org
OPEN APIs:
TURNING BUSINESS
STRATEGY INTO REALITY
OCTOBER 2016
www.tmforum.org/open-apis
CONTENTS
Author
Joann OBrien,
Vice President,
Open APIs & Ecosystems
jobrien@tmforum.org
Editor
Annie Turner,
Senior Director,
Editorial
aturner@tmforum.org
Advisors
Pierre Gauthier, Chief API Architect, TM Forum
John Wilmes, Director, Open Digital Ecosystem Project, TM Forum
2016. The entire contents of this publication are protected by copyright. All rights reserved. The views and opinions expressed by individual authors and contributors in this publication are provided in the writers
personal capacities and are their sole responsibility. Their publication does not imply that they represent the views or opinions of TM Forum and must neither be regarded as constituting advice on any matter whatsoever,
nor be interpreted as such. The reproduction of advertisements and sponsored features in this publication does not in any way imply endorsement by TM Forum of products or services referred to therein.
EXECUTIVE
SUMMARY
Platform-enabled businesses and business models have dedicated to exploring the scale and
scope of the opportunity open to
reshaped many global sectors in the last decade and will them. Note that although the open
profoundly change many more. The purpose of this ebook APIs have been developed by
incumbent and other
is first to show how APIs are a fundamental, strategic asset communications and technology
for every business whether a startup or incumbent, a providers, their application is by no
means limited to the communications
multinational or a government department, a digital health, industry, as we show in Chapter 4.
Internet of Things/Everything (IoT/E) or smart grid provider,
among others. Read this ebook to understand:
The second aim is to show how to Amazon, among others, plus n What platform businesses are and
ensure that APIs are used consistently communications service providers why theyre successful
and strategically in support of around the world to give external
business goals. Just how fundamental organizations access to selected core n What APIs are
this is to a platform business was resources.
demonstrated by Google buying n How to use APIs to enable new
Apigee for a reported $625 million in APIs are not new they enable business models
September 2016. conversations between software
systems for a multitude of purposes. n How to implement an API strategy
Two of the most important attributes But the technology they are built on, and keep it on track
of a platform-based business are that their functions and roles have evolved.
they are modular and facilitate In particular, in the digital era, open n How TM Forums other assets can
interconnectivity with third parties. that is, publicly available, standardized work together with APIs
Modularity allows systems to be APIs have proliferated massively and
assembled, disassembled and are used by many companies, including n Why establishing a culture of
reassembled quickly, cheaply and those mentioned above, to encourage innovation is necessary for success
easily, while external interconnectivity external talent to exploit those core
allows for easy, rapid connectivity assets to everyones advantage. We hope you enjoy this primer on APIs
outside the organization. and find it useful. Many thanks to our
For this reason, TM Forums member Collaboration Community for their
APIs make this possible they are the organizations have developed a suite help in creating this publication, in
interfaces used by Google Maps, the of 18 open APIs, with more in the particular Andreas Polz from Infonova
New York Stock Exchange, Salesforce, pipeline, to open up their terrific and Jean-Luc Tymen from Orange, our
Thomson Reuters Eikon, Twitter and assets and indeed Chapter 1 is team leaders in the Open API project.
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APIs play a critical role in unlocking the n All teams will henceforth expose
usefulness of data and information their data and functionality through
assets by enabling them to be service interfaces.
combined with internal or external
assets. They allow unparalleled speed n Teams must communicate with
and scale for mashed-up services, each other through these
bringing all kinds of information, interfaces.
individuals, companies and other
organizations together for purposes n There will be no other form of inter-
limited only by imagination. These process communication allowed: no
interfaces enable the platform direct linking, no direct reads of
business model as well as other another teams data store, no
collaborative models. shared-memory model, no back-
doors whatsoever. The only
Amazons founder Jeff Bezos, was communication allowed is via service
quick to understand the power of APIs interface calls over the network.
to expand and reshape a business.
According to former Amazon n It doesnt matter what technology
employee, Steve Yegge, circa 2002 they use.
n All service interfaces, without Less downtime means lower fares are Big winners is no exaggeration: The
exception, must be designed from viable, which stimulates more profits of the top 50 publicly-traded
the ground up to be externalizable. demand. This virtuous cycle means platform companies over the last five
That is to say, the team must plan coverage becomes denser, and years, amount to over $1.3 trillion. The
and design to be able to expose the encourages others to start up largest market, North America, is worth
interface to developers in the elsewhere. Hence being able to scale more than $1 trillion measured by
outside world. No exceptions. rapidly is a key attribute. market capitalization, and arguably were
only in the first wave, with the Internet of
The mandate closed with: Everything (IoE) still in its infancy.
