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Internet of Things Leads to the API Economy By @EsmeSwartz | @ThingsExpo #IoT #API

The evolution from M2M to IoT is also driving a new focus-to software and Application Programming Interfaces (APIs)

In last month's #IoTuesday Twitter chat, we explored findings from Cloud Expo 2015 and @ThingsExpo 2015 as the industry came together to explore the impact of Cloud and Internet of Things (IoT). Sensors, processors, software, and connectivity in things, otherwise known as computers inside products, coupled with the cloud to store massive amounts of data and analytics that turn data into information are transforming entire industries and radically impacting the performance and function of not just things but of entire value chains.

Ericsson, whose networks control 40% of the world's mobile traffic, predicts that by 2020 there will be 26 billion connected devices, including smartphones, cars, appliances, tablets, monitoring sensors on industrial machinery and other things, connected to the Internet. The scale of a globally connected society means more GSM cell towers and more networking equipment, but the evolution from machine to machine (M2M) to IoT is also driving a new focus-to software and Application Programming Interfaces (APIs). While hardware remains important it matters differently than it did before and is at the edge of IoT while software is at its core. Enabling technologies like cloud and Big Data share a stage with Web APIs, or more specifically developer-friendly REST APIs along with API management. APIs are not just important for connecting devices, but also the part they play to connect applications serving a single purpose or as part of an aggregate role in a horizontal ecosystem.

Productized APIs Creates API Economy and Marketplaces
Manufacturers of things are increasingly driving innovation through an IoT developer stack that attracts an ecosystem of partners that leverage APIs for building applications for a marketplace. With IoT, manufacturers can't just make things; they need to enhance the role of those things through software across the value chain. APIs are the glue that integrate massive amounts of data and through a wide variety of applications, enable companies to transform into digital enterprises. Things become repositories for data that enable manufacturers to make informed decisions, but business leaders are just beginning to appreciate the extent of the opportunity, which includes connected device applications in sectors ranging from manufacturing to mining, agriculture to energy, and transportation to healthcare. The Internet of Things will rearrange entire supply chains from production through consumption. The role of open standards that help establish new partner ecosystems will be crucial for adoption across different verticals.

Devices have little value unless they have applications. Apple was one of the first companies to demonstrate an alternative and lucrative way to build a walled garden. In the mobile world, users of iPhones are pretty much limited to the apps chosen by Apple and offered in the Apple App store. Apple created the first smartphone developer network around iOS. Developers are attracted to develop applications for Apple devices before Android devices because Android implementations vary based on device manufacturer; Apple's iOS provides a larger common device installed base. By and large, those Apple-selected apps, which often dominate the users' experience, define the providers that the iPhone can access. Most people live quite happily within the walled garden of apps approved by Apple. Apple led the way in circumscribing user behavior in this way, but the fashion quickly caught on. Android users have the Google (Play) store, and Windows Mobile users have the Windows Phone Store.

Interestingly, Linux users were the first to experience the app-store approach. Some Linux distributions have long provided their users with an easy route to install approved applications from on-line repositories; although non-approved apps are still available, it's just harder work to get them. With the releases of Apple OS/X (Snow Leopard onward), the default way of buying software is via the Apple store; buying direct from a third party vendor is starting to feel like a rather exceptional thing to do, as users are challenged when they try to bypass the store and have to tweak some security settings to make it possible to install a non-official app. From Windows 8.1 onward, Microsoft Windows users also had their own App store too.

Companies like Apple, Google, Microsoft, and the open source community aim to make life simpler and easier for users, and at the same time create a user environment that is more structured, and controlled. These companies and communities are not forcing users into their walled gardens. They are enticing users to come inside and be safe and comfortable. For most ordinary users, this is seen as a fair trade: a win-win situation. Users can always take a walk in the wild woods outside if they want to, it's just that increasingly they don't want to. How will IoT ecosystems evolve? Do we need to reinvent the wheel or do we already have a formula to emulate? Follow us on Twitter and join the discussion as we explore this topic in our next #IoTuesday Twitter chat being held on July 14 at 1:00pm EDT.

More Stories By Esmeralda Swartz

Esmeralda Swartz is VP, Marketing Enterprise and Cloud, BUSS. She has spent 15 years as a marketing, product management, and business development technology executive bringing disruptive technologies and companies to market. Esmeralda was CMO of MetraTech, now part of Ericsson. At MetraTech, Esmeralda was responsible for go-to-market strategy and execution for enterprise and SaaS products, product management, business development and partner programs. Prior to MetraTech, Esmeralda was co-founder, Vice President of Marketing and Business Development at Lightwolf Technologies, a big data management startup. She was previously co-founder and Senior Vice President of Marketing and Business Development of Soapstone Networks, a developer of resource and service control software, now part of Extreme Networks.

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