April 2016 - SlashData Blog

New report: Open source in the Internet of Things

open source in IoT

Open Source in the Internet of Things is our new report and part of IoT report series. 3,700 Internet of Things developers answered questions regarding this issue in our 10th edition Developer Economics survey :

How mainstream is open source in the Internet of Things? Is it just for hobbyists and idealists, or is there more to it than that?
Which developer demographics use it and why?
How can I make sense of the hundreds of open source, open hardware, and open data licenses that are out there?
Should your project be open or closed? How can you use open source to achieve commercial success?

The report provides developer program managers with objective data-backed insights on the use of open source technology by IoT developers and helps them to manage its use in their projects. Find out more about the key questions that this report answers.

What can a toothbrush teach us about IoT business models?

We recently published a report showing that e-commerce doubled in popularity as a business model for Internet of Things (see Commerce of Things report for details).

But what does an ecommerce business model really mean in the case of Internet of Things? Broadly speaking, a business model describes the rationale of how an organization creates, delivers, and captures value. We add to that the question of how an organization creates a sustainable competitive advantage (a barrier to entry that is difficult to replicate by competitors).

It’s simpler than it sounds. Let’s take Oral-B, a toothbrush maker, as an example. (This example works well in our strategy workshops.) A toothbrush maker creates value by improving dental health. The value is delivered through, well, a toothbrush. The value is captured by sales of toothbrushes through retail channels. Ability to put the product in front of as many shopper as possible is of paramount importance. Therefore, access to the retail shelf-space becomes the key competitive advantage.

Can we use technology to make a better toothbrush? Of course! Let’s make a Bluetooth-connected toothbrush that comes together with a smartphone app. Now the “smart” toothbrush helps Oral-B do a better job in maintaining dental health by “focusing, tracking, motivating and sensing” (whatever that may mean).

The toothbrush is smarter, but the business model isn’t. The connected product supposedly creates more value for consumers, but all the other elements of the business model remain the same. The value is still delivered through a toothbrush device, captured by the sales through retail channels, and access to the retail shelf-space is still the key competitive advantage. Not much business model innovation here.

Source: Oral B

What’s next?… Well, let’s make an open toothbrush! Developers will use a Software Development Kit (SDK) of the open toothbrush to make apps that extend the product.

Sceptics, of course, will ask “who the heck needs developers to extend the toothbrush?” But mothers of young kids will see a sea of opportunity here: Someone can make a game rewarding kids for good job in teeth brushing and save the mom the need to “hover over their kids telling them that a couple of brushes is not good enough” (actual quote from a Slack conversation).

Now we are making progress with innovating on the business model, too. Not only do developers improve in value creation, but value is delivered through apps working in concert with the connected toothbrush. Plus, the developer ecosystem formed around our developer program creates competitive advantage that is difficult to replicate. However, we still have to make money by one-time sales of the “smart” toothbrush through retail channels.

(See “5 Ways Developers Can Extend Your Business Model” for deeper discussion on the role developers in business model innovation.)

Can we take the business model even further? Meet Beam Dental. The Ohio-based company offers a connected toothbrush that comes together with dental insurance and a subscription for the supply of floss, toothpaste, and brush heads—all delivered to your doorstep every 3 months. In fact, the offering is a recurring service that makes money outside the “toothbrush market” going beyond one-time product sales. The toothbrush itself is part of the customer acquisition costs for the much more lucrative dental insurance and dental consumables market.

Beam completely reimagines the business model of a “connected toothbrush”. The value creation is much more comprehensive and includes all aspects of the dental health. Value is delivered through insurance and re-supply service. Value is captured through making money in insurance and consumables businesses. The toothbrush and the app are “top of the funnel” consumer touch points allowing Beam to acquire new users and interact with their customers.

Notably, Beam doesn’t really compete with toothbrush makers like Oral-B. Instead, the company competes in the dental insurance market, where it has decisive competitive advantage in the form of consumer data collected by the toothbrush and the app. This data helps the company to optimise its insurance premiums and offer insurance at prices that are difficult to match for the traditional insurance companies.

Source: Beam.Dental

As simple as they may sound, the series of toothbrush examples shows that:

Technology (software, connectivity or data), when viewed as a feature of a product, is hardly a game changer for the product maker.
Opening the product to the external innovation by developers can create competitive advantage that is difficult to replicate.
E-commerce companies see devices not as source of profits, but as a part of the customer acquisition costs, serving as a vehicle for customer acquisition and engagement. (Amazon Echo or Xiaomi phones are not much different in this respect.)

You can replace the toothbrush with almost any everyday object to see how adding connectivity, developers and data can help reimagine its business model. (See this video on understanding developers.)

