-to-door” approach to finding new partners. Instead, new partners plug-in to the company’s APIs on their own. faberNovel 2012 ••• 68
  • 69. ••• Case Study. Xignite API, distributing financial data on a large scale 50 financial cloud APIs Reference and historical data covering : •  Global equities API •  Commodities •  Currencies •  Fixed income •  Mutual funds •  Derivatives •  OTC instruments Today, 900 clients in 47 countries Source: CrunchBase use Xignite financial services faberNovel 2012 ••• 69
  • 70. 5 RATIONALIZATION & CONTROL OVER WHO ACCESSES YOUR RESOURCES
  • 71. ••• APIs allow for monitoring and control over how a company’s resources can be used We want to make sure that the Twitter experience is straightforward and easy to understand. […] Related to that, we’ve already begun to more thoroughly enforce our Developer Rules of the Road with partners, for example with branding, and in the coming weeks, we will be introducing stricter guidelines around how the Twitter API is used. Michael Sippey, VP Consumer Products at Twitter faberNovel 2012 ••• 71
  • 72. ••• APIs allow companies to open their resources in a secure and controlled way while bringing them closer to their customers Control your ecosystem Get feedback fast Secure your resources API providers have complete API providers can know precisely Identification protocol allows control over their API how their resources are being developers to access securely to ecosystem : used : APIs : •  Degree of openness of their •  Identity, number of API calls, •  Encrypted communications. APIs. functionalities used, etc. •  Usage rules for developers. •  Instant insights on which Security depends on what resources are most used and resources a company decides to Example : Twitter recently decided thus potentially most valued expose to third parties through an to strengthen its API policy to be by customers. API. sure the best experience is delivered to users. faberNovel 2012 ••• 72
  • 74. ••• Traditionally, IT management controls the whole value chain of a company’s data! In traditional companies, IT’s role can be summed up as: Building enterprise Controlling corporate data applications IT systems are thus centralized, locked down, and controlled by IT teams. All requests for new applications or changes have to be submitted to IT, thus creating a funnel effect that slows down processes. This results in a rigid, costly, and time-consuming IT organization. faberNovel 2012 ••• 74
  • 75. ••• !whereas internal APIs give more flexibility and speed up internal processes With internal APIs, IT’s role is reinvented Define policies for data Build and maintain APIs use Internal APIs grease the wheels in companies and organizations Updatability Flexibility Scalability Cross-department If changes or repairs are Each department can In case opening data Departments can share needed in the database, build its own and functionalities to data easily, and re-use IT can handle it without applications with in- partners is needed, other departments’ data disrupting the house or third party having internal APIs to rapidly build their functioning of IT developers using data speeds up partnership own applications systems as long as API and functionalities and scaling processes. without to resort to IT rules do not change provided by the management. internal APIs. faberNovel 2012 ••• 75
  • 76. ••• Case Study. Comcast, internal APIs speeding-up time-to-market Yesterday Today Accessing cross-division resources to Now, thanks to internal APIs, accessing create new products would take months cross-division resources takes around because: 30 minutes: No standardized data format Each department is free to use other #1 #1 between departments departments’ resources #2 Different data exchange protocols A dozen of internal APIs have been #2 created Code created for each project was #3 rarely reusable The goal is that APIs become so fundamental to how we operate that people don’t notice them anymore, like the air. Agustin Schapira, Principal Architect at Comcast faberNovel 2012 ••• 76
  • 77. ••• REST architecture for APIs eases resources manipulation RESTFul is a style of software architecture that allows data exchange through human readable URIs REST language uses nouns and verbs, and has an emphasis on readability. It ultimately uses less bandwidth than other language such as SOAP for instance GET POST 4 Users can manipulate Access Create data through a REST a resource a resource API using action verbs and an URI PUT DELETE Update Delete a resource a resource faberNovel 2012 ••• 77
