3 API business-focus areas for 2020: APIs Unplugged

Following the technological trends discussed in Episode 1, Mike Amundsen (MuleSoft API Strategy Advisor) and Matt McLarty (MuleSoft Global API Strategy Leader) discuss API-related business and organizational trends they see for 2020 in Episode 2 of the APIs Unplugged podcast. These trends range from product design and product management thinking being applied to API development, to an increase in market maturity for external APIs, to a greater level of decentralization in organizations building and supporting API products. Have a listen here:

The following is a brief summary of the podcast:

Focus area #1: Product thinking

The discussion kicks off with Mike noting that there’s been an increase in product-focused discussions during his API-consulting engagements. This can come in the form of product strategy leaders driving the discussions, or even IT-only teams surfacing product management concepts. Matt relays two examples of this. First, he mentions an API workshop led by his colleague Stephen Fishman that was delivered to an audience of product pricing specialists from a large financial services organization. He then talks about a meeting he had with the CIO of a large consumer goods company who is creating a digital product team in IT. The CIO says the intent is to grow this team and, eventually, have it become its own business unit.

Despite this, Mike anticipates that it will be difficult for organizations to move from physical products to digital products. Matt reflects that much of the product management and development theory in software engineering is based on the practices of industrial product management, and contrasts the physical supply chain with the notion of a “digital supply chain.” Mike cites prototyping as a practice that can be used more effectively in digital solutions than for physical products. However, he notes the maturity of physical product markets, whereas companies are often “designing a market as well as designing a product.” To close this discussion, Matt encourages organizations to “look laterally and use analogies” from other industries for inspiration when innovating.

Focus area #2: Market maturity

The second part of the discussion keys off Mike’s point about market maturity. He references Simon Wardley’s framework of pioneers, settlers, and town planners when it comes to the adoption of new approaches. In the adoption of APIs as products, Mike sees some organizations moving past the pioneer phase into the settler phase. Matt questions whether organizations need to be pioneers before settlers. Going off that, Mike notes that in banking and payments, he’s seeing a mature API market where companies are entering as settlers. On that note, Matt brings up Visa’s recent acquisition of API company Plaid, and asks whether this is a reflection of an established industry player that was unable to build its own API products. Mike thinks it’s more a reflection of business thinking on whether to enter the market and how to enter the market; in Visa’s case, it was through an acquisition. Mike and Matt both discuss the power of Clayton Christensen’s “jobs-to-be-done” in addressing new market opportunities for organizations. Mike summarizes this approach as “be where the customer is.”

Focus area #3: Decentralized organizations

The third section examines trends in organizations building and running APIs. In Mike’s experience, many organizations are focusing on building small and empowering teams, as well as the accompanying leadership approach. “Different leadership is needed to manage a team of 50 than managing 10 teams of 5,” he says. Matt has seen the same and notes that the working teams are often a cross-functional collaboration of business and technology people although they may have a variety of direct reporting lines. Mike read an article recently talking about organizations that mimic distributed software systems. In this approach, product teams play the role of applications, shared service organizations — like HR — function as the platform, and external-facing teams act as APIs. These organizations even include the concept of north-south versus east-west communication. Matt notes the bi-directional influence software architecture and organizational trends have on each other, with Agile leading to DevOps leading to microservices leading to this product-oriented org transformation. He mentions the notion of sociotechnical systems, and the importance of systems thinking in navigating API-led landscapes. Mike brings up a link between patterns in distributed software systems and the distribution of organizational decisions. In the book he co-authored, Continuous API Management, the section on API governance goes into detail on how this process can work. Matt’s last comment to close the podcast is… “Buy the book!”

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