Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You: How Networked Markets Are Transforming the Economy―and How to Make Them Work for You

by Geoffrey G. Parker

The power of APIs to attract extension developers and the value they can create is enormous. Compare the financial results experienced by two major retailers: traditional giant Walmart and online platform Amazon. Amazon has some thirty-three open APIs as well as over 300 API “mashups” (i.e., combination tools that span two or more APIs), enabling e-commerce, cloud computing, messaging, search engine optimization, and payments. By contrast, Walmart has just one API, an e-commerce tool.14 Partly as a result of this difference, Amazon’s stock market capitalization exceeded that of Walmart for the first time in June 2015, reflecting Wall Street’s bullish view of Amazon’s future growth prospects.15 Other platform businesses have reaped similar benefits from their APIs. Cloud computing and computer services platform Salesforce generates 50 percent of its revenues through APIs, while for travel platform Expedia, the figure is 90 percent.16