The Art of Fly Fishing and the Cognitive Economy - CANARIE · 2017-01-09 · The Art of Fly Fishing and the Cognitive Economy Campbell Robertson Public Sector Lead –IBM Cognitive

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The Art of Fly Fishing and the Cognitive Economy

Campbell RobertsonPublic Sector Lead – IBM Cognitive [email protected]@Campbell_Tech

The Art of Fly Fishing

Matching the Hatch

• Knowledge

• Equipment

• Technique

cc: Michael Elleray - https://www.flickr.com/photos/36021014@N06

Match the Hatch - Knowledge

• Canadian Economy & Speed of Innovation

• Demand information

• Old ways do not provide capability to expand

• S&T needs to be re-invigorated

• Communication Research Centre

• Limits to collaboration

• ICT and HPC is needed

• Cloud Drives Lower Cost to Participate

• Data Gravity

• API and Cognitive Computing Driven Economy

• “Evidence Based” Decisions – Reduce the Noise

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The Canadian Economic Climate – Match the HatchCanadian Chamber of Commerce - Top 10 Barriers to Competitiveness 2016

1. Public policies block small companies from becoming biggerCanada has tax barriers and policies in place that keep its small businesses from growing into big businesses with more resources to hire, invest and innovate.

2. Canada is vulnerable to cyber crimeCanada loses $3.12 billion to cyber crime per year, and nearly half of

all small businesses have been the victim of a cyber attack because

they are less equipped to handle attacks.

3. Canada needs a more aggressive and effective innovation strategyCanada needs to reinvest in an innovation ecosystem that

supports the capability of business to rapidly respond to change.

4. Canada’s trade agenda—new agreements are just the start

Canada has been aggressive in pursuing new trade agreements over

the past few years but its businesses continue to face substantial

barriers expanding abroad, and Canadian exporters are falling behind

in key markets like China.

5. Canadian resources cannot get to world marketsCanada’s trade and foreign investment flows depend on natural

resources and its future economic prosperity depends upon its ability

to provide reliable infrastructure to allow Canadian energy resources to

fuel Asian economic growth at world market prices.

6. Poor literacy, numeracy and digital skills are limiting productivity in

segments of Canada’s workforce Half of Canadians do not have the

levels of literacy, numeracy and digital problem solving skills they need

to compete in today’s economy.

7. Canada is not ready for climate changeCanada must keep pace to maintain its competitiveness as a location for investment and a source of products.

8. Internal barriers to trade cost Canadians billions and restrict investmentThe Canadian economy remains divided by artificial barriers to

trade and labour mobility that frustrate business investment and

cost consumers billions of dollars every year.

9. Lack of clarity regarding businesses’ responsibilities to Aboriginal peoples constrains investmentCanada needs meaningful reconciliation with its Aboriginal peoples.

10. Canada’s brand does not support business competitiveness

A strong business brand would encourage foreign direct

investment in Canada, increase awareness of Canadian export

products and support Canada’s tourism industry.

4x90% 100% 75Bincrease in cloud

investment vs 2013of data created in the last 2 years

of LOB apps will be mobile first by 2017

internet connected devices by 2020

Why ? …. Well because a digital disruption is underway

Escalating client

expectations+

Customer centricity is the only differentiator in today’s world

Intensifying

competition

Increasing

complexity+

= differentiated experience matters

The way we reach and understand customers is evolving

Websites

Connected Appliances

Partners Websites

Internet TVs Smartphones

Tablets

Game Consoles

Connected Cars

Millions 1993 - 2000 Trillions 2013+

APIs

Application Program Interface

APIs

• Leverage business functions and execute actions

• Exchange information between information sources (such as events, services, information or data stores) or a combination of all of these

Big Data Assets

Big data sources provide insights that are shared and monetized through APIs

Social Users

Social APIs fuel personalized experiences for users and new business models

Cloud Web Apps

Cloud services are exposed through Web APIs enabling rapid composition environments

Mobile Apps

Mobile applications make calls to back end services through Web APIs

Externalization Consumption

Integrated and enabled by an API

economy

APIs are giving rise to “dynamic business composition”

APIs are a fast path to new business opportunities

and growth is accelerating dramatically

By 2015, 75% of the Fortune 1000 will offer public Web APIs.

