1. APIs
BUILDING BLOCKS OF THE FUTURE
1
November 2013

2. 2013
2025
2

3. How do they do that?
You may wonder how Apple’s Siri or Google Now works its magic behind
the scenes. It’s more than the voice recognition—although that’s actually
not too shabby. Somehow, it’s able to take action for you across your day:
adding events to calendars, calling people, sending messages, knowing
where traffic is and how to avoid it, and answering cryptic queries for
information. And they keep getting better, and adding more services
rapidly. How do they make that easy?
Or, you may notice your customers using Mint to visualize their financial
data, and betterment.com to track progress towards goals—how do they
work together? How does someone sign into one site using a completely
other site like Facebook? How do I post an Instagram photo of the Spicy
Basil Chicken dish from my Foursquare login to my Facebook timeline?
How does an ad for Burberry I see on my weather app know it’s raining
where I am?
Maybe your neighbor suddenly got a site built in a weekend for his nonprofit, and it collects user accounts, has newsletters, and makes money
from purchases of books from Amazon. How did that happen? Does he
have 20 developers in his basement?
The answer—in an acronym—is APIs1. Driven by a need to access and
integrate data stored in the cloud, by startups building cloud-services and
by the need to build mobile apps, people are rapidly adding APIs to their
applications and making them available publically. APIs allow developers
to build on your data and services, and in turn allow others to build on
theirs. Other platforms aggregate this functionality into even more useful
services, just as you can aggregate theirs. Businesses with APIs are
suddenly connected with and adding value on top of other businesses,
and serving their customers in new and interesting ways. Or, like Amazon,
seeing an entire new revenue stream emerge.
So, what’s an API?
1
Which is a TLA for “Application Programming Interface”
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4. What’s an API?
Simply, APIs are ways of allowing different digital services
to connect and share information with each other. They
are ways to connect pieces of software together—either
a new user experience to backend services, or backend
services together to a workflow.
It’s closely related to, and is a bit of an outgrowth of, the
IT strategy of “service oriented architectures”, which tried
to reduce duplication and increase ROI by combining
common enterprise functionality into single services. In
contrast, web APIs are generally available to the broad
public or to registered developers or partners. Web
APIs also have very different technical requirements—in
particular, security and scale are much more a concern for
public APIs.
In the lingo, you “call” an API, and the API does something
and, usually, returns data. The following graphic visualizes
that action behind the scenes of a movie ticket purchasing
app. The person who provides the API function is said
to “publish” an API, and is an API “provider”. You can
find descriptions of available APIs in “registries” like
ProgrammableWeb.com or Khronos.
The rapid pace of innovation in startups, funded by ready
capital, is being lead by designer and developers, and the
lingua franca of developers is APIs.
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5. Movie Info API
Enter relevant
search query
Movie Ticket App
Search
Movie name
Times
Theater locations
Buy Now
Movie name
Times
Theater locations
Buy Now
Name
Credit Card Info
Password
Submit user
payment data
Payment Confirmed! Thank you!
Return payment
confirmation
Payment API
5
Transmit the
requested data

6. APIs are revolutionizing the web
revolution.
The rise of available APIs has coincided with the rise of a
tremendous number of single-purpose mobile apps, or new
financial tools. Right now we are seeing a great unbundling of
customer service into a set of apps and websites, spread across
a customer journey. Where banking customers used to interact
with one—maybe two—web applications to manage their money
and investments, there is now a wide variety of apps they use
daily—like Mint.com, betterment.com, or Nutmeg, and trading
apps. You can use APIs to participate fully in this ecosystem,
share data, and integrate partners.
You can gain efficiencies, and still create great experiences, by
taking advantage of other services your users already use, or to
find out more about the user from partner services. You can also
use APIs to write functionality once, and use it in your mobile
web, your mobile app, and your website so the user gets a
consistent experience.
To take credit card payments on your website, you use a API to
call a processing vendor, and get back whether the transaction
suceeded. To sign in with Facebook on your app, you use a set
of APIs to ask Facebook if this person exists, and you get back
confirmation. You can use Google Map APIs to display your store
locations, and even give directions.
