APIs; The next revenue stream

DataEven though large institutions have a lot to fear from small disruptive start-ups who can easily replicate business models with agile new technology stacks, they should also embrace them. In the world of “Apps” Data is still king and as we place a greater reliance on Apps when using smartphones, tablets etc. the one thing everyone needs access to is data and in this world this is not necessarily free. There are numerous companies who are supplementing their revenue models by selling their Data (or in fact our data) through APIs to other companies who require it. It is said that Salesforce generates nearly 50% of its annual $3 billion in revenue through APIs and for Expedia the figure is nearer 90% of $2 billion. There is also a frenzy of acquisitions of companies that manage APIs for Clients due to this current cash cow.

Big Data was initially thought of as a way for companies to exploit the data they hold on their customers to get a greater share of their wallet, however new revenue streams are now unveiling themselves for the surplus data. Today maybe a greater profit could be made by actually selling the plethora of unneeded data sitting dormant in databases than constantly targeting / alienating your current customer base. With the advances in technology every enterprise should be thinking of how they could monetize big data especially in respect of APIs as there is a long list of successful companies who are currently doing this and in the short term this could prove very lucrative.

 

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Author: Steve Wakefield

Steve Wakefield is an experienced Innovator presently based in London.

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