By 2016, 50% of B2B collaboration will take place through Web APIs.

Sources: Gartner, Predicts 2012: Application Development, 4Q, 2011; Gartner, Govern Your Services and Manage Your APIs with Application Services Governance, 4Q 2012; Gartner, Open for Business: Learn to Profit by Open Data, 1Q 2012

Understands natural language and human communication

Adapts and learns from user selections and responses

Generates and evaluates evidence-based hypothesis

…but wait…there is also Cognitive Computing

1

2

3

Retrieve and Rank

13

Message Resonance

Concept Expansion

Face Detection

Natural Language Classifier

Speech to Text

Text to Speech

Language Translation

Language Detection

Sentiment Analysis

Dialog

Retrieve and Rank

Image Link Extraction

Tradeoff Analytics

Entity Extraction

Tone Analyzer

Personality Insights

Taxonomy

Author Extraction

Concept Tagging

Relationship Extraction

Concept Insights

Relationship Extraction

Question & Answer

Feed Detection

Keyword Extraction

Visual Recognition

Image Tagging

Text Extraction

IBM Watson’s APIs are the cognitive building blocks that harness our data.

Leverage Cloud Based APIs to apply cognitive capabilities to your business model

Natural Language Classifier

Tone Analyzer

The Art of Fly Fishing

Matching the Hatch

• Knowledge

• Equipment

• Technique

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Equipment

• Platform as a Service - Speed• Cloud – Low Cost• API - Adaption• Cognitive - Innovation

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APIs are being adopted at a massive scale

By some estimates, there will be one million APIs before the end of the decade – including cognitive APIs

Currently, there are 9 million developers working on private APIs. As developers see the increasing opportunities, we may see a significant shift to public API development (where there are only 1.2 million developers)

By 2020, it is estimated that 26 billion devices will be using one trillion applications

Public APIs are growing exponentially

13 billionAPI calls/day

1.4 billionAPI calls/day

5 billionAPI calls/day

IBM. “Welcome to the Cognitive Era.” http://www.slideshare.net/ibm/welcome-to-the-cognitive-eraMurphy, Matt. “The Rise of APIs.” Techcrunch.com. May, 2016. https://techcrunch.com/2016/05/21/the-rise-of-apis/DuVander, Adam. “Which APIs Are Handling Billions of Requests Per Day?” ProgrammableWeb blog. May 23, 2012. http://www.programmableweb.com/news/which-apis-are-handling-billions-requests-day/2012/“Gartner Press Release.” Gartner.com. December, 2013. http://www.gartner.com/newsroom/id/2636073

“Producing an API is the only way we are going to … be the

leader of transportation.”

– Head of Developer Relations, Uber

APIs are being used across a number of different industries and platforms

REST APIs for Mobile Apps

Authentication Flow

Vehicle List

Vehicle Status

Vehicle Commands

APIs enable companies to access and enable data from a wide variety of sources

APIs & Information sources

Glickenhouse, Alan “The API Economy and IBM API Management Overview.” https://www-01.ibm.com/events/wwe/grp/grp004.nsf/vLookupPDFs/Integration%20-%20API%20Management/$file/Integration%20-%20API%20Management.pdf

Example of how APIs can be used for information access and integration

Blockchain uses APIs to open up business networks to provide seamless ledger and payment services

• Blockchain enables enterprises to interact more efficiently with transaction time going from days to near instantaneous

• APIs give developers the ability to programmatically control the blockchainnetwork through smart contracts that access internal state storage through state APIs.

