TechZine – Alcatel-Lucent

Business

Open APIs Transform Business Models

Highlights

  • Open API initiatives benefit service providers, developers and end users
  • Business models for revenue sharing tell a convincing story
  • Breaking industry fragmentation and cost barriers increases innovation

Giving everyone what they need to succeed

Platforms that offer open Application Programming Interfaces (APIs) to developers signal the dawn of a new technology era. They will reshape businesses and relationships. Enhanced applications and services will emerge and new ventures and partnerships will form. Revenue sharing and customer sharing will become common and the industry will be better for it.

Open APIs give developers capabilities to build enhanced applications and services. It’s a little like LEGO ® pieces that come in different sizes, shapes and colors — each API offers a different capability. Developers can combine those capabilities in any way they want. The greater the capability library, the greater the developer creation can be.

We’re going to see enhanced applications and services we could never have imagined. Service providers can use these enhanced applications and services to attract government, industry and consumers. And they gain an important new business partner — the developer.

Service providers need developers. They are now the most important player in the value chain. People want the enhanced applications and services developers create more than they want a particular device or service provider.

Developers also need service providers. Most simply do not have the resources for wide-scale sales and distribution. Service providers are already selling to industries, governments and consumers. More appealing enhanced applications and services mean more sales and more sales lead to more revenue ― for service providers and developers.

Ecosystem benefits abound

At ZOS Communications we are allowing developers to leverage our geospatial platform to enable location in a number of markets and applications with our open API. This is where our vision matches the Alcatel-Lucent vision for the Open API Service. The offering gives developers access to network and third-party technology through easy-to-adopt bundled API solutions with no upfront investment.

As a small, young company the resources, relationships and credibility the Open API Service brings to us is tremendous. It means:

  • Distribution and scale . On our own, we could not scale to distribute our client software to all mobile devices, but client distribution is critical to our success. It’s what enables us to be agnostic across service providers and operating systems. The Open API Service distributes our client software to service providers. Then we provide the location API for that device to developers. It’s an extraordinary opportunity to benefit from the reach of the Open API Service.
  • Quality assurance (QA) . Our architects work with Bell Labs architects to ensure our technology is robust and continuously evolving to meet very high QA standards. We would have a very difficult time raising enough capital to cover the level of QA required by industries, governments and service providers. So this is a huge advantage for us and a significant savings.
  • Recognition and respect . The Alcatel-Lucent brand name behind the Open API Service brings credibility. It makes our location API more attractive to service providers and enterprises that are not familiar with ZOS Communications. When we tell people we understand service level agreements (SLAs), it has meaning because we are an Open API Service partner.
  • Relationships and innovation. The Open API Service team is extremely well connected. They are out there talking to different industry players all the time and bringing back great ideas that make people get excited. We can then convert those great ideas into real products.

Numbers talk

As an open API provider, we are already seeing the benefits of the creative development ecosystem. New business models and new relationships are helping us build our business. And they are helping us bring more value to the industry.

When we show customers realistic revenue models involving open APIs and realistic business cases with proof of revenue, they are very positive. They can see the amount of revenue that can be generated by a particular capability and what their percentage of that revenue is. That makes for an easy decision.

Revenue sharing is a far better option than no revenue. Everyone is rewarded for the value they bring to the equation. It’s a major step forward from just a few years ago.

Evolving from fragmentation

When we looked at the market opportunity for location-based services in 2007, as a location API provider what we saw was extreme industry fragmentation.

There were many ideas for enhanced applications featuring location-based services. Some that would automatically open your garage door when you approached. Others would turn lights on when you entered your house. Others included sending a coupon for a nearby store to your mobile phone. But barriers among service providers, geographies, operating systems and handsets meant these enhanced applications could not become a reality.

We also realized that the high cost of accessing capabilities was stifling innovation. We could build enhanced applications that track the location of thousands of visiting nurses or hundreds of delivery vehicles. But with a cost of 2 to 6 cents (USD) per location call, it made no financial sense for customers to purchase it. You could not build a business.

Our vision is that capabilities, such as location APIs, should be free to developers. Location should be as precise as possible. It should be device-agnostic and service provider-agnostic. That way everyone can access location capabilities on any device. Developers will include more innovative capabilities in their enhanced applications, thus uptake of those enhanced applications will be higher. When the ecosystem grows, the whole market grows.

Location-based services are about more than just updating your social networking status. Location equals relevance. Every industry has mobile location requirements. Our goal is to be the relevance provider across industries. We look at how you layer the location component into all connected technology. With this approach, enhanced applications for field-force tracking, automation and personnel routing can become a reality.

Expanded opportunities

The Open API Service is opening many new doors for ZOS Communications. Our capabilities to create events, geofences and triggers are much more widely used. New business cases and custom solution opportunities are coming our way.

Seeing our location API incorporated into enhanced applications has started other companies thinking. They recognize the potential to use the location API for different applications. Maybe it would be for a severe weather alert to a geofenced area or for a mobile marketing or property management application. Whatever the use, it certainly has people thinking about the possibilities.

I look forward to a future where we will also work closely with other Open API Service partners to combine their APIs into our offerings. Developers will have even greater capabilities to incorporate in their enhanced applications. These great capabilities will lead to great applications.

To contact the author or request additional information, please send email to techzine.editor@alcatel-lucent.com.