Business process API-ification: The LEGO promise fulfilled ? Tech ...

Amazon has proven that developers are happy to outsource the data center, and Salesforce has proven that end users and IT organizations are content to consume a Web-based application ? but what about all the core functions in between? Enter the providers of business process APIs. Mayfield?s Robin Vasan offers an overview of the emerging area.

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 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 Salesforce.com 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.)

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/Data.com, 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	join.me, zoom.us
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 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.

Source: http://gigaom.com/2012/10/06/business-process-api-ification-the-lego-promise-fulfilled/

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