API alliances are partnerships between platforms that interchange API protocol information in order to make sharing data easy to access, extract, and manage between two or more sources and/or organizations. API alliances have the potential to drive business opportunity, cost reduction, and analytics in a number of sectors through scalable transfer of information across multiple organizations.
APIs are broken down into three tiers, which rank from high-security, in-house keys to open-source public access. The three tiers from secure to public are internal APIs, partner APIs, and public APIs. API alliances fall between partner and public, with organizations and platforms opting into the alliances.
Several of the APIs used for internal and partner platforms can be opened to the public for greater use by third-party developers. This allows telecommunication providers to further monetize their data and network, while leveraging new revenue streams.
Open access to telecommunication offers and plan data can be used by comparison applications and help drive more subscribers to the provider. Opening up APIs that securely expose user phone number and messaging can allow organizations to charge all third-party applications that use two-factor authentication via OTPs.
Many telecommunications enterprises are already participating in or planning to participate in the API economy. Potential use cases for API alliances include:
• Identifying the common business drivers for API initiatives
• Describing an API identification methodology
• Supplying telecommunications-specific examples using the
methodology
• Discussing the current state of regulatory requirements and
industry standards
• Providing recommendations for starting an API initiative
Several similar revenue options can open up for telcos with public APIs. However, a single telecommunication company may not have enough scale or access to data to become a truly game-changing resource for service providers by itself. These high-complexity API products often can benefit from co-development models with a greater resource pool. These cases drive CSPs to join together on a federated API platform, forming an API alliance.
API alliances can benefit telecommunication companies in a number of ways, most notably the scalability of operations. Normally, limiting the size of alliances is understandable due to the need to negotiate complex terms of engagement along with how revenues, physical assets, and data will be shared. The management of shared assets and activities can become complex, especially with added human interaction. In addition, sharing physical assets and integration of data usually demands substantial investment that is typically specific to each relationship. As a result, as the number of traditional alliance partners increases, the cost and complexity of data integration escalates non-linearly.
API alliances nullify these negative aspects, due to the terms of engagement and revenue sharing being highly automated. Informational assets replace physical assets as the key resources shared, and data-integration investments don't need to be relationship specific. For example, Expedia's publicly described APIs (Expedia Affiliate Network) make it possible to integrate data across numerous partners, which include almost all competing airline companies and thousands of hotels, resorts, rental car companies, and payment-service providers. There does not need to be any limit on the number of partners signing up. In fact, the more partners that sign up, the more Expedia benefits, with marginal, if any, increase in costs and complexity.
Companies frequently forge API alliances to gain flexibility and share risks in new ventures or to leverage complementary resources. Traditionally, implementation costs associated with such objectives and the fact that not all companies are suited to share risks or offer complementary resources restricts firms to working with a narrow set of partners.
These dimensions of APIs take business partnerships to an entirely new level, by revolutionizing traditional business alliances and partnerships through scalability, flexibility, and fluidity. As a result, API Alliances have the potential to create huge improvements to business segments and innovation.
Telecoms operators have spent several years trying to decide whether and when to develop their own open APIs.
Most telecommunication organizations today are at the initial stages of API maturity, with a broad vision and some basic APIs at play. Some have an API platform, exposing internal APIs like messaging or payment for third-party providers. However, a large challenge is scaling API programs, unifying different development tracks, and moving them to a federated API platform. For this, organizations and providers have to look for experienced teams that can take them from separate system operators to unified API members.
