July 23rd, 2014

Paper or Plastic? Changing Paradigms & How Service Providers Can Thrive in the App Economy

Paper or PlasticPaper or plastic? It used to be a question that was a source of discussion, debate and dilemma for grocery shoppers. In a relatively short time, at least where I live, that question simply went away. For me and most folks I see at the market now, the small fee for disposable bags had a big impact on behavior. Now, it’s a matter of getting into the habit of bringing reusable bags along. For manufacturers of disposable bags, whether paper or plastic, the world changed pretty quickly.

For service providers, I’d argue a similarly fast and fundamental change is taking place, one that’s best described as “the application economy”. If you’re working for a service provider that’s still focusing on the questions of a few years ago, there’s a good chance you’re not going to be providing answers that are relevant to your customers.

Today, applications sit at the confluence of some pretty major trends – mobility, cloud and social, for starters – and these applications are becoming increasingly vital, from a strategic point of view. The quality, innovation and value that get realized through applications will play an increasingly central role in the trajectory of a business and ultimately whether there’s any future at all for that organization. While this is true in enterprises, the stakes may be even higher for service providers.

In the application economy – and our emerging world of crowdsourcing, cloud, DevOps and wearables – what role will the service provider play? I’d argue that having a well-conceived, compelling answer to that question is one of the most vital challenges confronting service providers right now.

Whether you’re working for a telecommunications service provider, managed service provider or cloud service provider, success will hinge on how you adapt to today’s new realities. Deliver services that help your customers thrive in the application economy and your business will thrive. Fail to adapt and you’ll stand to lose business, market share and relevance.

For example, if you work for a telco, the application economy can present a clear fork in the road. One path is the status quo and while mobile traffic is growing more essential, the delivery of that service is increasingly being relegated to the status of plumbing and becoming highly commoditized. The other approach is to build on your unique advantages – to deliver the APIs and integrations that put your organization at the center of application innovation.

More and more, the best way to deliver value to customers is through applications. Harness the innovations of application developers to bring value-added services to customers. Publish the APIs that enable not only internal teams but also a range of external developers to accelerate application innovation. Further, by using APIs to provide self-service access to your service offerings, your organization can boost both recurring revenues and margins.

The battle to avoid commoditization isn’t solely a challenge for telcos either. Managed service providers and cloud providers will also find themselves in an increasingly tenuous position. If they can’t deliver a compelling application-level value proposition, they will be forced to duke it out on who can offer the lowest prices. To compete, these service providers will need to deliver more value. And applications increasingly represent the lens through which customers see and define value.

If a managed service provider only focuses on a server infrastructure but can’t help customers track the actual end user experience for core business applications, its service value will be limited. For customers, differentiators like application quality, innovation and availability will grow ever more significant. Meet this demand with high-value monitoring services and your business will be well positioned to maximize its growth potential.

For cloud providers, there is a huge opportunity in helping customers get new, higher-quality applications to market – and doing so faster and more cost effectively. Application-focused offerings will empower cloud providers to move up the value chain, become increasingly interconnected with their customers and gain stronger competitive differentiation.

To learn more about the application economy – and the threats and opportunities it presents for service providers – be sure to download the white paper How the Application Economy will Make & Break Service Provider Businesses.

June 2nd, 2014

The Consumerization of Retail

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Consumerization of RetailOver the last few weeks, I’ve been working on a couple of solution briefs that talk about “the consumerization of retail”. Odd turn of phrase, right? After all, isn’t retail all about consumers? But don’t shoot the messenger because this isn’t just a term I’ve dreamt up – it’s been lurking around for a while but now it’s quickly emerging from the dark corners of the Web.

