The Paradigm Shift in Web APIs
“When computing jargon slides into the public consciousness, you know something interesting is afoot. “ A journalist from the Star Ledger, a local New Jersey paper, wrote this amazing article a few weeks back that stated everything I have been feeling for a few months.
There is a major paradigm shift happening in the world of Web-based APIs and everyone needs to take notice. Over the last 5 months I have had conversations with hundred of companies that are creating business plans around something typically left to the techies – Application Programming Interfaces (APIs). Surprisingly, the majority of these companies are NOT Silicon Valley Internet companies. These are Fortune 500 companies in retail, travel, media, telcos and even healthcare. Their level of understanding ranges broadly from those who know what they hope to achieve by creating an API program and have established measurable goals, to those who aren’t quite sure what they will achieve, but know there is something out there happening and they want to be a part of it. They all know they need to do something new, different, and big to change their business. And APIs are going to play a role.
To explain the shift in what is happening I “borrowed” a great model from Forrester’s Jeremiah Owyang and his Eras of The Social Web. This new model is called the The Eras of Web API Adoption. The intent is to explain how we got to the point where everyone knows what the term API means (we already know Twitter has helped!) Note that my goal is not to categorize all the types of APIs, but to show how they were used and adopted.
The Eras of Web API Adoption
Era of Pick Axes and Shovels: The early use of Web APIs were those who had services to support the Gold Miners of the Web, the ecommerce vendors. The services they provided were the basics of shipping and payments. Yes, the folks at UPS, Fedex, USPS, all had APIs in the late ‘90s.
Era of the Internet Natives: In 2000, a pure play Internet company called eBay launched a “Listings API” trying to get more people to put stuff on their site. The goal was to get more stuff and more people. Then Amazon started using an API to drive their affiliate program. Their message: Help me build more stuff. Hoping to drive traffic and subscribers, Flickr, Salesforce, Skype, and others followed suit.
The Era of Web Utilities: In an effort to find a new place to live in Silicon Valley in 2004, Paul Rademacher built HousingMaps.com. This first mashup combined listings from CraigsList.com and Google Maps. What was amazing about HousingMaps.com is it offered a new and unique information source that was richer, and more useful, than either Craigslist or Google Maps alone. The notion of “the sum is greater than the parts” didn’t take long to catch on and has since driven creation of thousands of consumer utilities on the Web. This trend continues to grow as more content becomes open.
Era of Syndication: Internet companies and traditional content companies watched in amazement as companies like Compete gain traffic and surpassed Alexa by simplifying third party access to their information. It started with Internet companies in 2007, but by 2008 the New York Times had announced they were launching an API with access to all of their articles. The Guardian out of the UK hired Matt MacAlister from Yahoo! to run a developer program,. Mid-year NPR joined the media players looking to drive traffic and revenues with APIs. We are still in the early stages of this era. There are a few early adopters leading the way, while others look on to see how it all works out.
Era of Business Automation: In the first quarter of 2009 interest from enterprises across traditional industries such as Retail, Media, Healthcare has grown. Their interest in participating in the Social Web movement that Jeremiah Owyang outlines is why many are creating APIs (see Era of Syndication). Along the way, there is opportunity for new distribution channels and new revenue opportunities.
The Best Buys of the world are looking to drive innovation and increase revenue by creating Amazon-like affiliate programs. Tesco’s goal in releasing their API is find innovative ways to engage their customers and take more of the fewer dollars they are spending. These are primarily all Web-driven models. Internet Native player Ribbit wanted to be Silicon Valley’s first phone company and was a pure play API offering. Now traditional telco’s want to join in and their counterparts in cable want to figure out how to leverage all their assets to increase the value of the triple play.
Adoption of this model will take us beyond the Web and mobile devices, across platforms and even appliances. Netflix leads the way as their partnership with companies like Xbox will leverage APIs for syndication. We are just at the beginning of this era. I can’t wait to see what is ahead.
Over the next few posts ahead, I hope to share more insight about what is happening as enterprises continue to adopt APIs as their new distribution model across platform