Morphing business models
Anyone who doesnt do this The IoE will dwarf todays person-to-
will be fired. Thank you; have Another key characteristic is that person communications market,
a nice day! platform businesses can morph or whichever prediction you believe.
grow by leveraging their assets in new According to Deloittes Tech Trends
This enabled many new areas to thrive ways. For example, Uber is planning to 2015: The fusion of business and IT, APIs
while growing the core business. For spend half a billion dollars developing are the backbone of the opportunity.
instance, Amazon Web Services (AWS) its own maps (using cameras in its cars) Whoever manages and monetizes
was born estimates put AWS value because Google Maps arent detailed the underlying services of the IoT could
at $160 billion if it were a company in enough for its future business model of be poised to reshape industries.
its own right. For a long time, AWS was using driverless vehicles for all kinds of
the only part of the company that deliveries, not just passengers.
made money. Crucially, this enabled
Amazon to invest in other parts of the
business (retail, devices, its The size of the opportunity is
Marketplace for third-party sellers, HUGE
producing TV content) that are a
longer-term play. AWS still contributes IBM describes what it calls the API In this market,
most of the profit, which bodes well for economy as a commercial exchange of if companies can
anyone looking to grow fast by opening business functions, capabilities, or overcome their
up their infrastructure. competencies as services packaged in organizational
APIs... [it] is the driving force behind much
Further, the platform business model of the digital transformation across inertia,
functions at many levels within Amazon. industries today, enabling business incumbents
For example, Inter-departmental leaders to transform their organizations, actually have
interactions work on the same basis as build new ecosystems, and monetize every opportunity
those with external parties at Amazon, core assets, services and products.
but also a third-party bookseller can sell
to be the big
through Amazon Marketplace or set up IBMs estimate is that the API Economy winners in each
its own, competing online store through will be a $2.2 trillion market by 2018. industry with
AWS, or do both. According to research house Ovum, APIs.
during the next two to three years, the
number of enterprises having an API Sam Ramji, VP, Strategy, Apigee
The network effect program is expected to increase by
150 percent.
Platform businesses benefit from the
network effect, whereby a large, well- Arguably incumbents in many sectors
managed platform community have the advantage because as Sam
produces value for each member of Ramji, Vice President of Strategy,
that community. So Uber makes hailing Apigee, explained in a recent interview
a cab more convenient. Word spreads, with PwC, The winners in the API game
more drivers sign up and more overall are going to be the smartest
passengers find a ride more quickly legacy businesses, because they have
and use the service more, so drivers an unfair advantage of decades of
waste less time between jobs. transaction data as well as other
information and data assets."
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CHAPTER 2: API
STRATEGY IS INTEGRAL
TO BUSINESS PLANNING
The acquisition cost a reported $625 Jay Barneys VRIO model (see Figure Figure 2-1: VRIO model
million and is one of Googles largest in 2-1), although created in the 1990s,
recent times. Apigee will play a vital has particular relevance when
role in advancing Googles cloud- considering which assets provide the
based services for enterprises. An greatest opportunity for sustained
article in Forbes, claimed, It will strategic advantage in a data- and Value Rareness
become the crucial bridge between platform-driven business world. Put
the massive Google developer another way, to identify the assets that
community and its cloud platform, differentiate you in the market. Barney
and concluded, This move from suggested the key criteria were:
Diane Greene [Vice President, Cloud
Platform, Google] will be remembered n Value (Is it valuable?)
by the industry as the masterstroke. Imitability Organization
n Rarity (Is it rare?)
A first step to align business and API n Organization (Is the company Source: Jay Barney, 1992
strategies should be an internal organized to exploit it easily?)
evaluation of which assets and
capabilities your organization could
make available to third parties for
sharing, reuse and/or resale, using
different partnering and business
models to create new revenue streams.
XYZ Telco's role as the B2B2X XYZ Telco's role as the B2B2X
service provider
XYZ Telcos role is to enable the partners to XYZ Telcos role is to enable, aggregate and
commercialize their offerings commercialize offerings
Scenario A Scenario B
XYZ Telco Role Partner Partner XYZ Telco
XYZ Telco as XYZ Telco as
operator /
service provider
Content
service End- Content
service
operator /
service provider End-
+ other SPs
integrated
provider
or distributor user provider
or distributor
+ other SPs
integrated user
services services
Scenario A Scenario B
customer relations are managed end-to-end by DSPs customer relations are managed end-to-end by CSP
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Co-sell Sell With I partner with a third party to deliver an offer, each party
bringing a component of the global offer.
The coupling may be weak (co-contracting / consortium) or
strong ( joint venture: a third party legal structure creation).
I maintain the relationship with the end customer and the
control of its product / service (either directly or through the
legal structure created) for the part of the offer it provides.