— Michael

How many IDEs does it take to create a programmer?

Integrated Development Environments have evolved to solve every problem a developer can have, but in recent years we’ve seen a scaling back of capabilities as developers embrace more-basic options. At VisionMobile our latest developer survey is (amongst other things) trying to find out why, though we do have some ideas on the subject.

When I first programmed a computer I was lambasted, and very nearly ejected from the school computer club, for not having written my program out on paper before arrival. Computer time was too precious to spend composing lines of code, minutes at the keyboard should be spent entering pre-written programs; not making them up as one went along.

Needless to say that was a very long time ago, and these days program composition is done using a screen (or several) with working code being thrown together in what looks suspiciously like a process of trial-and-error. The modern IDE won’t let a compiler crash for want of a missing semicolon, or the use of the Queen’s English (“colour”? Really? ). A modern IDE will spot variables using the wrong case, and APIs which haven’t been imported, reducing the development time and making life easier for the developer – but, if modern IDEs are so great, why do so many developers choose not to use them?

Vi, Emacs, Notepad++, and Sublime, all make regular appearances in developer toolkits, despite the existence of fully-featured alternatives. You might be a savant mnemonic who’s only outlets are Street Fighter II and programming in Vi, but for most humans a menu structure and “compile” button are essentials.

Microsoft’s Visual Studio is still the standard by which others are measured, though at $499 it’s not the cheapest option which may put some people off. Eclipse provides almost as much utility for a lot less money (none at all), and Visual Studio Code (Microsoft’s free code editor) is now at version 1, and also free. A licence for Sublime Text, on the other hand, will cost you $70 – so the choice is not really about money.

We know that [tweetable]developers increasingly work across platforms, languages, and sectors[/tweetable], and this may provide an answer. Visual Studio can do it all, creating applications for mobile devices, embedded technology, and cloudy servers, but so can Notepad++, and with less effort, and better support.

Take the support site for the Adafruit Trinket (a $7 prototyping board), which provides a step-by-step guide to creating applications using the Arduino IDE, so when I want to program a Trinket then that’s what I use. I’m sure that I could use Visual Studio, and it would be pretty and probably reduce my development time, but it would take effort to get it configured and I don’t spend enough time programming the Trinket to make it worthwhile.

Similarly – if I’m knocking out some Python I’ll boot up IDLE, and when I need a bit of HTML I’ll use Notepad++. These are not the best tools available, but they are the default tools and will work with every library, plugin, and extension available. If I programmed Python every day then I’d find a better tool (or perhaps a better job), but I’m too lazy to muck about getting a proper IDE configured and will make do with what’s available.

Thanks to a dot.com development career I’ve no time for debuggers or unit testing (testing is what users are for) which makes these bare-bones tools ideal for me, but what we at VisionMobile would like to know is why you choose one IDE over another, and how many you’re using on a daily basis.

When you complete our 11th Developer Economics survey you won’t just be asked which IDE you like to use, but also what you use it for, and why you like to use it. We’ll break down the data, and share information on who is using what, and why.

We’re not just collecting data on how developers create software, we’re collecting data on how developers would like to create software, and what stands in their way, so if you have 12 minutes to spare then do join us in finding out.

The Rise of APIs for Non Developers

Or why the new API evangelists might not even need to code

Some years ago APIs were clearly built and branded for developers. The marketing playbook of an API first company was straightforward: sponsor developer events and send developer evangelists around the world to attend hackathons and conferences.

But the market is maturing and what was considered as products for developers only now appeals to many more profiles. [tweetable]APIs are starting to fill the toolboxes of many marketing, sales and support teams[/tweetable]. The line between pure API and pure SaaS product is blurring and this trend will accelerate and give birth to great companies.

First lets see what are the consequences at the product and distribution levels.

Product: more touchpoints with more users

The most obvious evolution in term of product is how users can interact with APIs: before it was mainly through a terminal or an IDE (a.k.a a code editor, where developers write code) and now it’s also through platform plugins, widgets, messaging bots and drag and drop interfaces, which are democratizing the way we use APIs.
Let me take some examples to illustrate it.

Clearbit

Clearbit is probably the best example of this new generation of API startups which are built to ride this trend. It offers a classic API for developers but also many platform plugins and widgets ready to use “out of the box” for SalesForce, Slack, Google Spreadsheet, Gmail, Marketo, close.io etc… without touching a line of code.

In the same category Email Hunter is also an interesting example of an API first startup with a great Google Chrome extension.

