The API Tempest

The API Tempest
Leading during a sea change
Sam Ramji @sramji
VP Strategy, Apigee

“ Full fathom five thy father lies;
Of his bones are coral made;
Those are pearls that were his eyes:
Nothing of him that doth fade
But doth suffer a sea-change
Into something rich and strange.
William Shakespeare
The Tempest

APIs challenge every notion of IT – governance,
financial planning, team composition, success
metrics, security – and many notions of business –
secrecy, precise business agreements, locus of
control.
This is not because of APIs as a technical evolution.
This is because APIs are part of the vanguard of the
new world of work, the beginning of a 20-year
productivity boom that will unsettle traditional
hierarchies and business models in an even more
pervasive way than the 10-year boom of the Web.

The new world of work is based on openness:
open collaboration,
open innovation, and
open ecosystems.
Underlying this shift are technical enablers:
open mobile devices,
open networks,
open data.
APIs themselves may not be the most important
angle on this phenomenon, but it is the lens
through which we see the entire transformation.

Technology management is changing.

From To
Data Silos Data Services
Governance Curation
Waterfall Agile
IT Ops DevOps
RIM/Blackberry iPhone/Android
VPN OAuth
Physical Servers Cloud Servers
Virtualization Abstraction
Requirements Design
Browser App

Business management is changing.

From To
Deal Brokering Self Service
Central Planning Edge Innovation
Revenue Adoption
Control Context
Prevention Encouragement
Direct Digital Business Indirect Digital Business
Major Releases Small Constant Updates
Channels Ecosystems
Precise Execution Speed and Iteration

10 years ago no one would have believed that

The largest vendor of compute, storage, and
networking in the world would be…
The world’s largest bookseller.

Niels Bohr
“ Prediction is very difficult,
especially about the future.
Nobel Prize in Physics, 1922
for contributions to Quantum Mechanics

Let’s try to look just 5 years ahead through the
lens of current macro trends.

The world will be faster, more connected, with a billion more
participants in the global economy.
A rising middle class in Brazil, India, China, and Indonesia will adopt
devices first and computers second, leaping the digital divide.
Gen-Y consumers and employees will be in their 30s, defining the
conventions for work and play styles.
4G wireless will be broadly available and 5G will be in limited
deployment.
Carrier networks will be optimized for traffic against specific services
and media types.
Consumer devices will be dominant, but small devices for data
sensing and processing will make up a significant percentage of
mobile and Internet traffic.

Industries will be platform-shaped, with a dominant player occupying
the high-margin platform position and pushing others to supporting
roles.
Data will be a unit of value and a mechanism of lock-in.
Most commerce will be initiated via mobile devices and completed
on a range of platforms.
Most transactions, when executed, will be multi-party: between the
app and the underlying services.
Social media with effective partitions and channels will be the
dominant mode of communication.
Above all, user attention will continue to fragment, alternately
directing and being directed by a range of apps.

Product to Platform
Product
Subsystem
Suppliers
Component
Suppliers
Raw Materials
Suppliers
Products
Consultants
Resellers
Products
Platform
Data
Products + Data

This suggests five changes in business

The fundamental shift from push to pull means that businesses are rewired
to focus on the edge.
Push was based on a worldview that the smart people who run the company
had the answers and needed to push execution down and out to the edge.
Pull is based on a worldview that truth is found in the market and that
innovation, interaction, and insights come from the edge of the business.
The edge must be enabled and information must flow from the edge to the
center.
Open devices on an open internet are the tools used by the people at the
edge of the enterprise.
Budgets are growing but CIOs are controlling less, because edge users are
choosing their own technology based on the best that is available on the
market, not what IT gives them. They buy their own devices and expect
them to work. If IT can’t get apps working on those devices, they will
develop their own. The consumer is dictating to the enterprise how
computing is being done.

Data is the primary good that flows through the new edge economy.
We move from a web economy to a data economy. The nature of data has
changed; it is no longer in a database, but in massive streams of small
chunks of data moving around. Data needs to be pulled from different
places, and the most important place to enable pull is not the enterprise’s
employees; it is their customers and partners. Deliver data, not pages.
The transition from transaction focus to data focus forces the shift to real-time.
Pull economics are based on availability of a good on demand, in response to
the request. Customer, employee, and partner attention patterns will
reward the most responsive systems. These systems have a weakest link
constraint: the whole system is only as fast as the slowest connection. Pull
will drive the final stages in the shift from batch to real-time business.

These changes are global.
Global businesses must adapt to this change or perish – either driven out of
business by agile competitors or pushed into a lower-value part of their
industry by a platform competitor. Single-country players will be
decreasingly competitive versus global companies, except where they are
protected by regulatory action. The new rule will be extending demand
chains and partnering for local and niche delivery of experiences.

And four changes in technology

Websites are disintegrating.
Why? One billion more people will be using smartphones. Current
smartphone users will expand to tablets, readers, connected cars, and smart
televisions. Usage shifts towards small devices, multiple operating systems,
and small apps exposing slices of functionality all connected to a common
backplane.
The backplane is data.
As websites give way to apps, the common denominator is data, and the
point of control is the API. Access, instrumentation, monetization,
customization, and scale all center on the API. Data delivery depends on
continuously controlled, cached, and customized data availability from
underlying datastores. When correctly enabled, this backplane creates the
necessary conditions for apps on all devices.

The API is the point of control.
The definition of the API sets a standard for the ecosystem. Each player in
the value network writes to the standard, setting software lifecycles on top
of the API. While the API may expand over time, the ecosystem hardens
around the adoption leader. Apps and devices are disposable, but the API
with critical mass is irreplaceable.
The competitive advantage is data insight.
Business agreements and source code can be duplicated. Algorithms can be
reverse engineered. A business that builds a critical mass of customer data
relative to competitors can execute a virtuous cycle strategy where each new
user and device in the system adds to the velocity of the system’s data
growth. This breakaway strategy extends a core advantage – faster global
adoption – and builds a new one: data insight. Slices of the data itself
produce large-scale dynamic knowledge about the users and actors in its
industry which cannot be duplicated, and which can be used for 1st party
business optimization or sold to 3rd parties for profit.

How will the sea change affect your industry?

How will it rewrite the rules of competition?

Looking back from 2018, how would you
describe the changes and how you led your
company to a dominant market position?

THANK YOU
Questions and ideas to:
@sramji

The API Tempest

More Related Content

The API Tempest

Editor's Notes