• The shared ledger allows third-parties to create and plug-in new value that they can either monetize or place back into the community

Ferris, Chris. IBM’s Open Blockchain: Making Blockchain Real for Enterprises. Developer.ibm.com. April, 2016. https://developer.ibm.com/open/wp-content/uploads/sites/50/2016/06/Open-Blockchain-Charts.pdf

The Art of Fly Fishing

Matching the Hatch

• Knowledge

• Equipment

• Technique

cc: Michael Elleray - https://www.flickr.com/photos/36021014@N06

Technique

• Broker, Create or Consume

• Monetize

• Globalization vs. Nationalization

• Canadian Innovation

• New Partnerships

• New Business Models

• Policy Change in Public Sector

• Unknown = Risk

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The API economy is both driven and enabled by a number of important external forces

Drivers

Enablers

Determine where and how APIs add value to the business

Identify how APIs can add value to the organization, including their impact on the business model and associated revenue streams

Three factors enable companies to compete effectively in the API economy

Manage APIs as a product

Create an engagingAPI experience

Develop a product centric approach regarding how APIs are produced and consumed from ideation through retirement

Deliver a differentiated experience that attracts targeted partners within the ecosystem and creates “customer stickiness”

Business models in the API-centric economy can be broadly divided into three categories

The business model relies on direct sales of products or services

Direct sales can be to an individual consumer or to businesses

APIs provide direct revenue generation for the seller

Transactional

ProductIndirect

Direct consumption of products and services via APIs

Market making enabled by APIs

The business acts as a Market-Maker bringing the consumer and the producer of the services

The business model is akin to that of a broker generating revenue as a commission or fees for the business service provided

Enterprises may leverage more than one business model depending the nature of the APIs and the services they are delivering to the marketplace

This model relies on the ecosystem partners who are responsible for making the sale of the products and services to the end consumer

Sales by the ecosystem partners generate revenue

Ecosystem enablement API-driven sales

Each business model comes with its own set of opportunities and challenges

Direct Consumption Market Making Ecosystem Enablement

Strengths Low costs due to “direct” to consumer business model

High control over API branding and SLAs

Consumer ecosystem accepts even

low-use consumers to achieve acritical mass for effectiveoperations

Ability to scale by leveragingmultiple producers

Ability to provide global footprint by leveraging “local” partners

Access to a wide ecosystem of innovative API mashup offerings

Ease of global expansion for producers of digital goods

Ability to scale by leveraging multiple producers

Ability to provide global footprint by leveraging “local” partners

Challenges Restricted supply chain and sales channel

Lack of incentives for ecosystem partners for promoting adoption

Business viability highly dependent on market liquidity

Impact on brand due to third-party SLA dependency

Low barrier to entry for competitors leveraging similar Capabilities

Revenue dependency on partner sales

Possible impact on brand due to third-party SLA dependency

Possible impact on consumer offering due to differing versions and upgrade paths of constituent producers

Determining the right monetization model is crucial to revenue generation

• Drives Adoptions of APIs

• Typically low valued assets

• Drive brand loyalty

• Enter new channels

For Free

Facebook Login API provides free authentication for any Web / mobile app

Example:

Developer Pays

Business Asset must be of high value to the Developer

For example, marketing analytics, news,

Capabilities such as credit checks

Amazon EC2 Web Services – APIs charge per usage to launch and manage virtual servers.

Example:

Developer Gets Paid

Provides incentive for developer to leverage web API

Ad placements

Percentage of revenue sold product or services

Google AdSense APIs pay developers who include advertising content into apps

Example:

Indirect

Use of API achieves some goal that drives business model.

E.g. Increase awareness of specific content, or offerings

eBay Trading APIs offer developers access to trading services extending the reach of listings and transactions

Example:

Each monetization strategy comes with its own set of opportunities and challenges

Indirect Transactional ProductOpportunities Centralized IT lowers total

cost of ownership and provides superior control of corporate policies, especially privacy, security and regulatory compliance

Low entry barrier for value-add API Mashups

Reduced Capex and tiered Opex lowers risks to early stage usage

Monetization based on the “value” of the service provided

Potential for premium charges for brand value

Challenges Difficult to illustrate direct revenue impacts or tangible benefits

Lack of tangible monetization can impact offering sustainability or growth

Opex costs at sustained high volumes may not be price effective.

