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Business process API-ification: The LEGO promise fulfilled

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My previous post on the API-ification of software focused on the ecosystem of infrastructure-level APIs. Today, I want to discuss companies providing APIs that operate at the business process or application layer, which brings a whole new level of productivity and revenue potential to businesses.

Amazon(s amzn) has clearly been leading the way in API-fication by providing a broad range of fundamental software services packaged as APIs. From the basic EC2 compute and S3 storage capabilities, they have expanded to now offer more than 30 services across infrastructure categories of compute, storage, networking, database, deployment/management and messaging. All of these components are incredibly valuable and important, but an application developer still has to construct higher level business processes from these fundamental building blocks. In addition, they have launched the AWS Marketplace, which is a catalog of hundreds of software packages that cover everything from application development to traditional business software. However, this marketplace has only taken the first step in making it easy to install and deploy software applications or stacks as machine images. They haven’t yet enabled third-party companies to provide application components packaged purely as APIs.

We are still in a time of transition. More and more technical organizations are realizing they really don’t want to install and manage software — even if it is running in someone else’s data center. The preferred model is to rely on software service providers who can (and must!) deliver a high quality services. Amazon has proven that developers are quite happy to outsource the data center, and has proven that end users and IT organizations are content to simply consume a Web-based application — but what about all the layers in between?

Enter business process APIs

Enter the providers of business process APIs.  These APIs have three characteristics that distinguish them from infrastructure-level APIs:

–       They are truly plug-and-go, requiring minimal programming, and thereby approaching the promise of *legofication* that I alluded to in my last post;

–       They are usable by a broader range of developers, beyond the most technical ones, including HTML designers and higher-level coders;

–       By targeting business processes such as payment processing or expense management, they are directly linked to revenue generation.

The following table lists some of the new API services providers (APIsps) who provide packaged business process services. (Note: my company is an investor in Alfresco, Gigya, SmartRecruiters, Rubicon and Viralheat.)

Category Incumbents Disruptors
Advertising – Web Google, Yahoo Rubicon, PubMatic
Advertising – Voice AT&T Ingenio
Advertising – Social Media Facebook, Twitter Spruce Media, Unified Social
Advertising – Mobile Google/Admob, Millenial Media InMobi, inneractive, JumpTap, TapJoy, TapSense
Content – Customer D&B Jigsaw/, Factual
Content – Product IBM Amazon, Factual
Content – Sentiment Attensity Clarabridge, ViralHeat
Content – Translation Gengo, Smartling
Credit Card/Checkout Visa, Mastercard Stripe, Clover, ZooZ
Customer – Analytics Omniture, Coremetrics KISSmetrics, MixPanel
Customer – Social Identity Gigya, Janrain
Electronic Signature DocuSign, Echosign, inkdit
Enterprise – Collaboration WebEx, GoToMeeting,
Enterprise – Document Mgmt Sharepoint Alfresco, NetDocuments
Enterprise – ERP SAP, Oracle Workday
Finance – Accounting SAP, Oracle Wave, Xero, FinancialForce
Finance – Invoicing SAP, Oracle, Intuit Aria, Freshbooks, Recurly
Finance – Tax Intuit Outright, TaxCloud, Zip Tax
HR – Recruiting Taleo SmartRecruiters, TribeHR
HR – Assessment Kroll Reppify
HR – Time Tracking Kronos Replicon, Paymo
HR – Travel/Expense TRX, Concur Expensify, Xpenser
Procurement SAP/Ariba Coupa
Project Management MS Project LiquidPlanner, Trello
Social Media – Analytics Attensity NetBase, ViralHeat
Support – Call Center Genesys, Alcatel Five9, LivePerson, Olark
Support – Helpdesk Remedy GetSatisfaction, ServiceNOW, Zendesk
Vertical Solutions
Banking – Market Data Bloomberg Xignite
Banking – Loans Chase, Wells Fargo Kiva
Education – Content Pearson Khan Academy, Knewton
Education – Learning Mgmt Blackboard, Saba Edmodo, Instructure/Canvas
Education – Student Info Blackboard, Pearson Clever
Health/Fitness Nike BodyMedia, Fitbit
Healthcare – Records Mgmt McKesson Drchrono, PracticeFusion
Healthcare – Drug McKesson Drugle
Insurance – Quotes/Billing GEICO, Progressive Coverhound, Guidewire
Travel – Booking Expedia, Sabre HotelTonight, Kayak

In analyzing some of the data from ProgrammableWeb, it appears the infrastructure services are those getting the most reuse. Not surprisingly, the basic capabilities of mapping, messaging and search are the top three. However, many of these basic services are free (or very cheap), so they might not drive significant revenue. Those involving search and transactions (Amazon eCommerce and eBay(s ebay) would definitely provide more lucrative revenue opportunities. There is a long tail of services, which I simply aggregated under “Other,” but within that group are undoubtedly some high value business processes.