The consumerization of retail is all about retailers transitioning to provide a single face to you, regardless of how you’re viewing them. A great example is Amazon. When I put something in my shopping cart via my desktop browser (yes, those do still exist), then grab my iPad or my Nexus 7, my shopping cart is intact – as is any list of favorites or even recent searches. So no matter what channel I use, I see a single face. Millions of smaller companies partner with Amazon, recognizing that this kind of capability means that their products might get put into a shopping cart that they might never have had access to if Amazon didn’t offer such a great partner program (exposed through APIs, of course). BTW, when I say millions, I’m not kidding. According to Amazon, there are over two million sellers in the Amazon Marketplace – 65% more than a year ago (not a bad growth rate).

eBay is another online retailer that “gets” the omni-channel approach which consumers are beginning to take for granted (an approach that will discussed in detail during our upcoming webinar). According to eBay’s 2013 Annual Report, eBay Stores did $6.7 billion in 2013, an 11% increase over 2012 – and 40% of those purchases had a mobile touch (meaning that the consumer may have viewed the items multiple times and that at least 40% of those times, mobile was involved).

Certain brick-and-mortar stores, such as Best Buy and Walmart, also understand this approach. With these retailers, you can now use your computer and/or mobile device to browse, place an order and pick up your purchase at your local store (and you can seamlessly switch from computer to device).

Why would a retailer want to allow that, instead of “trapping” you in their store? Easy: in the mobile age, consumers don’t want to be forced to continue using the retailers’ paradigm. They want the freedom to choose how they view items. How they buy items. How they take ownership of items. Consequently, retailers are finding that they have to offer this level of freedom, to stay competitive. That’s why it’s called “the consumerization of retail”. Retailers are having to accept that mobile consumers want – and increasingly expect – to take control of the shopping process.

Those retailers that adapt to the consumerization of retail paradigm are the ones that will survive (if you don’t believe me, look at the roadkill on the consumerization highway – Borders, Circuit City and Blockbuster are three examples of brick-and-mortar operations at the top of their game that refused to adapt and failed to survive the transition to the Web, which was just the first step toward the consumerization of retail).

The consumerization of retail is a rising force. Brick-and-mortar and conventional Web shopping sites that don’t embrace this are doomed to become niche (or non-) players in the next generation of online retail.

May 29th, 2014

Toward a Lean API Strategy

Books on Lean Business Strategy“Lean”, “API” and “IoT” are probably the most hyped terms in our industry right now. Normally, I tend to blog about the latter two but – for a change – I would like to balance that out by talking about the former: the concept of Lean and how it relates APIs.

You have probably heard about or even read The Lean Startup by Eric Ries. And you may have noticed that this book sparked a whole cottage industry of Lean publications, like Lean Analytics, Lean UX and the widely-misunderstood concept of “minimal viable product”.

But few of you may have ventured back to explore the texts that laid the foundation for the Lean startup. The Four Steps to the Epiphany by Steve Blank, for example. Blank outlines a business process called “customer development”, which helps startups find “problem solution” and “product market” fit. Even fewer will have ventured right back to the very origins of the Lean concept: the Toyota Lean Production System with its emphasis on pull over push and ever-decreasing batch size towards one-piece-flow manufacturing. And we have not even touched upon the “theory of disruptive innovation” that Clayton Christensen outlines in The Innovator’s Dilemma or Rita McGrath’s concept of “discovery-driven planning” outlined in Discovery Driven Growth.

But the purpose of this post is not to provide a comprehensive reading list for those of you hoping to learn more about Lean and discovery-driven business strategies. My real goal is to explore if and how these concepts can be applied to API design best practices. However, if you are curious and want to know more about the books mentioned, I suggest you head over to a blog post I wrote for launchd.io. And for your next long-haul flight, you might want to consider starting with The Goal, which will provide you with some truly novel-like business reading.

Before I explore how Lean and API design come together, let me first make a confession – I got an MBA a couple of years back. I know that this is not going to win me any brownie points and I still prefer code to spreadsheets – no contest! But it goes some way to explaining why I think business and API are joined at the hip. The business value of an API does not come from the interface’s intrinsic technical features but from its ability to provide access to a business asset or service. APIs provide a technical means to do (more) business.

From this follows the assumption that API design and implementation need to focus on the intended business outcome. Which means that you must have a clear view of your business goals before you can start to implement your strategy. Unfortunately – in my experience – most of us on the technical side are not equipped to talk to the business side of the house (and they are seldom well prepared to talk with us). This is why I went back and got an MBA – so that I could learn to speak with “them” and build better products.

