You might have noticed in the news recently that ESPN has shut down its public API program. According to ESPN, they are trying to “better align their engineering resources with their core product development,” though the actual reason seems to be that they want better control over their unique and licensed content, and better monetization, which public APIs may not offer.
If you think that is surprising, then take a look at what Netflix did. The poster child for API programs for content distribution recently announced that they will be retiring their public API program by the end of the year. Daniel Jacobson, a visionary in the API field, suggests that their engineering resources will be concentrating on the growing number of devices and the customer base to better serve them.
And it is not just the media world that wants control of their content. Much debated healthcare API with its open innovative, experiment model is shutting those programs down too. Aetna recently announced the shutdown of its open API program. In the case of Aetna/Carepass, they had their own profit/loss as a business unit. Aetna suggests that the user adoption is not wide enough to justify their investment in the platform. But essentially, they admit that they couldn’t analyze and package the data in a way that’s going to be useful to doctors and other caregivers, which would have helped them monetize it in a big way.
But the most interesting one to me was Twitter. The “digital native” powerhouse whose business was built on public and open APIs has announced their public API 2.0 (way more restrictive towards 3rd party developers) version to better their ecosystem. Essentially, they are trying to drive more users to adopt their own channels by restricting the 3rd party users, which will ultimately result in better monetization and control.
A lot of companies are shutting down their public API programs to concentrate on their partner and private APIs. At the end of the day, when the hype dies down and when the adoption becomes mainstream, you have only a limited number of resources to do what is important for the company. As always, revenue is on top of that short list. If you can’t show enough greenbacks, your program is bound to be cut sooner or later.
Obviously, you can see a trend here. We are moving away from branding and innovation exercise/experimentation mode to profit, monetization, revenue and better control mode. I am sure that all these companies had a great strategy in place when they built these programs originally. But the need has changed over the years.
Most companies maintain two different platforms for their open/public APIs vs partner/private APIs. Obviously, it becomes very expensive and time-consuming to maintain two sets, and when the bottom line takes a hit, it is the public API program that goes away. When you turn your efforts towards a private/ partner API program, you need a platform that can offer you enterprise grade controls built into the platform. Things such as interconnecting with existing corporate systems (whether it is IT, governance, security, etc.) are of prime importance. Yet, you need to be careful so you don’t restrict your internal users and thereby kill innovation.
More importantly, you need a platform that will allow you to convert and converge your efforts into a single platform, which will give you flexibility, openness, and innovation yet give you complete control. You need a platform that can readily connect you with your enterprise systems and work in harmony with them. You shouldn’t struggle in trying to integrate your new API / digital platforms back to your enterprise. Your platform shouldn’t exist in isolation, running somewhere remotely with you having very minimal controls.
You need a platform that will help you to build for the future and be a leader, not to be a follower in the digital business.
Reach out to me at @AndyThurai to continue the conversation.