Moving on from packaged software to SaaS

After years of packaged software use and the transition to open source, applications seem to be well down the path of SaaS-ification, with the next wave involving the decomposition of the various application services into APIs. One of the comments (thanks Darren) on the previous article reminded me about the long path we have been on to properly package these APIs. It all started with portable DLLs and shared libs, and then we went through a bad phase with DCOM and then moved onto to XML and SOAP which were unfortunately too prescriptive and constraining. Thankfully, http and RESTful services emerged to provide a Web-style stateless approach. Each of these iterations has made it much easier for developers, but I am sure there are amazing ways to further improve the packaging and consumption of APIs. The LEGO (Lightweight Enterprise Gadget Orchestration) concept was an attempt to push the community to think about what comes next. And the NextStep Interface Builder idea that I mentioned last time is another area that a bunch of young companies seem to be exploring.

We are still early in the APIsp adoption phase. Entrepreneurs and developers should identify the top business services and work to create elegant and simple ways to drive these processes through code and beautiful end-user experiences.

Robin Vasan, managing director at Mayfield, invests in cloud, SaaS and mobile technologies. Some of his current investments include Alfresco, Couchbase, Marketo, Centrify and Webroot. Past successes include Akimbi, Trigo and webMethods. Mayfield has also been involved in such other leading companies as 3Com, 3PAR, Citrix, Concur, Legato, Nuance, Tibco and Vantive.

Image courtesy of Flickr user kennymatic.

13 Responses to “Business process API-ification: The LEGO promise fulfilled”

  1. This is a very comprehensive article and a great list of important business APIs (that will surely influence our development roadmap) . Most of the SaaS enterprise vendors already expose their APIs publicly and many of their clients and integrators are using them to build custom business processes.
    There are integration platforms as a services platforms (iPaaS) that help companies build simple standard processes on top of APIs in just a few clicks and very little cost (e.g CloudWork This will contribute to the “legofication” of enterprise software (or lack of!). Maybe a topic for the next article?

  2. Dave Duggal

    Great post. I’m glad people are picking up on this logical uncoupling of business processes for greater personalization and adaptability.

    We have this today – The world’s first enterprise-class application platform built on a Web-style (REST) architecture. Better still – we can wrap APIs and Services in RESTful ‘adaptors’ to govern them. Ideate supports local and federated processing of diverse and distributed Resources on-demand. Event-driven business process for the real-time enterprise!

    Multi-tenant, lightweight, small footprint, stateless, scalable – The future is here.


  3. Dave Duggal

    Great post. I’m glad people are picking up on this logical uncoupling of business processes for greater personalization and adaptability.

    We have this today – The world’s first enterprise-class application platform built on a Web-style (REST) architecture. Better still – we can wrap APIs and Services in RESTful ‘adaptors’ to govern them. Ideate supports local and federated processing of diverse and distributed Resources on-demand. Event-driven business process for the real-time enterprise!

    Multi-tenant, lightweight, small footprint, stateless, scalable.

    Bootstrapped and already profitable company with enterprise customers and partners on four continents.

    The future is here.


  4. There’s also a concern about storage of your company data. If there’s a big discussion around geography in relation to cloud computing where you have much more control over the systems your data is stored on, just getting API endpoint access with no internal visibility for deeper business applications is likely to be even more of a concern!

  5. Robin – great piece. We agree that business process APIs is a huge factor in the ability of applications to becoming relevant, and ultimately profitable. Hope you’ll check out our overview of your piece – we’re getting it out to our user and partner community since it nicely describes your thoughts and how it applies to their API strategy and development (“The Action is Heating Up for Business Process APIs – ). The API lifecycle has to be managed just like any other lifecycle and requires comprehensive API management solutions for large enterprises providing APIs and for developers consuming API.

  6. Gustavo Lopez

    Darn! What a shame that every methodology used before was so deficient, and we have finally found the light. This will definitely be here to stay. 20 years from now we will never say that APIfication was just a fad.

  7. Aaron Rudger

    The benefits to leveraging external services to accomplish business processes like the ones you mentioned are clear. However, with each interface comes a dependency, over which you have little control. Change management is an issue, as is availability and performance–especially as the service gets pushed up to end users higher in the enterprise. Monitoring these interfaces individually will also become an important consideration. Our take here:

  8. Observer

    I have been thinking of the way this information is organized – does this mean that all of these companies are providing APIs? And how the incumbents and disruptors classified – for instance if Jigsaw/ or Xignite are reselling data from companies like D&B and Thomson Reuters then how would they be regarded as disruptors of those very busineses???

  9. Good foundational and conceptual article. Great reference. Now if only all of these platforms had proper APIs to really intgrate yours and others’ packages into them. Holding my breath a bit for now.