Better, you can start adding value to your digital experiences
based on data you can learn about your user in real-time. You
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7. can use Facebook APIs to find their friends that have liked your
content. You can use an Akamai API call to see where your site visitor
is, and then Weather.com API to find out if it’s hot where they are,
and then adjust your website content or product recommendations
accordingly.
If you have a mobile app that uses data or content from your existing
CMS systems, you’re probably using APIs already to call back to your
home systems for information.
More interestingly, people are storing data from connected objects—
like Fitbits or Nike Fuelbands—in the cloud, where the data can be
made widely available. With the right permission from your user, you
can connect to that data, and change how your user experiences your
brand.
Also, with the right strategy, data, and technical planning, you might
be able to provide valuable data and features through APIs yourself.
You can make your unique functions available to partners, startups and
even other groups in your own company. In addition to making your
offering more accessible across emerging devices and platforms, you
might be able to consider APIs as yet another channel for commerce
and brand growth.
APIs are the building blocks for a very interesting, flexible future. Let’s
see how you can use—and provide—them.
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8. NUMBER OF APIS FROM 2005 TO 2013
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2005
2006
2007
2008
2009
2010
2011
http://blog.programmableweb.com/2013/04/30/9000-apis-mobile-gets-serious/
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2012
2013

9. Yay Developers, But So What?
This is great for developers, but how does this affect your
business? In a nutshell, in two big ways—making what you do
easier and making your customers use you everywhere. It’s the
way you can build partnerships with other apps your clients are
already using. It’s how you can own transactions and features
that developers will use to build the next great app.
“Customers are going to have a wide choice, and
we’re not sitting back and watching that landscape—
hence, our API platform.”
Skip Potter, Senior DIrector of CapitalOne Labs
At the end of the day, there are two ways you can embrace APIs
—as a consumer, and as a provider. It’s worth cataloging what
features and functions you’re providing now, and seeing if there
are internal or external services you can leverage into an API
instead of writing new systems yourself.
Let’s look at the reasons for leveraging external APIs more
heavily for your experience architecture.
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10. Consuming APIs
First, you’re probably using a bunch of external
APIs already on your website—like Facebook
Connect and Graph, posting things to Instagram
or Twitter, or using a prefab widget for social
sharing. But there’s a world of emerging API
providers that you might not be aware of. What
do you gain by keeping on top of this market,
and using external providers?
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11. FOCUS
First, by leveraging external API providers and cloud based platforms, you gain focus. You
no longer have to worry as much about developing custom features or spending time in
complex system integration projects. You can spend more time and energy focused on
developing rich, amazing experiences, and less building custom backends.
CONNECTION
Your customers are already using a growing set of mobile apps and websites to handle
bits of their lives. By leveraging external platform APIs, you can connect to customers
where they are, and use the data they are already sharing with their friends to drive
better experiences – and reach their network as well.
INNOVATION
You probably can’t invest in building a high-volume SMS platform to provide extra security.
Luckily, Twilio has already done it for you. You may have some crazy engagement idea that
requires new technologies for your corporation – most likely, there’s a startup out there
with an API. The more you can leverage external APIs, the broader your canvas becomes
for providing amazing experiences and services to your customer.
AGILITY
Along with innovation comes marketing agility. You can find new capabilities and build
partnerships with critical components and features – all faster than you could recreate that wheel
that they’ve already created, marketed, and are in dire competition to provide the best of.
NEW CONCERNS
It’s not all roses, to be sure. Any startup you build an experience around might, themselves,
pivot to something not so useful to you. They may run out of funding. They might get
purchased – or get a significant investment – by a competitor, or someone completely
orthogonal to your business.
Sometimes, startup APIs don’t exactly work (or scale) as advertised. Or, like in the case of
Twitter, the APIs and protocols change when they want, rather than when you need.
The key is to pick and choose which APIs to keep internal, and which to push off. The good
news is that the range of APIs to keep internal shrinks to the ones that make you awesome
and unique, and the commodity ones can get pushed outside to someone else who
specializes in deliver that service at high quality.
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12. Providing APIs
More challenging, but potentially more powerful and profitable, is
becoming a provider of APIs.
