API Best Practices Blog
Retailer Markets Moving to Open APIs »
When one of the largest, most successful retailers on the planet makes a move, you can definitely consider it a confirmation of a trend.
Last week, the WSJ reported that Wal-Mart is opening smaller-format stores in new urban locations. Wal-Mart CEO Mike Duke stated in their annual report that their growth will be driven by “innovated new formats”, which includes the smaller stores and stores with drive-throughs for picking up internet purchases.
Essentially, Wal-Mart is going to where their customers are…. taking their brands to different chnnels where customers spend their time, to be there when those customers want to buy.
What does that have to do with APIs? Everything.
Retailers as diverse as Sears, Netflix, and BestBuy are opening APIs to take their brands and their services to where their customers spend time. Those customers are on Facebook, on Twitter, on enthusiast sites, on their iPhones, iPads, Xboxes, etc.
As the image below from Sam's Web 2.0 talk depicts - you may have to connect to customers across many diverse channels, from smartphones to Xboxes to your car and kiosks.)
Getting your capabilities into these environments where customers are spending time requires that you fit into new formats… like an iPhone or Android app, or an iPad or Xbox app. You can’t possibly be an expert in the dozens (hundreds?) of platforms, sites, and devices out there. Developers can help you do that, if you have your catalogs and services exposed via web APIs.
By the way, we have a new whitepaper out on Retail 2.0 today, you can get a sneak preview here.
Darwin’s Finches, 20th Century Business, and Open APIs: Evolve your Business Model »
Today @sramji was invited to speak on API business models and strategy at the Web 2.0 Expo in San Francisco.
Thanks to our customers and many others for these API best practices and ideas.
Considerations for ‘open data’ API programs »
In my last post I wrote about how the book digitizing effort is trying to monetize underutilized books online.
For anyone contemplating exposing data or capabilities via APIs to create new revenue streams, there are some important implementation lessons that can be learned.
Have control
In Norway’s Bookshelf project, their free online books can only be read online and only in Norway, and cannot be downloaded or printed out. Similarly, with APIs you need to have a way to control who can access your data and from where. API Identity, API authorization and other API security considerations are a must.
Make it (at least something) free
Google must operate under copyright laws, but it has found a way to freely expose extracts or snippets under ‘fair use’. Similarly, you cannot expect uptake of your content or capabilities if some of it cannot be consumed easily and en gratis. Give at least some of what you offer away for free to spur adoption. Technically, this means being able to control what can be consumed at a granular level.
Get started!
Google, Bookshelf, and Europeana have ideas about how they’ll monetize books they put online, but they are still experimenting with the right business models. Executives shouldn’t wait for an iron-clad business model to present itself… you won’t figure out the right model unless you are ‘in the game’.
How do content and transactional APIs differ? »
Recently, during one of our our RAW (Rapid API Workshops) with a retail customer, a great question came up - what are the major differences between a content and transactional API?
Probably not a complete list, but in general:
Content APIs are more likely to be open, without sensitive information. Think of a search, media, or mapping API. While the provider might want to track identity through API keys, these APIs often need no authentication, authorization, or encryption. Search results may be highly cachable, which might be helpful to support high concurrency for bursts of demand for popular content. Content APIs are also more likely to need throttling to protect the back-end and quotas to measure consumption - think about that grad student downloading your entire database one API call at a time. Users might have some tolerance of downtime for free content that can easily be requested again. Success for content APIs might be measured in terms of usage or engagement. (usage per consumer), so having API usage analytics might be important. If you can, make content APIs simple and easy to adopt with standards like REST.
Transactional APIs have sensitive data and therefore security needs go beyond identity and developer key level tracking to include API authentication and authorization. The data might need encryption and XML or API specific threat protection. Instead of quotas, the back-end business logic might already contain all the controls you need to measure consumption and monetization. There is probably no tolerance for downtime or lost transactions. And of course success for transactional APIs can be measured in existing financial terms.
| Content API | Transactional API |
|---|---|
| (Often) Open to all without authentication or encryption | Authenticated, authorized, and encrypted access |
| (Often) non-sensitive data |
Audit and compliance requirements |
| Static or mostly static data -- highly cacheable | Dynamic data -- limited cacheability |
| May have higher volume | Natural volume limits (user may have to pay...) |
| More likely to require quota (prevent download of all content, excessive updating, etc.) | Natural volume limits |
| Some tolerance for downtime (user can just refresh) | Little tolerance for downtime (did you charge my card or not?) |
| Metrics == API usage | Metrics == Financial ($$ of orde |
What's your experience in the difference between content and transactional APis?
