Service Innovation through Application Programming Interfaces - Towards a Typology of Service Designs

In recent years, many firms have published public Application Programing Interfaces (APIs). However, firms struggle with how to successfully implement API-enabled service innovation. APIs are either boundary resources through which platform strategies are enacted or they represent distribution channels for software, data, or infrastructure. We use a service innovation framework to integrate ten elements that determine business-oriented API design and that were discussed by prior API research. We report the preliminary results of a cluster analysis of 96 randomly sampled and qualitatively coded APIs. We identify three archetypes of API-enabled service innovation that are characterized by distinct configurations of API elements. We use a measure of API popularity to find structural differences of the archetypes' market impact. With our planned research addressing the interplay of API design, ecosystem-based value creation strategies and API performance, we intend to contribute to theory that explains the impact of API design on digital innovation.

[1]  J. R. Landis,et al.  The measurement of observer agreement for categorical data. , 1977, Biometrics.

[2]  Steven D. Eppinger,et al.  The Misalignment of Product Architecture and Organizational Structure in Complex Product Development , 2004, Manag. Sci..

[3]  Sandeep Purao,et al.  A theoretical investigation of the emerging standards for web services , 2007, Inf. Syst. Frontiers.

[4]  Tom Fawcett,et al.  Data science for business , 2013 .

[5]  Rajeev Sharma,et al.  Four Steps to Realizing Business Value from Digital Data Streams , 2016, MIS Q. Executive.

[6]  Ola Henfridsson,et al.  Micro-Strategizing in Platform Ecosystems: A Multiple Case Study , 2011, ICIS.

[7]  Xiaoyue Jiang,et al.  Platform Ecosystems: How Developers Invert the Firm , 2016, MIS Q..

[8]  David J. Teece,et al.  Towards an economic theory of the multiproduct firm , 1982 .

[9]  Gerold Riempp,et al.  Understanding the Economic Potential of Service-Oriented Architecture , 2010, J. Manag. Inf. Syst..

[10]  Kevin J. Boudreau,et al.  Open Platform Strategies and Innovation: Granting Access vs. Devolving Control , 2010, Manag. Sci..

[11]  Slinger Jansen,et al.  Business Network Management as a Survival Strategy: A Tale of Two Software Ecosystems , 2009, IWSECO@ICSR.

[12]  Christof Weinhardt,et al.  Business Aspects of Web Services , 2013 .

[13]  Ball State,et al.  Comparison of Distance Measures in Cluster Analysis with Dichotomous Data , 2004 .

[14]  Stephen L. Vargo,et al.  Service Innovation in the Digital Age: Key Contributions and Future Directions , 2015, MIS Q..

[15]  Angela Lin,et al.  Cloud computing as an innovation: Percepetion, attitude, and adoption , 2012, Int. J. Inf. Manag..

[16]  Michael B. Richman,et al.  On the Application of Cluster Analysis to Growing Season Precipitation Data in North America East of the Rockies , 1995 .

[17]  Ola Henfridsson,et al.  Balancing platform control and external contribution in third‐party development: the boundary resources model , 2013, Inf. Syst. J..

[18]  Ted Saarikko,et al.  Platform Provider by Accident , 2016, Bus. Inf. Syst. Eng..

[19]  A. Gawer Bridging differing perspectives on technological platforms: Toward an integrative framework , 2014 .

[20]  Kalle Lyytinen,et al.  Research Commentary - The New Organizing Logic of Digital Innovation: An Agenda for Information Systems Research , 2010, Inf. Syst. Res..

[21]  Youngjin Yoo,et al.  Distributed Tuning of Boundary Resources: The Case of Apple's iOS Service System , 2015, MIS Q..

[22]  David Reed Data smart: Using data science to transform information into insight , 2014 .

[23]  Andy Neely,et al.  Capturing value from big data – a taxonomy of data-driven business models used by start-up firms , 2016 .

[24]  Richard T. Watson,et al.  Digital Data Streams: Creating Value from the Real-Time Flow of Big Data , 2016 .