You’ll need to pick and choose where you think you can add value to
the world of APIs and developers. If you just have a simple website
with a contact us form, there’s probably not a whole lot of value in
opening your infrastructure and data to the outside. But if you’re
providing a value-creating service to your users—recipes, calorie
tracking, financial services and transactions, loan comparisons—
adding an API might prove extraordinarily valuable.
You don’t have to provide unlimited data and features for free. You
can structure your API offering to be rate-limited, to charge per call,
or as an intro device (use a lot, get a call from your sales team). A
good strategy would consider all your options against the cost of
providing the service.
Here are a few reasons how this can pay off for you.
INNOVATION
Third-party developers could help raise the value of your data by combining it with other
sources of data (e.g. a mashup combining a map API and an ATM locations API). You
can unlock the creativity of the crowds, who may come up with something unexpected
and delightful. It’s a reasonably low-cost way to do experiments and offload risk to the
development communities. If something amazing comes up.
Startup Indeed initially offered online publishers the ability to pay for a real time search API
of online jobs. Not many took them up on that offer. But when they injected their sponsored
jobs into the API and offered to share the revenue with publishers, the demand was huge.
“This is all about the customers. We allow developers
to integrate Netflix service into apps with full control
over the user experience. So we are able to outsource
innovation ... and that’s a great thing.”
Michael Hart, Director of Engineering, Netflix
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13. BROADER REACH
Online businesses no longer measure their success on the number of users visiting a
primary web domain or launching a mobile application. Internet startups now incorporate
analytics quantifying the usage of their APIs by third-party applications.
By building their services with an API at the core, online ventures are able to expand their
reach to larger demographics through third-party services. If your business provides an
API, its usage numbers could be as important as your primary web domain traffic data.
SOCIAL GOOD
Both JPMorgan Chase and Intel host and sponsor hackathons, where developers work
over a weekend on some set of problems using APIs and other technologies. They’re a
great source of social capital, as well as a proving ground for digital talent.
A NEW FUNNEL
Depending on what kind of APIs you provide, and how you structure the business case
around your APIs, you might even find new customers. CNET provides a metered API – if
you start to exceed limits, you’ll get a call from the sales team.
However, charging for API usage (like Alexa) might limit the reach and usage. A careful
strategy that balances costs, API usage models, and potential success is vital. Your
business is different than a startup’s—plan accordingly.
“We tried charging for our API without much success.
Then we paid developers to use it and it took off.”
Paul Forster, CEO, Indeed
NEW CONCERNS
Here, too, there are new concerns to address. You’ll need to actively reach out, take
feedback from, and work with developers. You may need to plan new IT infrastructure
to handle external access to services. And, of course, you’ll have to think and plan what
services to offer, and how to budget for them.
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14. Navigating a world of fragmented devices.
The device fragmentation resulting from the impending “Internet of
Things” will force most business services to be accessible and usable
on a multitude of devices and systems. Taking the API path is a good
first step towards solving that future problem.
Tablet
Feature
Phone
Web App
Smartphone
Television
Private Business
Partner
Game
Console
Third-party
Developer
Connected
Objects
In-Car
Entertainment
With an adequate API strategy, you are ensuring your services will be
available in any online connected context, present or future.
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15. “Developers are now sitting
between you and consumers.
They are like the retail store
in the value chain.”
Sam Ramji, Software
Strategist at Apigee
“APIs are how we are going to build software in the
future. We are just going to glue it together.”
John Musser, founder of Programmable Web
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16. Let’s look at some notable examples of API providers; some of
them are well known and provide their own APIs, while some
work behind the scenes as components of well-known mobile
apps or solutions.
Google Maps API
Since its inception in June 2005, Google Maps API has been
integrated by hundreds of thousands of online services and is
now the most used API for mashups. It’s free for commercial
use below 25,000 map accesses a day. Here’s how a few
companies are building on the Maps API.
https://developers.google.com/maps/
http://www.google.com/enterprise/mapsearth/
LEGO Australia teamed up with
Google to build LEGO structures
using Google Maps API.
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17. Trulia uses Google Maps
API for Business to let
its visitors visualize data
of the neighborhood
around each of their
listings (safety, commute,
school quality, nightlife).
