Why should C-Level care about APIs? It's the new economy, stupid.
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WHY SHOULD C-LEVEL CARE ABOUT APIS? IT'S THE NEW ECONOMY, STUPID.
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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 contributions by experts and users in the coming months.
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You must cite this document: FABERNOVEL, Why Should I Care About APIs, December 2013
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Our job is to help large organizations think and act like startups. And we believe 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, new business drivers like APIs or successful companies like Apple, Amazon, Facebook… or LinkedIn.
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DIVE IN THE API ECONOMY PART #1
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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.
WHAT IS AN API?
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THERE ARE THREE MAIN TYPES OF APIS
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Partner
Partner APIs are used to facilitate communication and integration of software between a company and its business partners Advantages: • Value-added service • Up sell • Must have for business
partners
Private
Private APIs are used internally to facilitate the integration of different applications and systems used by a company. Advantages: • Rationalized infrastructure • Reduced costs • Increase flexibility: “real-
time” business • Improved internal
operations
Open
Open APIs allow companies to publicly expose information and functionalities of one or various systems and applications to third parties that do not necessarily have a business relationship with them. Advantages: • Delegated R&D • Increased reach, traffic • New revenue stream
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APIS IS AN INNOVATIVE AND EFFICIENT MODEL ALLOWING COMPANIES TO MANAGE THEIR CORE BUSINESS ONLY
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TRADITIONAL COMPANY
HR Finance
IT Logistics Marketing
Core business
R&D
R&D
Finance
HR
Sales
API-DRIVEN COMPANY
Logistics
Marketing
vs. “Elastic” IT
In a traditional company, all functions are internalized to support the core business
In an API-driven company, support functions are externalized via an API, focus is on the core business
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« GOOGLE NOW » IS AN EXECUTION OF INTERNAL & EXTERNAL APIS FOR PREDICTIVE INTELLIGENCE
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Google Weather API
Travel Agency API Flight Carriers APIs
Google Agenda & Maps APIs
The value of Google Now lies in the aggregation of mostly free data external and internal data
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TODAY, OPEN API GROWTH IS SKYROCKETING...
8 Source: ProgrammableWeb
Number of public APIs listed on ProgrammableWeb
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...AND OPEN APIS MEAN A LOT OF EXPOSURE FOR WEB GIANTS
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30% tweets from Twitter official APIs
$3.8B
AWS’ revenues (API-based)
9M apps & websites connected
14 billion API calls / day
1 billion API calls / day
1 billion API calls / day
Sources: the Verge, Gartner, Facebook, Netflix, Klout, ebay
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THE RISE OF THE PROGRAMMABLE ECONOMY
PART #2
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MOST APIS ARE PRIVATE AND THUS INVISIBLE TO THE PUBLIC
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Open APIs
Private APIs
10 332 APIs
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HISTORICALLY, APIS WERE USED BY BIG SOFTWARE COMPANIES BUT THEIR USAGE IS BECOMING MUCH MORE STANDARD TODAY
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2002 2006
Application Services APIs • Build new functionalities • Trouble-free interoperability • Accessible to big companies
Infrastructure services APIs • Allows companies to
externalize IT infrastructures • Access to computing power • Available to anyone
Web services APIs • Share data or services internally
and externally • More unified communication protocol • Accessible to any company • Easy integration
1990s
Internet of Things APIs • Share data or services
internally and externally • Generate new data and
optimize objects usage • Get real-time information
on objects usage
2013
APIs for operating systems • Create application for OS • Attract developers • Enlarge customer base • Limited to big software
companies
Source: 3Scale, What is an API?
1985 - 2001
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IN THE 90’S APIS ALLOWED PROGRAMMERS TO DEVELOP APPLICATIONS FOR OS
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TODAY, APIS CONNECT SMARTPHONES, COMPUTERS, TABLETS, ETC.
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TOMORROW, ALL OBJECTS AND PEOPLE WILL BE ABLE TO EXCHANGE RESOURCES THROUGH APIS
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1 50 billion of everyday devices are connected today
billion devices will be connected in 2020, and this figure will double every 5 years
TOMORROW: THE RISE OF CONNECTED DEVICES IS THE FUEL BEHIND BOTH PRIVATE AND PUBLIC APIS GROWTH
Source: Ericsson (considered a conservative figure)
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APIs foster all web services
AFTER TOMORROW: THE PROGRAMMABLE ECONOMY
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APIs are universal infrastructure APIs are a basic need
At the beginning of the 2000’s there was a website for everything: • Check the weather • Check in for a flight • Book an hotel
Tomorrow, everything will be aggregated on a single application like Apple Passbook or Google Now.
