API Mutiny on Web 3.0

API developers are ready to stage a mutiny. Will the captains of Twitter, LinkedIn, and NetFlix make developers walk the plank?

During early market colonization days by Twitter, LinkedIn, NetFlix, Pinterist, and Instagram, the companies prioritize customer land grab over trade and commerce. Web 2.0 companies often choose to build distribution channels first.  The accepted navigation route includes courting third party developers with Open APIs and pseudo Open Data.   The data is freely available, readily accessible, and governed by limited commercial terms of service.   The corporate path to monetization is through advertising and light data API linking rather than building a deep ecosystem platform. However, with smart API developers creating better customer experiences and challenging revenue growth, the company captains have decided to change the terms of service and limit third party API developer participation.  All actions show the companies attempting to monetize their valuable asset and gain more gold coin, while limiting access by privateers.

To win in trade and commerce, companies must effectively own the customer relationship, establish a compelling customer destination, and inhibit disintermediation. These goals directly conflict with extending distribution channels through open and free APIs.  In a series of recent actions, Netflix neuters API data, LinkedIn shuts down access, and Twitter modifies a partnership.  Their actions create an environment where end-users will interact with the company through its platform.  The path often alienates third party developers by restricting access to high value content.  For example, NetFlix will be “removing all metadata for the rental history, recently watched, at home, etc. in all expands for all endpoints”.  If you want to see viewing history, access the information via an approved NetFlix application.   LinkedIn recently eliminated API access to potential competitors Pealk and BeKnown.

Sailing the Open Web is rapidly turning stormy and perilous due to rapidly changing business conditions and terms of service.  According to Kin Lane, “Twitter started as a truly open API, openly accessible by the entire ecosystem, and over the last six years Twitter has actively marketed its API as an open ecosystem, encouraging developers to build.”  Twitter’s history since March 2010 has been to increasingly restrict access by API developers and partners, while at the same time increasing access via user experience interfaces such as Twitter Cards. Twitter is following a strategy first outlined in the ‘Pinterest and the Money Board’ post.

An Ecosystem Platform Recommendation for Twitter

With data APIs, users are always one step removed from the platform company. Intermediary applications (between the data provider and end user) have the opportunity to reshape the customer relationship.  Rather than rely solely on data APIs, we have seen forward-thinking organizations create ecosystem platforms revolving around user experience APIs (e.g. Twitter Cards) and domain specific hosting environments (e.g. force.com). cWith user experience APIs, the platform company can create an ‘Apple experience’; maintaining customer ownership by controlling the ‘look and feel’ and by authorizing third party extensions.  Add in a 3rd party application hosting environment‘ (similar to SalesForce.com), and the ecosystem platform can manage Quality of Service (QoS), share monetization revenue, and enforce compliance regulations (e.g. PCI Security Standards, HIPAA, European Union Directive on Data Protection of 1995).

Instead of simply publishing data APIs, Twitter could manage and host 3rd party applications within a multi-tenant cloud ecosystem platform.  WSO2 clients are using WSO API Manager and WSO2 App Factory, a cloud ecosystem platform, to deploy context-aware APIs, rapidly provision 3rd party application projects, automate governance approval tasks, ensure regulatory compliance, monetize user interactions, and host applications that seamlessly extend the user experience.

The ecosystem platform environment also provides an opportunity for Twitter partners to deeply embed their business capabilities within Twitter’s application (similar to Force.com, eBay sellers, or Amazon Store environments).  By hosting all business partners as tenant applications within a multi-tenant environment, the ecosystem environment more readily aggregates and shares business information.

Our recommendation echoes the strategic direction outlined by Twitter’s CEO, Mr. Costolo.  A Wall Street Journal article states Mr. Costolo mentions Twitter’s focus is on evolving its API, or application programming interface, so other companies can build products into Twitter much like how sellers push their wares on Amazon.com.  In announcing Twitter Cards, Mr. Costolo says, “What you’ll see us do more and more as a platform is allow third parties to build into Twitter.” This is something we’ve been talking about for a while, and we’re looking forward to adding new ways for developers to do this.”

Twitter Cards is a step in the right direction. The user experience API enables developers to mash data in a manner similar to LinkedIn group posts while maintaining control over the look and feel.  Twitter Cards and the Twitter platform environment don’t yet deeply embed ecosystem partner components in a manner similar to force.com.  I look forward to seeing Twitter deliver an ecosystem platform enabling third party developers the ability to plug in analytics, marketing programs, and relationship management on top of Twitter’s valuable social graph data.

Bottom Line

While Web 3.0 increases the speed and velocity of business, fundamental business rules still apply.  Business rule number one, create a compelling client experience and solve a client pain point.  Business rule number two, own the customer relationship and establish the corporate brand.  Business rule number three, monetize the customer relationship and extend distribution channels.

An ecosystem platform enables your business to build an environment enabling customer relationship monetization, distribution channel expansion, and maintaining customer relationship ownership.  The ecosystem platform goes beyond data APIs.

We welcome an opportunity to talk with you about how WSO2 API Manager and WSO2 App Factory deliver an unrivalled ecosystem platform environment.

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