Open and free are orthogonal in cloud computing APIs, but in this world the free aspect isn't typically interpreted as freedom, but price. Freedom in the cloud is more typically associated with data and your rights to move it from one service to another and this is a very important attribute. Application portability has also been raised as an important attribute but currently the application models are early in their maturity curve and vary from straight web programming with a REST or SOAP front end to prepackaged virtual machines to application frameworks like Microsoft's Azure and Google's AppEngine.
Open and free are both crucial attributes in order for a market economy to grow. There are many aspects of cloud computing but for the developers and users of cloud services, the atomic unit of the cloud is the API. Openness and economic growth is a deep subject that may provide clues for how to build a better cloud – in reading the linked paper, consider that a company's APIs represent the "export goods in which it has a comparative advantage". In the software industry open platforms have typically outperformed closed platforms in the long run due to the economies that develop on top of them, cementing those platforms' place in a range of markets.
Open APIs in the cloud are:
- Openly documented
- Available via self-service (i.e. developers can sign up on a website, get an API key, with no hassle)
- Using open technologies (SOAP, REST, RSS)
An easily accessible example of this is http://bit.ly. There are enterprise services that meet these criteria as well, but bit.ly is clear and can be used to understand the broader applications of APIs. Bit.ly is a simple URL shortening service that also lets you see how many people have clicked on your shortened version of that URL. It's really useful if you want to both project important articles on the web and understand the reach of your projection.
Test 1: Openly documented
- APIs are documented here: http://code.google.com/p/bitly-api/wiki/ApiDocumentation)
Test 2: Available via self-service
- Go to bit.ly and you'll be able to sign up for an account right away for their direct website
- Click the "account" button at the top right and look at the second section, "API Key"
- You can now access their APIs programmatically by using this key
Test 3: Using open technologies
- You can see this is a REST API from reading the API documentation (granted, it is a mix of verbs and nouns)
… lead to 3rd party innovation
Tweetdeck has already used this to integrate with them, so Tweetdeck users put their bit.ly API key into Tweetdeck, which then uses the Twitter API to talk with Twitter, and automatically uses their bit.ly account (indicated by the API key) to shorten URLs that are typed into tweets. It made Tweetdeck better and probably increases the traffic to bit.ly.
This could also work on the iPhone application of Tweetdeck but it's not yet implemented in the version I have. Many iPhone applications work by combining the native client capabilities of the iPhone with one or more cloud APIs that provide access to services in a clean, machine-friendly way.
From the efficiency of innovation perspective, keep in mind that Twitter never contacted Tweetdeck to use their API, nor did bit.ly (as far as I know). The Tweetdeck guys simply built a killer application that uses those services via APIs rather than scraping their web sites (a brittle and slow approach). In the last month, Tweetdeck also added Facebook and MySpace support via their APIs. Again, efficiency and reach through designing your core business service to be "remixed" is found through APIs – Tweetdeck users got new value through the app they like and Facebook and MySpace got a new stream of user-driven content, all without sales or business development teams engaging at the outset.
If we take that example and scale that across different services offered by different businesses in different industries - media, financial services, marketing, e-commerce – we see that open APIs against these services are leading to increase usage and revenue due to new innovation by their partners and customers. The classic example of this is eBay's statement back in 2008 that 60% of their traffic was coming through APIs rather than their website – 6 billion API calls per month. That API has been available since 2001, and what we're seeing in 2009 is an API tipping point as Dion Hinchcliffe articulated last November.
Coming next: Free vs. Paid APIs.