APIs are the roads and railways of the information revolution. Like distance to natural ressources during the XXth Century, companies' ability to use APIs becomes a key factor of success today. APIs will be the pipelines for the XXIth Century gold: data.
During past years, being connected everywhere has switched from an option to a must-needed for all smartphone users. While connected objects become more and more mainstream, their users will ask for common langages to plug them.
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WHY C-LEVEL SHOULD BE INTERESTED IN APIS?
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CMO Sales Director
COO
HR
CEO CFO
Communica7on Director
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BECAUSE APIS ARE ALREADY DISRUPTING ALL TRADITIONAL INDUSTRIES
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Retail Health Car Industry Media Farming
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Case Study #1
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1// SEVEN&I: APIS & MASS-CUSTOMIZATION
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7&I is a leading global company operating convenience stores. To maintain its position as world largest franchisor, surpassing McDonalds, 7&I relies on a cutting-edge IT system integrating all business departments in an “elastic” cloud infrastructure. Internal APIs allow 7&I to take full advantage of their big data collection.
#1
100% points of contact
connected
100% line-up
optimized from big data
3X deliveries per day
// This retail giant implemented in its 15,000’s Japanese stores:
56,000 stores globally
$29B+ market cap
$65B 2013 revenue
Sources: Seven&I Annual Report 2013, The Japan Times, 7Spot, LINE campaign in 7&I shops
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2// CONNECTING ALL POINTS OF CONTACT THROUGH APIS
1 // ADVANCED CASHIER DATA COLLECTION • User data (age, gender) • Environment data (location,
weather, time & date) • Manually added information
2 // ADVANCED LOYALTY PLATFORM • 25M card holders • 15,000 shops network • Digital payment platform • Smartphone/NFC version • Staff incentives on membership activation
3 // BIG DATA & ANALYTICS • Real-time data processing:
• Stock management optimization • Store line-up recommendations
4 // MASS-CUSTOMIZATION • Store line-ups are changed up to 3
times/day based on data recommendations
PRIVATE API Ø Push sales data
PRIVATE API Ø Pull recommendations
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3// THE VALUE OF APIs: INCREASING SALES REVENUE AND COMPETING WITH E-COMMERCE
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Seven&I optimizes line-up with Big Data technologies. Seven&I challenges Amazon and its peers by becoming a data-driven company and building the infrastructure to create personal shopping experiences.
(in seconds) [ ] [ ] (now in hours)
Seven&I can’t beat e-commerce giants and real-time customization. But strong and determined Big Data and intraday restocking strategies help them stay competitive with e-commerce execution speed.
APIs help retail giants reach e-commerce speed
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Case Study #2
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1// OMRON: DATA RESELLING
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Since 2012, OMRON partnered with DOCOMO and operated a business model switch, based on APIs. Their new offer, Wellness LINK by OMRON, is a B2B service aggregating the Cloud data from 15 OMRON devices (Bluetooth, NFC and USB).
Growth of OMRON B2B activities in 2013. Target revenue: $130M in 2015
OMRON is a Japanese manufacturer of health-related connected objects. OMRON is historically an automation and electronic components company, which recently entered the eHealth services business through private proprietary APIs.
Until 2012 Data accumulation and visualization for users
From 2013 New business model: creation of reference data sets for external partners, sold through APIs.
+30%
Sources: WellnessLINK (jp), Aninews.in, Docomo
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2// FROM DEVICE MANUFACTURING TO DATA RESELLING THROUGH PRIVATE APIs
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1// eHEALTH DEVICES • Blood pressure monitor • Thermometer • Scale Body Composition
monitor • Pedometer • Sleep monitors
3// PERSONAL DASHBOARDS • Cloud processing • Multi-device service • Context-based analytics
2// PUBLIC API • 10+ mobile device applications • Stronger engagement with tech
communities • Real-time data availability • Custom segmentation
4// PARTNERSHIP THROUGH PRIVATE APIs • Real-time health data access for
practitioners • Home monitoring for hospitals • Disease and epidemics patterns
prediction for the State
PRIVATE API Ø Push health data
PUBLIC API Ø Pull health data
PRIVATE API Ø Pull health data
PARTNER API Ø Pull Patterns Ø Pull Predictions
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3// THE VALUE OF APIs: DEVELOPPING A NEW HEALTH INTELLIGENCE BUSINESS MODEL
By reselling its health data, OMRON monetizes massive user data and has found a new revenue channel.
