Complimentary suppliers in events and trade shows have often sought out partnerships, either informal or formal, that can benefit the shows they work for, the stakeholders in those shows, and of course, themselves.
This practice continued into the digital age with suppliers integrating their software and apps with third party developers to everyone’s benefit. Traditionally, these new relationships would be one-off deals between suppliers, often with revenue sharing or some other form of compensation between the software vendor and the third party developer.
But some software vendors are taking this practice one step further. These vendors are providing any interested third-party developer with an open or public API (Application Program Interface). An open API provides a third party developer with programmatic access to the software vendor’s proprietary software application. In some cases, the very act of integration will create an active partnership between the software vendor and the third party developer in which the developer features the third party developer as an active partner.
A software vendor’s primary goal in doing this is, of course, to add more users while keeping the current users satisfied. These partnerships add new functionality and can address niche issues raised by users at no cost to the vendor. As long as new partners are added, the software offering will continue to grow. The third party vendor is introduced to a captive audience who is predisposed to use their product because of the integration.
Some software vendors are actually creating a marketplace for its users with all of the third party developer partnerships. The only entrance fee for the third party developers is the ability to integrate with the software vendor. This is not unlike Apple’s App Store or the Google Play Store.
The ultimate question, of course, is will open integration approach be successful?
As a strategy, this hybrid market model seems to serve as another example of the successful sharing economy that has sprung up in the digital age. The host company shares digital resources with third party developers who take advantage of the resources and everyone benefits from the collaborative results. The final offering is greater than either entity could have produced for their customers and stakeholders.
This is why I think open integration will succeed.
This blog post was originally published in TeccSociety TechInsider.