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18. Facebook API
Previously known as Facebook Connect and part of
the Facebook API, Facebook Login has simplified the
authentication process for thousands of online services.
It lets people safely sign-up and log-in using their
Facebook credentials on third-party platforms. Those
platforms can then optimize the experience based on the
user personal data and their social circles.
Twitter, Instagram, LinkedIn, Google, and Weibo among
others are now providing similar authentication systems.
One third party application using the Facebook API is
AirBnB.
https://developers.facebook.com/docs/facebook-login/
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19. AirBnb let users quickly and
easily register into their
website using Facebook Login.
Once connected, AirBnb leverages
the Facebook user data (via the
separate Facebook Graph API) to
personalize the search results based
on the user’s social graph.
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20. But not all successful web
businesses have an open API
Pinterest and Vine are two well-known web platforms
which do not provide an API.
The positive or negative impact of this decision has yet to
be quantified.
Vine is known to have an internal API on which the
branded Vine mobile applications are actually built (but
their API has still not been made public). In the meantime,
Instagram has launched its video service with the video
functionality already available through their API.
Google+ is also not providing an API per se, but some of
its underlying services (such as Google Authentication)
are available through more generic Google APIs.
http://khakimov.com/blog/2013/03/12/vines-undocumented-api/
“Bake your business model into your API.”
John Musser, Founder, Programmable Web
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21. API architecture needs to match the business
FREE
Facebook, Twitter,
Instagram, LinkedIn
PAY AS YOU GO
Amazon Web Services
TIERED
Mailchimp, Campaign Monitor
FREEMIUM
Google Maps
UNIT-BASED
Sprint, Yahoo!, BOSS,
Wordstream
TRANSACTION FEE
Developers don’t pay for any of the
services provided.
Developers pay for what they use with
a minimum fee.
Developers pay weekly, monthly or yearly
with usually a limit in the number of
operations they can execute based on
the tier level they belong to.
Developers can use the API for free
unless they are willing to go beyond
a specific number of requests and
transations per day/month.
Developers purchase credits on demand
or over a defined period which they use
to call certain API services.
PayPal, Braintree, Stripe
Developers pay for the service through
a transaction fee.
REVENUE SHARING/
AFFILIATION
There is also the case of developers
getting paid via revenue sharing or
affiliation.
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22. APIs can create value for non-digital
businesses too.
These companies already have an API.
Governments
(Open Government Data)
Governments are also opening up with open data initiatives
happening all around the world. The Open Government
Partnership is influencing and leading governments to promote
transparency, increase civic participation, fight corruption and use
technology to be more effective and accountable.
Back in June 2013, thick clouds of haze resulting from illegal
wildfires on the Indonesian island of Sumatra affected Singapore.
The pollution level was high, threatening people’s health. In
days, multiple independent mashups built around the Pollutant
Standard Index (PSI) got launched to inform citizens. The PSI
data was coming directly from the open datasets provided by the
Singapore government.
http://data.gov.uk/, http://data.gouv.fr, http://next.data.gov/, http://data.gov.sg/
http://www.opengovpartnership.org/
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23. New York Times
http://developer.nytimes.com/
The newspaper industry has been in crisis for the last 10 years.
Rare are the newspapers that have been eager to innovate. The
New York Times jumped early in 2008 onto the APIs bandwagon.
The Times gives access to programmers and developers to
2.8 million news articles going back to 1981, but also to movie
reviews, best sellers, events, real estate, comments and other user
generated content. This is a newspaper that understands that
content is just data that can be remixed and presented in many
different ways.
http://gigaom.com/2009/02/08/the-nyt-api-newspaper-as-platform/
General Motors
General Motors has made the move towards APIs by providing
developers with an development framework for vehicles.
You can either build in-car apps or apps that remotely interact
with the vehicles (unlocking doors, activating alarms).
https://developer.gm.com/apis
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24. A new wave of API-only businesses are
stealing market share from some of the
Web’s biggest players
The Internet era has brought up new services that have shaken entire
industries.
With the API era will come new services that will put even established
digital platforms in uncomfortable positions. These services were born
as APIs and don’t have front-end tools of their own. They are building
blocks to construct your platform with. They understand the new digital
business models that are open and rely on innovation.
