#open apis

[micdousmi]

LinkedIn takes aim at developers with plans to lock down most of its APIs

LinkedIn takes aim at developers with plans to lock down most of its APIs

LinkedIn has called time on a lot of third-party developers after becoming irritated by how many of them were using its open APIs.

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[manfredbo]

Open APIs: David's slingshot against Goliath ?

The $2.2 trillion worldwide telecom industry (revenues projected for 2013) is changing. Consumer behavior and demand is changing. One driver for this change -- or a consequence depends on how you see that -- are APIs.

Traditional mobile network operators (MNOs) face challenges in reacting to this change and adopting the new openness.

These difficulties are understandable. Capital expenditure is growing (eg, investments in network upgrades to 4G or LTE) while margins are shrinking at the same time.

MNOs (generally speaking) are large corporations often lacking agility. As described in my earlier post, a lot of revenue from messaging is eaten away by newcomers and disruptive forces are pushing into the traditional indisputable MNO asset: voice.

The Innovator's Dilemma is omnipresent.

A strong statement came from Hakam Kanafani (Group CEO of Turk Telekom) at Mobile World Congress 2013:

(Source: James Parton "The Effect of Software People on Telco" (slides))

It is, moreover, clear that power relations shifted. The below two figure by Paul Golding illustrate that really nicely. They show the power shift trend from MNOs (Telcos) to OEMs to Internet players finally to third party app developers -- or in other words from closeness to openness. Paul also claims that apps are now attacking all layers of the stack -- where traditionally apps were only feasible for the top layer. I would argue that the enabling concept for this power shift are APIs and would add them to the second figure below.

(Source: Paul Golding "Mobile Ecosystem Dynamics -- CTO Briefing" (slides))

So, what is it now with these APIs?

Just a passing phenomenon and no major threat? A slingshot for new entrants (Davids) to tickle MNOs (Goliaths)? Can the large MNOs leverage their tradition, heavy-weight, and still substantial cash resources to turn this round?

And what about collaboration?

James Parton (Director of Twilio Europe) in his excellent slide deck about the "Effect of Software People on Telco" (slides) describes the tension but also potential synergies between what he calls 'Software People' and traditional MNOs very well.

I also believe there are various areas of synergies where MNOs and the OTT (over-the-top) players can complement their strengths. MNOs, on the one hand, clearly can provide the infrastructure, network, quality-of-service functions, customer base, financial backing and brand strengths. On the other hand, OTTs can provide agility, speed, customer understanding, developer experience, adaptability and the 'openness' mindset.

A great case study about an MNO successfully embarking on an API venture was described by Dan Woods (co-author of the APIs Strategy Guide) in his Forbes.com article ("How AT&T Adopted APIs as an Innovation Paradigm"). Dan writes about the challenges AT&T faced in coming up with a complete strategy which goes beyond mere technology implementation. A cultural change and change in thinking was necessary.

Read more about the purpose of an API strategy in an earlier post.

Here is my key message:

Yes, I do believe that open APIs and the convergence of telco and web are a slingshot for the new Davids. Time works for them. But I am also convinced that MNOs have very valuable assets only they can provide. My recommendation for MNOs is to avoid competing with the newcomers head-to-head but instead to not see them as threat but as opportunity. It will mean giving up some control, but at the same time this will result in growth through a multiplier effect facilitated through 'retailing' via third party developers.