[25]  Valeria De Antonellis,et al.  A Linked Data Perspective for Effective Exploration of Web APIs Repositories , 2013, ICWE.

[26]  M. Hubert,et al.  "Finding Groups in Data": Cluster Analysis Extended Rousseeuw etal. , 2015 .

[27]  Robert F. Lusch,et al.  Service Innovation: A Service-Dominant Logic Perspective , 2015, MIS Q..

[28]  Vijay K. Naik,et al.  Riding and thriving on the API hype cycle , 2016, Commun. ACM.

[29]  Stefan Tai,et al.  The next step in Web services , 2003, CACM.

[30]  Lisen Selander,et al.  Capability search and redeem across digital ecosystems , 2013, J. Inf. Technol..

[31]  P. Hertog KNOWLEDGE-INTENSIVE BUSINESS SERVICES AS CO-PRODUCERS OF INNOVATION , 2000 .

[32]  Steffen Zimmermann,et al.  Exposing and selling the use of web services - an option to be considered in make-or-buy decision-making , 2016, Decis. Support Syst..

[33]  Ashley A. Bush,et al.  Platform Evolution: Coevolution of Platform Architecture, Governance, and Environmental Dynamics , 2010 .

[34]  Mikko Raatikainen,et al.  The Role of Platform Boundary Resources in Software Ecosystems: A Case Study , 2014, 2014 IEEE/IFIP Conference on Software Architecture.

[35]  Richard A. D'Aveni,et al.  Economies of Integration Versus Bureaucracy Costs: Does Vertical Integration Improve Performance? , 1994 .

[36]  C. Jason Woodard,et al.  Innovation in the Programmable Web: Characterizing the Mashup Ecosystem , 2009, ICSOC Workshops.

[37]  Omar El Sawy,et al.  Absorptive Capacity Configurations in Supply Chains: Gearing for Partner-Enabled Market Knowledge Creation , 2005, MIS Q..

[38]  Ramesh Sharda,et al.  Modeling brand post popularity dynamics in online social networks , 2014, Decis. Support Syst..

[39]  Sang M. Lee,et al.  Success factors of platform leadership in web 2.0 service business , 2010 .

[40]  Christine Legner Do Web Services Foster Specialization? - An Analysis of Commercial Web Service Directories , 2009 .

[41]  Rahul C. Basole,et al.  Revealing the API ecosystem and enterprise strategy via visual analytics , 2016, Commun. ACM.

[42]  Arnaud Reynaud,et al.  Measuring Economies of Vertical Integration in Network Industries: An Application to the Water Sector , 2007 .

[43]  Daniel Jacobson,et al.  APIs: A Strategy Guide , 2011 .

[44]  Eréndira Rendón,et al.  Internal versus External cluster validation indexes , 2011 .

[45]  Juho Lindman,et al.  Open Data Services: Research Agenda , 2013, 2013 46th Hawaii International Conference on System Sciences.

[46]  Sanjay Gosain,et al.  Realizing the vision for web services: Strategies for dealing with imperfect standards , 2007, Inf. Syst. Frontiers.

[47]  Amrit Tiwana,et al.  Platform Desertion by App Developers , 2015, J. Manag. Inf. Syst..

[48]  R. Willig,et al.  Economies of scope , 1981 .

[49]  Hans Georg Opening up for competitive advantage - How Deutsche Telekom creates an open innovation ecosystem , 2009 .

[50]  Amrit Tiwana,et al.  Complementarities Between Organizational IT Architecture and Governance Structure , 2010, Inf. Syst. Res..

[51]  Jungsuk Oh,et al.  Value appropriation between the platform provider and app developers in mobile platform mediated networks , 2015, J. Inf. Technol..

[52]  Thomas Hess,et al.  How open is this platform? The meaning and measurement of platform openness from the complementors’ perspective , 2015, J. Inf. Technol..

[53]  Geoffrey G. Parker,et al.  Two-Sided Network Effects: A Theory of Information Product Design , 2010, Manag. Sci..

[54]  Jerry Fishenden,et al.  Digital Government, Open Architecture, and Innovation: Why Public Sector IT Will Never Be the Same Again , 2013 .