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Customer
Product Catalogue Customer Customer Loyalty
Management
Management APIs Management APIs APIs
Marketing
Service Charging APIs Service Inventory
Management
APIs
Service
Managemnet APIs APIs
Analytics
Service Order Service Catalogue
APIs
APIs APIs
Enterprise
APIs
Resource
Resource Resource
Management
Source: Vodafone
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2. Open APIs
The successful platform organizations
we have looked at in this ebook all have
an API strategy at their core. TM
Forums Open APIs can provide the
foundation for APIs in all kinds of
business ecosystems, whether the
Free to need is to expose core capabilities,
drive agility and operational
Use improvement, or simplify and speed
partnering. The Forums Open APIs
can save vast amounts of time and
enable interoperability across and
between ecosystems.
Strong
Community The Open APIs suite is REST-based
and available to developers
everywhere to use, underpinned by a
strong community of TM Forum
Available experts from across the globe. They
Copyleft Source enable rapid, repeatable and flexible
integration of diverse systems to make
Code it easier, faster and cheaper to create,
build and operate complex, innovative
services. These REST APIs can be used
by practically any programming
language and are also easy to test.
TM Forums suite of Open APIs can unlock a range of growth opportunities, including:
+ {open}:apis+ +{open}:apis
{open}:platform
+ {open}:platform
Eight leading technology ecosystem participants DGIT, EnterpriseWeb, Ericsson, Huawei, IBM, BearingPoint/Infonova, Oracle
and UXP Systems have officially endorsed TM Forums suite of Open APIs for digital service management. These visionary
companies follow in the footsteps of nine of the worlds largest communications service providers Axiata, Bharti Airtel, BT,
China Mobile, China Unicom, NTT-Group, Orange, Telefnica and Vodafone who made a similar commitment in May 2016.
+ {open}:apis + {open}
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The wiki-style format enables users to notate individual pages with feedback and tips, to constantly improve the
toolkit and therefore Frameworxs usefulness and applicability.
The toolkit also has a Business Scenarios Template to enable users to choose the right items for their specific needs.
Most importantly, the process for creating a scenario is built-in so the user can progress through each key phase. For
more information about the Digital Services Toolkit, contact John Wilmes via jwilmes@tmforum.org
Customers pay a fixed fee for a transaction-based fee a revenue-share model in which
using the platform is charged by the platform customers pay a share of their
provider for every transaction revenues to the platform
carried out on it provider in exchange for using the
platform services
Y
All three could be involved in a single transaction with different parties, as well as perhaps a subscription fee, such as
Amazons Prime for the end customer: Amazons sellers are the companys customers as well as the end buyer.
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CHAPTER 4: THE
INNOVATION CULTURE
While the platform architecture, API strategy and API management systems are vital
to realizing a business strategy requiring a high degree of agility, it is ultimately people
and culture that will make the difference between success and failure. As business
guru Peter Drucker pointed out long ago, culture eats strategy for breakfast.
STRATEGY
CULTURE
This open innovation has been hugely What to do right now This across-the-board discipline has to
successful at sharing ideas, skills, start now and extend to legacy systems
talent and technology across Remember Jeff Bezos edict that and services too, which can still be
collaborative teams to create new everything is to be linked via API that exposed in an intelligent and useful way
solutions to real problems. The most could be externalized for third-parties through APIs. Get started straightaway
recent winning team, Firebot based in use in future. Naturally, consumers of by joining TM Forums Open API Project
Vancouver, Canada, created an certain services will be internal team where you can help build and
application to detect forest fires customers, but all new services need to crowdsource the common APIs your
quickly and provide accurate location be constructed in this agile way to organization needs to transform to a
through crowdsourcing to reduce support the platform business strategy, platform-based business.
response times. It could be applied to which is all about being able to seize new
other types of emergency response. opportunities, create new business See the Ecosystem to Ecosystem
models and repurpose assets whether Catalyst which will be presented at TM
Click on the screen shots below to see infrastructure or data as needed. Forum Live in Asia, in December 2016.
articles about our series of hackathons For open innovation opportunities,
held around the world to see the Increasingly, organizations boundaries where you can bring your developer
diverse uses developers have come up will not be easy to recognize, as market and product teams to mash up new
with for TM Forums open APIs almost places exist at every level; consider a innovative services for your company,
all of whom were new to the Forum. bookseller who may compete against see TM Forums Open Hack series.
Amazon by being a Marketplace seller
(and so an Amazon customer too), as
well as hosting its own online store on
Amazon Web.
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APPENDIX 1: TM FORUM
OPEN API ROADMAP
Similar to the copyleft approach, all we ask is that you engage with our community
share your experiences, amendments for improvements and extensions.