Cutter The Journal of IT Journal Information Technology Management Vol. 26, No. 9 September 2013 “One of the great things about the API economy is that it is Profiting in the API Economy based on existing business assets.... What were assets of fixed and known value suddenly become a potential Opening Statement source of seemingly unlimited by Giancarlo Succi and Tadas Remencius . 3 business opportunities.” The API Economy: Playing the Devil’s Advocate — Giancarlo Succi and by Israel Gat, Tadas Remencius, Alberto Sillitti, Giancarlo Succi, and Jelena Vlasenko . 6 Tadas Remencius, Unified API Governance in the New API Economy Guest Editors by Chandra Krintz and Rich Wolski . 12 How APIs Can Reboot Commerce Companies by Christian Schultz . 17 Tailoring ITIL for the Management of APIs by Tadas Remencius and Giancarlo Succi . 22 7 API Challenges in a Mobile World by Chuck Hudson . 30 NOT FOR DISTRIBUTION For authorized use, contact Cutter Consortium: +1 781 648 8700 [email protected] Cutter IT Journal About Cutter IT Journal Cutter IT Journal® Cutter Business Technology Council: Part of Cutter Consortium’s mission is to Cutter IT Journal subscribers consider the Rob Austin, Ron Blitstein, Tom DeMarco, Lynne Ellyn, Israel Gat, Vince Kellen, foster debate and dialogue on the business Journal a “consultancy in print” and liken Tim Lister, Lou Mazzucchelli, technology issues challenging enterprises each month’s issue to the impassioned Ken Orr, and Robert D. 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Opening Statement by Giancarlo Succi and Tadas Remencius, Guest Editors If you look at history, innovation doesn’t come just from ability to develop innovative and timely products and giving people incentives; it comes from creating environ- services. In fact, both parties depend heavily on each ments where their ideas can connect. other, while having a relatively low level of direct — Steven Johnson contact and little control over each other’s actions. One way of looking at the API economy is to consider The advantage of this arrangement is that it offers it as a combination of technological advances and new a lot of flexibility and prevents tie-ins on both sides: social and cultural trends that merged to form an inter- providers generally can change or stop an API program connected environment ripe with exciting business quite easily, while consumers have the freedom to opportunities. At the center of this fertile ground are switch to alternative APIs from other providers at Web APIs, which connect providers and consumers low or zero overhead cost. (developers) into a symbiotic ecosystem. In a sense, Innovation is taking two things that already exist and APIs connect companies much as social networking putting them together in a new way. sites connect people. However, where the latter are — Tom Freston driven by social needs, API ecosystems are based on a On the API consumer side, the API economy is all win-win scenario in which benefit is gained not only by about innovation and rapid time to market for new providers and consumers, but also by end users, who solutions. Even fresh startups with zero starting capital receive more and better products and services targeted can quickly produce new mobile apps by combining at context-specific user experiences and expectations. multiple existing APIs in innovative ways or applying Innovation is the specific instrument of entrepreneurship them in new contexts. … the act that endows resources with a new capacity to create wealth. — Peter Drucker One of the great things about the API economy is that it In a sense, APIs connect companies much as is based on existing business assets. There is no need to design new products or come up with new services — social networking sites connect people. companies can simply capitalize on their existing core business strengths. This potentially allows any com- pany, regardless of its size or actual business, to join in the new economy by exposing some of its assets to its We can see innovation not only in developed solutions partners or the general public. What were assets of and services, but in business relationships as well. New fixed and known value suddenly become a potential business models centered around APIs are appearing source of seemingly unlimited business opportunities. and evolving at a fast pace. The role of API ecosystems makes the API economy The late Steve Jobs stated in one of his speeches that quite different from a typical business philosophy. “innovation distinguishes between a leader and a fol- Companies are no longer in direct control of the out- lower.” It is interesting to consider how this applies comes of their actions — the impact of API consumers in the context of the API economy. Here innovation on the success of the exposed APIs is simply too great. becomes a shared commodity that goes in a continuous No matter how well producers prepare or how many cycle from producer to consumers and back again. So investments they make, the ultimate factor in the out- who is a leader and who is a follower in this case? come of an API program is the API consumers and their Get The Cutter Edge free: www.cutter.com NOT FOR DISTRIBUTION • For authorized use, contact Vol. 26, No. 9 CUTTER IT JOURNAL 3 Cutter Consortium: +1 781 648 8700 • [email protected] If anything can be said for sure, it is that the time of the context. Finally, the authors examine the claim that the API economy is now, and an interesting time it is. The API economy acts as a leveling factor for companies of potential benefits are many, and there are plenty of suc- different sizes.