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APIs: A Strategy Guide by Dan Woods, Greg Brail, Daniel Jacobson

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Creating a Public API Value Chain

Public APIs have gotten the most attention, and rightfully so. Even though we believe that the most effective way to leverage an API is through internal consumption, the biggest and most powerful technology companies are able to scale public APIs in amazing ways. These rare public APIs have been used to create a whole new ecosystem, the public app marketplace. Examples include the Apple App Store, the Google Android Market, social media apps like Facebook, Twitter, and Flickr, and markets for business apps like Salesforce.com’s AppExchange or Google Apps Marketplace. Some of these API economies run on cash, and some have other motivations. The millions of apps that have been created are the most profound testament to the power that APIs can have to spark innovation given the right business conditions.

Public APIs have also created new ways to deliver business services. Amazon Web Services, the Rackspace Cloud, and many other providers offer cloud-computing services via APIs. Most of Salesforce.com’s traffic related to its CRM app comes through APIs. The same is true for eBay.

Public APIs also can be used to support crowdsourcing, innovation, and the extension of a brand or product into a variety of niches.

Here are the basic elements of a public API value chain:

The business assets

The owner of the business assets is usually seeking a wider audience for those assets. Public APIs are frequently used to extend a successful product into new arenas and niches ...

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