B2C NEW: B2B
Personal data visualisation Disease & epidemics intelligence
1,500 hospitals subscribed to Wellness LINK to optimize treatment efficiency
40 million Japanese suffer high blood pressure
16 million patients take a treatment
Today:
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Case Study #3
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1// HONDA INTERNAVI: FUTURE OF DRIVING
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Honda was the first car manufacturer to release a navigation system in 1983. Internavi Floating Car is Honda connected navigation service using mobile networks launched in 2003. The service gather 2 millions enabled cars in Japan.
Honda uses an internal API linked to its connected cars and navigation system (InterNavi), allowing to pull/push information to/from vehicles:
• Each car pushes real-time data with location and speed
• Honda archives data related to more than 1B km in Japan
• Data are processed and shared real time
Services included:
Real-time traffic conditions
Entertainment features
Car conditions Applications SDK
Sources: Honda Connecting Lifelines, Honda Silicon Valley Lab
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2// IN THE FUTURE CARS WILL BE MORE SIMILAR TO SMARTPHONES: CONTENT PLATFORMS WITH APPLICATIONS FOR EVERY USAGE
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3// PARTNER APIS PUSH CONTENT ON INTERNAVI • Weather information • Parking availability • ...
2// PARTNER APPLICATIONS • Music (Pandora,
aHaradio) • Navigation (Smartloops,
Waze) • ...
1// HONDA OFFICIAL APIs • Real-time car
informations on your computer
• Mobile devices applications
PRIVATE API Ø Push location & speed Ø Pull informations
PUBLIC API Ø Pull cars information
PARTNER API Ø Push media content
PARTNER API Ø Push environment
information
2M connected cars
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3// THE VALUE OF APIS: CREATING NETWORK EFFECT IN THE CAR INDUSTRY
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• HONDA opened a Silicon Valley Innovation Lab to work with potential partners and find new usages.
• Lately, HONDA developped new prospectives use cases:
Share of internal APIs data to predict road conditions after a
disaster (crowd sourcing)
Dedicated hacthakon with partners to test and develop new usages (the 1st Open API for a car)
Like Apple that turned the AppStore as a strong selling point, Honda is developing an ecosystem around the Navi System.
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Case Study #4
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1//COOKPAD: THE COOKING DATA PLATFORM
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Cookpad started as a web recipe sharing portal (≈Marmiton) and has since become a global intermediation platform dedicated to food. Revenue was coming from traditional online revenue streams such as:
Membership
500M+ pageviews/month
Marketing
Thanks to proprietary APIs and advanced use of Cloud architecture, Cookpad also developed innovative revenue streams such as monetizing analytics tools used by brands and business partners to gain better understanding of user behavior and most preferred ingredients.
Advertising
1M+ paying members
$42M marketing revenue
Sources: Coockpad, Cookpad Engineering Blog, ITMedia
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2// ON TOP OF CLASSICAL REVENUE STREAMS, COOKPAD’S GROWTH IS SUSTAINED BY A SYSTEMATIC USE OF PROPRIETARY APIs AND ADVANCED USE OF BIG DATA TECHNOLOGIES
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PRIVATE API Ø Push logs Ø Push traffic data Ø Push search data
1// RETAIL Food department layout is adjusted with Cookpad analytics
2// RESTAURANT Insight and analytics on client tastes
3 // FOOD INDUSTRY Crowd sourced recipes for brands
Dashboards Analytics & monitoring
User choice and taste Crowd sourced by search criteria Reporting Recipe analysis
PARTNER API Ø Pull layout
recommendations
PARTNER API Ø Pull taste
insights
PARTNER API Ø Pull taste
insights
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3// THE VALUE OF APIs: A UNIQUE NEW REVENUE CHAIN AND BIG DATA EXPERTISE
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$55M
2013 revenue Market cap
$860M 50%+
Profit margin
With APIs and a cloud infrastructure to leverage its data, Cookpad turned itself from a user-generated recipes platform into a big data company – with the associated metrics:
Having built a cloud API-friendly platform allows Cookpad to launch new products and innovate faster on mobile and abroad:
API-enabled recipe suggestions based
on physical lists
Strong links with the tech community
Crowd sourced translation
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Case Study #5
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1// FUJITSU: AUTOMATING ALL FARMS
Futjitsu has launched a new service called AKISAI that aggregates nationwide data from a network of sensors and cameras installed in fields and farms. The records include various data like soil temperature, moisture, rainfall, or humidity. Futjitsu wants to address the new farmer market: young ex-urbans with no farming experience.
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AKISAI uses Cloud technologies to store and process all farming data:
• Production schedules, production history, harvest volume, and planting information pushed through APIs ;
• Analytics give daily visualization of quality and cost for each planted field ;
• Farmers can look back on the results of previous plans and modify the farming schedule for the future.