  • 78. ••• Example: an internal REST API Let’s consider an enterprise named HelloWorld Example: if HelloWorld had an internal REST API, typing the following command line! get api.company.com/1/revenue/?subsidiary=paris&year=2012 HelloWorld API version 1 Revenue of… …subsidiary in Paris… …in 2012 !would return HelloWorld revenue in 2012 of the Paris subsidiary. Machine & human readable results: HelloWorld revenue in 2012, each month faberNovel 2012 ••• 78
  • 79. APIs revolutionize the way products and services are delivered
  • 80. ••• Re-imagination of movie rental THEN NOW Brick-and-mortar stores / Localized / Not Online / Accessible on demand / Virtually compatible with every device / Limited unlimited catalog / Wide reach / Accessible distribution / High fixed costs on any device faberNovel 2012 ••• 80
  • 81. ••• Re-imagination of the newspaper industry THEN NOW Printed on paper / Limited and localized Online / Accessible on demand / Eased distribution / Print costs / High distribution partnerships / Wide reach / New costs / Not scalable / Limited innovation distribution channels / Scalable / Low distribution costs faberNovel 2012 ••• 81
  • 82. ••• Re-imagination of business IT THEN NOW Internal servers / High acquisition and Online / Pay-as-you go / No obsolescence maintenance costs / Obsolescence issues / issues / Virtually unlimited computing Limited computing power / Not scalable power / No maintenance costs / Scalable faberNovel 2012 ••• 82
  • 83. ••• Re-imagination of the business of telephony THEN NOW Fixed phones / Single communication Twilio / Cloud-based communications / device / Limited functionalities / Closed Endless integration possibilities with communication ecosystem / High devices / Low scalability costs / Open scalability costs communication ecosystem / Expandable functionalities faberNovel 2012 ••• 83
  • 84. ••• Re-imagination of enterprise ERPs THEN NOW SAP, Oracle / Expensive systems / Limited Workday / SaaS / Always up-to-date / flexibility / On-premise / Low scalability / User-centric / Flexible and scalable Complicated to use faberNovel 2012 ••• 84
  • 85. ••• Re-imagination of educational content THEN NOW Khan Academy / Analytics for teachers and Printed on paper / Obsolescence / One students / Interactive content / Diverse size fits all approach / Unique distribution distribution modes / Embeddable with other mode / Static content contents and functionalities faberNovel 2012 ••• 85
  • 86. ••• Re-imagination of fitness coaching THEN NOW Single device / Limited functionalities / Not Myfitnesspal / Many applications evolutionary / Few analytics / possibilities / Analytics / Fun / User-centric / Evolutionary faberNovel 2012 ••• 86
  • 87. ••• Re-imagination of retail product search THEN NOW Paper catalog / Not interactive / One-to- Mobile product search / Geolocalized / many marketing / No analytics Analytics / One-to-one marketing / Many functionalities (reviews, couponing, etc.) faberNovel 2012 ••• 87
  • 88. ••• In the 90’s you couldn’t do without a website!
  • 89. !and today you can’t do without ••• an API
  • 91. ••• In the 90’s APIs allowed programmers to develop applications for OS
  • 92. ••• Today, APIs connect smartphones, computers, tablets, etc.
  • 93. ••• Tomorrow, all objects will be able to exchange resources through APIs
  • 94. ••• We are faberNovel We help large organizations think and act like startups! We help our clients make the most of digital opportunities and emerging practices. We build on tomorrow’s challenges to deliver significant impact. We are designers, business analysts, and engineers. ••• We work ideas into successful projects. We make innovation happen. facebook.com/faberNovel @faberNovel www.fabernovel.com !!!!!!!!!!!!!!!!!!!!!!!"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!""# !!!!!!!!!!!!!!!!!!!!!!!"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!""# faberNovel 2012 ••• 94
  • 95. Stéphane Distinguin Adrien Delepelaire Founder & CEO Junior Project Manager @fano Cyril Vart Mathilde Brès Partner & VP Strategy Business Development Manager @cyrilvart @mahautbres Aurélien Fache Senior Software Engineer @mathemagie Design Team Benoit Talabot Jules Mahé Partner & Art Director Junior Art Director @bybent @julesmahe !!!!!!!!!!!!!!!!!!!!!!!"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!""# !!!!!!!!!!!!!!!!!!!!!!!"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!""# faberNovel 2012 ••• 95
  • 96. Paris San Francisco ……………………………..………… 17 rue du Faubourg du Temple 169 11th street Contact 75010 Paris +33 1 42 72 20 04 San Francisco CA 91 103, USA +1415 626 6406 ……………………………..………… meet_paris@fabernovel.com meet_sf@fabernovel.com New York Moscow 412 Broadway, Floor 2, 3-iy Monetchikovskiy Peureulok NY 10013 17, Stroenie 2 Moscow 11054 +1415 298 0209 +7 (999) 639 80 82 meet_nyc@fabernovel.com meet_moscow@fabernovel.com faberNovel 2012 ••• 96