3scale Presents Three Biz Strategies For Your API

Mark Boyd
Nov. 26 2013, 11:00AM EST

At today's NordicAPIs, Mark Cheshire, COO of API Management Platform 3scale, urged participants to act now to introduce APIs into their business. Not only is software eating the world, said Cheshire quoting Marc Andreessen, but, as his CEO Steve Willmott has rephrased, APIs are eating software.

Cheshire suggested businesses focus on one of three strategies when considering the role of APIs in achieving their business goals:

  • APIs as product
  • APIs to drive strategic initiatives
  • APIs to support core competencies.

API as product

While this is the simplest and most direct business model, Cheshire noted that less than a quarter of all 3scale's API business customers have an API-as-product model. As Tom Burnell from Axway reiterated in the afternoon session, businesses wanting to apply this model need to find a niche, but a niche where they can be a world leader. Niche leaders need to be in an industry sector where you can reuse data in multiple ways. When monetizing an API-as-product business model, simple pricing plans work best and the developer portal is the business' shop window. Cheshire told conference attendees that they must give as much care and attention to their API documentation if they are an API-as-a-product as they would put into a website front page if they were a news site.

5 strategic initiatives

But the API-as-product model doesn't fit most established businesses, who Cheshire thinks are best off thinking about what business model will work first, then identifying the API that will power that model's goals. This requires businesses to think about what is the key strategic initiative of deploying a business API:

  • Mobile enablement
  • Customer and partner ecosystem growth
  • Digital distribution
  • Powering new business models
  • Internal efficiency and innovation.

Supporting core competencies

A third approach to identifying where APIs can create business value is to create an API strategy centered around supporting a core competency of the business.

"First break it down: is the valuable core asset of your business the data, the logic level, or the presentation of data?" Cheshire asked.

"Once you know this, you can identify the stakeholders in the other two arenas that would help you complete your virtuous circle. That is, define the API strategy to capture value the most effectively," Cheshire said. Cheshire told ProgrammableWeb that this is the approach that FlightStats used successfully: "Their business model is based on acknowledging that flight data is their core competency, and they work with complementary partners to get that data into mobile applications and any application that needs arrival and departure flight information."

The full video from all NordicAPIs sessions are being published to the event's Youtube channel. Also check out similar coverage from the API Strategy and Practice conference last month.

Mark Boyd is a ProgrammableWeb writer covering breaking news, API business strategies and models, open data, and smart cities. I can be contacted via email, on Twitter, or on Google+.

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