Services included:
Recommendations based on history and
environnement
Advanced stats visualistations
Full farming data Cloud storage
200,000
Expected customers in 2016
Sources: CNET, Akisai Video Presentation, OpenToExport.com, DaiwaHouse
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2// THE RURAL FLIGHT TOWARD DATA INTELLIGENCE AND AUTOMATION
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2// MOBILE DEVICE Smartphones enrich Cloud data to improve feedback quality
3// FARMING INTELLIGENCE Recommendations for saving resources and increasing revenue
4// AUTONOMOUS FARMING Since 2010, autonomous tractors are using satellites to follow recommendations bases on history analysis
PRIVATE API Ø Push production harvest data Ø Push meteorological data
PRIVATE API Ø Push production
quality metrics
PRIVATE API Ø Pull farming recommendations
PARTNER API Ø Pull tractor
directions
1// SENSORS
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3// THE VALUE OF APIs: EMPOWERING THE NEW GENERATION OF FARMERS WITH DATA TECHNOLOGY
The current situation in Japanese farming creates opportunities for automation and intelligence • 60% of farmers are over 65 and the average age is over 70 • Only 420,000 out of 1.5 million farmers are engaged in full-time farming • Ageing of Japanese agriculture pushed the topic of farming knowledge management
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Tomorrow
• Fully data-driven and computer-processed farms. • System using advanced data computation to optimize
resources, from electricity, humidity or hydroponic fertilizers
• Computer assisted traditional farming: computers helps famers to take decisions
Daiwa House Agri-Cube
After-Tomorrow
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THESE COMPANIES RE-INVENTED BUSINESS MODELS WITH APIS WHAT ABOUT YOURS ?
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1// SALESFORCE, CRM IN PLATFORM-AS-A-SERVICE MODE
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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.
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2// WHAT WOULD IT COST IF THERE WERE NO APIS?
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Salesforce has 104 000 clients
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?
Salesperson
3 meeting/day
200 days/year 1 salesperson
= 600 meetings/year
To reach that client target in 3 years Salesforce would need around:
60 salespersons $9 million
Let’s assume that:
=
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
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3// SALESFORCE API EASES IT SERVICES INTEGRATION
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Thanks to its API, Salesforce can easily integrate with:
Applica7ons
Web services
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1// EXPEDIA, MARKETING THROUGH APIS
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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.
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.
Today, Expedia opened up an API for their affiliates to enable them to pick up:
Source: RWW, How an API Can Transform Your Enterprise
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2// EXPEDIA, MARKETING THROUGH APIS
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Links redirecting to Expedia website
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.
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3// EXPEDIA, MARKETING THROUGH APIS
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Thanks to its API, Expedia affiliates do the partnership and marke9ng work for Expedia at a
low marginal cost for Expedia.
Drives more traffic to Expedia
Generates new revenues sources
New distribu7on channels
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1// MANY USE CASE SCENARIOS ARE BUILT ON THE NETFLIX API
NeMlix offers subscrip9on to unlimited streaming movie and TV shows
In October 2008, Netflix opened an API to allow developers to use its resources: • Movie database • Queue management • Rental history • … The API is free and allows for commercial use
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2// MANY USE CASE SCENARIOS ARE BUILT ON THE NETFLIX API
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devices can stream Netflix content
developers use the Netflix API 800+ 20 000
Source: Redesigning the Netflix API, Daniel Jacobson
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3// WHAT WOULD IT COST IF THERE WERE NO APIS?
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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?
Developer
Let’s assume that:
Netflix allows third party developers to build applications for all sorts of devices, thus catering to many needs without involving
high development costs.
50 000$/year =
20 000 developers use Netflix API
Having these developers in-house would cost Netflix:
$1 billion/year
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1// FITBIT API, EXTERNALIZING R&D
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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.
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2// THRIVING INNOVATION BASED ON THE FITBIT API
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20 apps were built on the Fitbit API creating innovative uses of fitness and health data
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3// THRIVING INNOVATION BASED ON THE FITBIT API
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MapMyRun uses FitBit health data to provide joggers with sta9s9cs such as calories burned, heartbeat, speed, al9tude
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4// WHAT WOULD IT COST IF THERE WERE NO APIS?
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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?
1 application
Let’s assume that: $50 000 =
$1 million
20 applications are using fitness data from Fitbit API Developing these apps would have cost FitBit:
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.
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A COMPANY YOU MAY BE INTERESTED IN.
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WORK WITH US.
http://www.fabernovel.com
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THANK YOU
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To the fabernovel team
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Anne-Audrey Gounot Junior Art Director
DESIGN
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COMMUNICATION
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ANALYST
And also…
Francis Perrin Digital Strategy Consultant
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And more.
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Expanding to Russia with Love.
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