Starting with Toyota’s lean product development process, I began to see approaches and tools that could help bridge the semantic gap between the technical and business sides. I plan to share some of these with you in subsequent posts. I will start by discussing Alexander Osterwalder’s Business Model Canvas. To get a little background on what I’ll be talking about in my next post, I suggest that you read this post on ProgrammableWeb, where Mark Boyd uses the Business Model Canvas to analyze Walgreens’ QuickPrints API. Also, you might want to take a look at my Lean API Strategy presentation from the recent APIdays in Berlin.

March 10th, 2014

The Internet of Things – Today

Anki Drive CarA quick intro: I’m Bill Oakes, I work in product marketing for CA Layer 7 and I was recently elected to write a regular blog about the business of APIs. I’ve been around the block over the years – a coder, an engineer… I even wrote a BBS once upon a time (yes, I’m pre-Web, truly a dinosaur – roar!) But now I “market things”. That said, I still have a bit of geek left in me and with that in mind, this blog is going to focus not so much on the “what” or “how” when it comes to APIs, their implementations and how they affect businesses/consumers but rather, the “why” (which means, alas, I won’t be writing about the solar-powered bikini or the Zune anytime soon – I mean, really… why?)

For an initial first post, I thought I’d take a look at the Internet of Things (IoT) because it’s something no one else is really discussing today (cough). We are beginning to see the actual emergence of nascent technology that can be called the IoT. First, I’m going to take a look at one particular example – one that’s actually pretty representative of the (very near) future of IoT. Yes, I’m talking about Anki Drive (and if you haven’t heard of Anki Drive, you really should watch this short video).

What’s amazing about Anki Drive cars is that they know WHAT they are, WHAT their configuration is, WHERE they are, WHERE you are… Five hundred times a second (in other words, effectively real time), each of these toy cars uses multiple sensors to sample this information using Bluetooth Low Energy, determining thousands of actions each second. Oh… and they’re armed!

Equally amazing is the fact that kids of all ages “get it”. (By “kids”, I of course mean “males” – as once males hit 15 or so, they mentally stop growing, at least according to my wife. Although, I’ve seen many women enjoy destroying other vehicles with Anki too… but I digress.) Players intuitively know how to use the iOS device to control their cars and after learning the hard way that the “leader” in this race really equates to the “target”, they adapt quickly to compete against true artificial intelligence (AI) and each other. It really is an incredible piece of work and is absolutely the best representation of the IoT today.

So, you ask: “What does this have to do with moi”? Well, imagine if your car could do this kind of computation in real time as you went to work. Certainly, Google is working aggressively on this track but Anki lets you get a feel for it today. (And I’m fairly certain Google is not going to provide weaponry its version.) Still, the real-world application of this technology is still a ways away. Let’s reign in timeframes and take a look at what is happening with the IoT in other industries today.

Imagine that your appliances knew about and could talk to each other. Google, though its Nest acquisition, is working on this with its learning thermostat. My first thought on the Nest was something along the lines of: “What kind of idiot would spend $250 on a thermostat when you can get a darned good programmable one for around $50?” But then Nest introduced the Protect. Simply an (expensive) smoke detector with CO detection built in. Big deal, right? Except that if your Nest Protect detects CO, it makes a somewhat logical assumption your furnace is malfunctioning and sends a command to the thermostat to shut down said furnace. That is the power of the IoT in the real world today. So I bought into Nest (thus answering that previous question) and, yeah, it’s pretty cool – not nearly as cool as Anki Drive but then Anki really doesn’t care if my furnace has blown up and Nest does.

As we see more and more real-world introduction of functional, useful IoT solutions, these solutions will all have one thing in common: they will use APIs to communicate. And what IoT will absolutely require is a solution that ensures that only the right devices can communicate with other right devices, in the right way, returning the right results, with no fear of Web-based (or, technically, IoT-based) threats, bad guys, MITM etc. As solutions roll out, it’ll be interesting to see how many vendors remember that security and performance are not options in IoT – they are 100% essential.