Consider an API to unlock ‘dead data’ »
Book digitizing made the news last week, as Google announced a deal to digitize up to a million books from Italian libraries. Despite some author and publisher resistance, similar efforts are proceeding in Europe, including Norway’s Bookshelf project and Europeana.
What is the motivation for digitizing vast libraries of books?
Yngve Slettholm of Kopinor summarizes it well, “The vast majority of books are out of print and can be considered commercially dead.” “This creates an extra source of revenue for older books.”
What does this have to do with APIs?
How much ‘commercially dead’ data, content, or services is your company sitting on? Are you fully monetizing your assets? If you gave yet-known 3rd parties access to data or content locked in your company, what new business opportunities and revenue streams would be created?
That’s what an open API does. It unlocks data and content, giving it the potential to be consumed in new, innovative ways, and monetized. Via an API you can get the broadest possible distribution for the lowest cost.
One example of this is BestBuy’s Remix program; BestBuy opened the Remix API and now BestBuy can be accessed via mobile apps and in new ways and places where its customers are. Another example is Sears which has opened it's vast product catalog, and TransUnion, which made its core credit report and credit monitoring services available to 3rd party financial companies.
It is not always clear who will use the capabilities you expose or how. But one thing is for certain, if they are not accessible, they will not be used.
The book digitization efforts also hold some lessons for how to manage such a program, which I’ll cover in my next post.
Free vs. Open API: Is there a difference? »
"Open and Free" are often used interchangeably when talking about APIs. But if you look at in terms of the "API Economy" - open and free API are orthogonal.
'Freedom' in the cloud is more typically discussed as your rights to move data from one service to another. Application portability has also been raised as important but current application models are both early in their maturity curve and vary greatly.
Open and free are both crucial attributes in order for a market economy to grow. There are many aspects of cloud computing but for the developers and users of cloud services, the atomic unit of the cloud is the API.
The link between openness and economic growth is a deep subject that may provide clues for how to build a better cloud – this paper makes me think a company’s APIs might represent the “export goods in which it has a comparative advantage”.
In the software industry open platforms have typically outperformed closed platforms in the long run due to the economies that develop on top of them, cementing those platforms’ place in a range of markets.
Open APIs are:
1) Openly documented
2) Available via self-service (i.e. developers can sign up and get a key on a website)
3) Using open technologies (SOAP, REST, RSS)
A good example is bit.ly - a simple URL shortening service that also lets you see how many people have clicked on your shortened version of that URL. It’s really useful if you want to both project important articles on the web and understand the reach of your projection. Is it an Open API?
Test 1: Bit.ly's API is openly documented (here)
Test 2: It's available via self-service. You can get an account and a key right away.
Test 3: It uses open technologies: It's a REST API (granted, it is a mix of verbs and nouns)
Open APIs lead to 3rd party innovation
Tweetdeck users put their bit.ly API key into Tweetdeck, which automatically uses their bit.ly account (indicated by the API key) to shorten URLs that are typed into tweets. It made Tweetdeck better and probably increases the traffic to bit.ly.
This could also work on the iPhone application of Tweetdeck but it’s not yet implemented in the version I have. Many iPhone applications work use one or more cloud APIs that provide access to services in a clean, machine-friendly way.
From the efficiency of innovation perspective, keep in mind that Twitter most likely never contacted Tweetdeck to use their API, nor did bit.ly (as far as I know). The Tweetdeck guys simply built a killer application that uses those services via APIs rather than scraping their web sites. In the last month, Tweetdeck also added Facebook and MySpace support via their APIs.
Open APIs lead to innovation, efficiency and reach through designing your core business service to be “remixed” is found through APIs – Tweetdeck users got new value through the app they like and Facebook and MySpace got a new stream of user-driven content, all without sales or business development teams engaging at the outset.
Next time: Free vs. Paid APIs...
(Sam Ramji is the VP of Strategy for Apigee. Previously, Sam drove many of Microsoft's Open Source Initiatives)
