APIs: A Strategy Guide

Chapter 3. Understanding the API Value Chain

Browser-based web apps represent a direct channel right from you to the consumer; consumers buy goods or services directly from you via your website. It’s important to recognize that APIs represent an indirect channel for working with channel partners (developers) to reach end users.

To really understand what we mean by an indirect channel, we need to look at an example of a direct channel. In the early 1900s, people in the New York City garment district sold clothes right from the same building where they made the clothes. That’s a direct channel. As the population moved to the suburbs in the 50s and 60s, retailers such as Sears, Montgomery Ward, and Macy’s started selling a manufacturer’s clothes as channel partners to provide distribution through an indirect channel, through channel partners.

The point here is that offering an API is not just a technology problem; it’s a people and process problem as well. This chapter describes the anatomy of this channel so that you can understand all the players and all the different pressure points.

As always in this book, we’re not just going to talk about public APIs; we’re also going to talk about private APIs that you might offer to employees, customers, or partners.

Defining the Value Chain: Ask Key Questions

In order to understand what is happening when an API is being used to advance a business, it helps to ask the following questions:

• Who is the API provider? How will the API ...