Transactional volume may not reflect true value of API usage

Cost variances and pricing instability due to mashups leveraging third-party APIs

Identify potential sourcesof API value

Locate areas in the value chain

where more seamless connectivity

adds value to the organization

Determine which combination of

functionality or data sources are of

value when exposed to internal or

external parties

Identify internal and external

partners whose unique

capabilities should be combined to

deliver new market propositions

Recommendations

Develop the business caseStart small, but design for scalability

Clearly spell out your company’s business goals that drive API creation or consumption

Examine business models and monetization strategies that address the needs of target audiences and internal funding requirements

Evaluate your existing IT infrastructure to understand the technical requirements associated with API development and ongoing support

Consider the development of internal APIs as initial proofs of concept

Set realistic targets for API adoption; recognize that while many public APIs have been successful, some have not

Identify qualified consumers with whom APIs can be tested and quickly ramped up if successful

Develop an appealing “home base” that provides users with a place to go for new innovations, technical updates and other user experiences

Cultivate advocates who are willing to share insights and enable others on the adoption journey

Engage in a dialogue with the community to capture innovations and address concerns

Create your API community

Focus on the brand

Performance = Brand Credibility

API material standard with corporate

Monitor customer perceptions in the marketplace and address accordingly

Recommendations

Use design thinking principles to craft the experience

Help users to “understand the possible” regarding API usage and value

Capture the customer journey to understand users thoughts, actions and feelings during the API adoption journey

Start small and create minimally delightful experiences, then add functionality over time

Example: IBM Bluemix is an “Open” Platform for API Innovation

IBM(Pay per use)

Third Party(Pay per use)

Your Own(including making corporate assets available as new products)

Community(Open source)

• Watson• MobileFirst• Analytics• Big Data• IoT• API Management• DevOps• Secure Gateway

• Docker Containers• Runtimes• MQ• Business Rules• BPM Workflow• Integration• Security• ….More

• Systems of record• Mainframe apps• Databases• Enterprise applications (Oracle, SAP, .…)• Web apps (WebSphere, JBOSS, WebLogic,

etc.)• Any existing business apps.

• Twitter data• Weather data• Open data• Box• Cognitive Scale• Twilio• Blazemeter• New Relic

• SendGrid• PubNub• AMQP• FlowThings• Pitney Bowes• Memcache• Redis• …More

• Java• nodeJS• nodeRED• SWIFT• .NET• Go• PHP

• Python• Ruby• Bring your own

buildpack and framework

Strategy

In what ways are internal or external APIs used by your organization today?

How do you identify existing capabilities in the marketplace that your organization could access through APIs?

What unique digital assets does your organization possess that could be more effectively exploited through the use of APIs?

Experience

How are your APIs viewed from an external brand perspective?

What is the experience of the API developer when using your APIs?

What is your organization doing to foster the promotion and adoption of your APIs?

Product management capability

How effective is the overall process for API lifecycle development in your organization?

How is API adoption integrated into your organization’s digital strategy?

What skills and capabilities could help your organization enhance its API product management capability?

Are you ready for the Digital Economy?

The Art of Fly Fishing

Matching the Hatch

• Knowledge

• Equipment

• Technique

cc: Michael Elleray - https://www.flickr.com/photos/36021014@N06

Ontario Invests in the Innovation Economy with IBM

“Ontario partners with IBM Canada and the Ontario Centres of Excellence (OCE) to help up to 500 small and medium-sized enterprises (SMEs) create jobs, embrace next-generation technologies and compete in the global marketplace.”

• Office of the Premier, Feb 24, 2016

A Valuable New Source of

Talent and Assets for Public

Sector IT Projects

• Q&A