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Why APIs? On doing Business in the Full Context of Customers

Brian Mulloy
May 22, 2012

We received some strong interest in our recent webcast Why APIs in which we explored why APIs are important to successful businesses and the different API strategies (Internal, Partners, Customers or Open) we see employed. So we thought we'd drill down into the core ideas in a few blog posts.

What challenges are businesses facing in 2012?

The three major trends of social, mobile, and cloud in the market today are driving huge changes in how individuals connect, how businesses connect, how businesses engage with their customers and employees, and therefore how Information Technology (IT) works.

According to analysts at Canalys, at the end of 2011, smart phone shipments outpaced PCs (including iPads) for the first time—smart phone units shipped was up 63% from 2010. Gartner estimated that 18 billion apps were downloaded in 2011, up 114.5% from 2010 and will rise to 31 billion in 2012.

According to this IDC study in 2011, the use of consumer-inspired social media such as Facebook and Twitter is also growing fast: almost twice as many information workers said they were using these technologies in the workplace in 2011 as the previous year. IDC also predicts that the market for Big Data technology and services will reach $16.9 billion by 2015, up from $3.2 billion in 2010. That’s a 40% growth rate year-over-year.

The “consumerization” of IT is happening fast thanks to each of these trends individually but even more because of how these trends are playing out in concert in the marketplace. The effects multiply to drive ubiquity and an explosion in consumption.

A strategy for the explosion of consumption

Think about a person sitting watching TV, while using his iPad to keep up with friends on Facebook, while browsing coupons on his Groupon email alias. Or consider the businessperson waiting for a flight using her Android tablet to check her social network on LinkedIn while accessing salesforce.com to forecast her sales pipeline.

These scenarios, and dozens of others like them, represent a fundamental shift in how customers are interacting with businesses. It’s no longer interaction through a Web site but through apps on numerous devices and platforms, social media, and cloud services.

The question on the provider side becomes whether businesses have a strategy for the explosion of consumption and whether they are doing business in the full context of customers and consumers. It’s always an imperative that businesses align investments with their customers.

Doing business in the full context of customers

How does a business effectively target and support the consumers in our scenarios? Let’s look at how apps are built in a typical enterprise. It’s common for the initial requirement for an iPad app to come from the executive office or from a marketing team. A business might start by developing an app with one of their products, a partner, a social network (say, Facebook), and a cloud service (say PayPal). The app is built and all is well. 

Then they realize that there’s also a user base on Android so they build it again on the Android platform. Then they realize that they should target another social network. So they build again. And again and again to target more social networks, products, partners, and cloud services. Quickly, there’s a plethora of apps targeting different platforms, different services, different partners, and different products.

The order of magnitude increase in resources to support different browser types in the mid-1990s (to facilitate exposing internal systems via the Web) is happening again. Today, support is needed for different app platforms—different versions of Android and iOS, and so on.

Clearly, important changes need to happen in how we build our apps so that we can effectively and efficiently do business in the full context of customers.

Introducing APIs

The cloud, social, and mobile app phenomenon is stimulating an explosion in the API economy. Frequently when a mobile app user clicks a button to do a transaction (send messages, make trades, get credit information, and so on) or sends or retrieves data, an API—either transactional or data—is called.   Anant Jhingran (@jhingran) describes transactional and data APIs as the Yin and Yang of APIs. He posits that while the API conversation is dominated by transactional APIs today, a revolution is underway in the world of data APIs because of the requirements for easy consumption, flow, and interaction of data in a world of big data.

Next time, we’ll dig deeper into how APIs are the answer to handling mobile and social ubiquity and how they bridge the gap between IT requirements and those of the new app economy.

API Management Decision-Making Kit

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