Twilio, SendGrid and Stripe are respectively API-only equivalents of
Skype, GMail and PayPal. They provide telephony, email and payments
platforms to third-party developers wishing to integrate that type of
services into their own applications.
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25. Lob is providing printing through
an API.
https://www.lob.com/
Contentful is putting the CMS
in the cloud via an API for
content publishers to deal with
fragmentation.
http://contentful.com
Easypost is simplifying the
shipping component of
ecommerce platforms via an API.
https://www.easypost.com/
Supermarket API is listing grocery
products available in local stores.
http://www.supermarketapi.com/
As API-only platforms, these businesses stand a better chance of
fighting the upcoming fragmentation resulting from the multiplication
of connected devices. By tapping into the huge network of developer
talent that relies on open APIs, they are quickly making existing
products in their respective industries look out of fashion.
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26. “The question is no longer whether an API should be built—it now
revolves about how the API should be built (and how a company
can retain power over it).”
Peter Weller, IBM API Management
WHAT DOES THIS MEAN FOR OUR CLIENTS?
Web APIs require a new infrastructure,in most businesses:
API management platforms. These platforms need to
support developer portals, key management and approval,
metering and billing. And of course, API security and
access control must be enterprise level.
Most companies don’t support these requirements in their
existing architecture.
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27. HOW DO YOU BUILD THIS?
API management is a new business in which a lot of pure players
have emerged.
These new companies tend to provide native API solutions, which
would perfectly suit companies that have not done previous
investments in complex architectures.
For a business whose previous investments in architecture
are significant, a solution providing a bridge between legacy
communication systems and an API interface would be more than
adequate. (IBM, Layer 7, Vordel, Apigee are some players in this space).
Building an API is not easy, and building a business with an API at
the core is difficult. But building and managing an API on top of
your existing infrastructure for internal and external consumption is
even tougher.
API-only businesses devote entire teams to working on each part of
their service, which is obviously not an easy task for a traditional IT
department to take on.
That is what API management software comes in, streamlining
all of the API management, getting approval to unlock data for
external consumption or providing the needed understanding of API
performance requirements.
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28. HOW DO YOU DRIVE USAGE?
Twilio and Box are examples of companies that
incentivized developers through contests with free trials
or compensation to build applications on top of their APIs.
Hackathons are another popular method for having
developers building on top of an API. They are usually
organized on weekends with all participants gathering into
a venue dedicated to the event. A large potential payout
is usually essential to draw quality talent. Out of the 160
Hackathons organized in the entire 2011 and the first
quarter of 2012, the top prize was US$100,000.
It is very important to always keep in mind that because
developers build applications, they are the first and most
important users of your API. And unless you are in a
strict contractual agreement with them, do not expect
them to use your API only when developing applications.
Developers will eventually merge data and functionalities
with what your competition is providing if that makes
sense on a user experience point of view.
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29. What to take away
APIs WILL BECOME INCREASINGLY CRITICAL
It is now a common practice to expose part of your functionality
or data as an API to others on the Web or at least internally to a
corporation. It is very rare for new online services to launch without
providing an API or planning an API release soon.
With the rise of the “Internet of Things” and the fragmentation of the
devices market, APIs will become essential in helping your business
services to be fully integrated with any type of device.
APIs WILL CHANGE EVERYTHING
APIs challenge traditional business models. They require businesses
to reweigh the value of adoption vs revenue, as well as direct vs
indirect interactions. Established corporate concepts of IT security,
metrics and data will all need to evolve.
THIS IS A DIGITAL REVOLUTION
APIs will probably lead to a revolution bigger than the Web.
It has already started with mobile apps reaching billions of
downloads and most of them using APIs. This will continue as cars
become connected and explode as most other objects in your life
become connected to the Internet through APIs. The opportunity to
make sense of all these services and to stitch them together for
your users into valuable experiences can’t be ignored.
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30. WRITTEN BY
LAURENT THEVENET
EDITED BY
TODD DRAKE
JACK LEONARD
DESIGNED BY
KATHLEEN HANNA
WWW.BBDO.COM
WWW.PROXIMITYWORLD.COM
WWW.DIGITALLABBLOG.COM
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