Timekit

Timekit is an availability & scheduling API which lets you build real-time booking solutions without reinventing the wheel. Again, they offer a classic API for developers but also a ustomizable widget that anybody can use to integrate a booking calendar on their website.

Algolia

Algolia is well known for its kickass developer API (we’re proud investors) but they also recently launched DocSearch, which lets you add search to your documentation without having to dig in their API at all (you share the url of your documentation, they crawl the pages and create your search index automatically).

Tray.io

Tray.io is an integration platform for connecting the tools you use every day. It’s a good example of a well designed drag and drop interface that you use to connect tools together.

I believe that we’ll see more and more of these interfaces to configure API products. I can totally imagine such an interface for Algolia where you drag’n drop the different elements of a page you want to index on a side bar that you order (to setup fields priority), then the pages are automatically crawled and your search widget is created.

Distribution: non developers are the new API evangelists

We’ve just seen how the products are impacted but the changes are obviously going beyond product. This democratization also impacts how these startups market their API and acquire customers.
I’ve personally witnessed several startups adopting Clearbit after it was initially brought by the sales or marketing team and not by the dev team.
API marketing / acquisition will not only be about sponsoring hackathons and sending developer evangelists to conferences but also about providing value to non developers and leverage them as internal evangelists.
It’s kind of funny to think that marketers and sales can bring APIs in their companies without the approval of developers first (what the developers actually do with the IT department :-)).
But make no mistake, these [tweetable]startups need to provide an awesome API to convince developers to really close the loop[/tweetable]. Developers are of course still at the heart of these products.

Is it a real trend or fad?

I believe this is a real trend. I think we’ll see an increasing number of this new breed of API startups for which the line between pure API and SaaS is blurring. This trend is driven by several factors.
The traditional SaaS product model has limitations
In many software categories (Marketing, Sales, Support etc…) there is no shortage of SaaS. And plenty are really good.
But at the same time I’m still hearing many people complaining that SaaS X or Y is cool but does not fulfill all their needs and that they are looking for a better solution blablabla.

The truth is that traditional SaaS products cannot answer 100% of the needs of every company. This is a compromise inherent to a product model where the features are packaged and organized the same way for every customer (very little product customization).

If a SaaS can cover 80% of your needs it’s already huge. The 20% of “frustration” left are due to the fact that every company is different so you need a bit of customization. And this new breed of APIs are perfect to to cover these 20%.
This is exactly what happens with Clearbit. Most of the startups that I know and which are using it didn’t replace all their sales and contact management tools with Clearbit. They just leverage the flexibility of its API and widgets to solve the 20% of uncovered needs or to enhance the products they already use.
And this approach would be interesting for many more categories. I cannot wait to see the Clearbit of customer support (please drop me an email if you see that clement@pointninecap.com).

We’re reaching a critical mass of B2B platforms
SalesForce, Google Gmail — Spreadsheets — Docs and Analytics, Slack, Marketo… the number of mature B2B platforms is only increasing and this is great for the democratization of APIs at several levels:

As a delegated UI. APIs can reach non developer users where they already are and on interfaces with which they are already familiar.
As a distribution channel. Promoting and marketing API widgets on these platforms will be key to reach more customers.

What’s next?

My 2 cents:

We’ll see more of this new breed of APIs emerge.
We’ll see more pure developer APIs expand their targets to non developers.
Several software categories are craving for this approach (like Support, Analytics, Marketing).

As usual don’t hesitate to share your thoughts in the comments or to send me an email at clement@pointninecap.com, especially if you are an API startup 🙂

The post was originally posted on Medium.com

–Clement Vouilon
Clement Vouillon senior research analyst at point Nine Capital

Messenger vs Skype vs Slack vs Telegram: How to spot the winners

What are the relative strengths and weaknesses of Messenger vs Skype vs Slack vs Telegram? Conversational UI and messaging bots are becoming one of the defining tech trends of 2016. The idea of mobile messaging as a B2B2C channel has been proved in China by hugely popular Tencent’s Weixin/WeChat messaging platform. Messaging dominates time people spend with their phones. Why not use messaging to connect users and businesses? This approach is being imported to The West by Facebook, Telegram, Kik, and now Microsoft, all competing for the leadership of the post-app era.

The lessons learned from the iOS and Android platform wars can help us see future winners in the brewing battle of messaging platforms. [tweetable]The mobile platform war was won by the halo effect between users and 3rd party developers[/tweetable]. Users attract developers. Developer create apps. Apps attract more users, which attract more developers. A very similar dynamic is taking hold in messaging platforms now.

Back in 2011, when mobile app platforms were very new, we created a 5-ingredient framework to help our clients understand why iOS and Android are becoming so powerful so fast and why they soon to become a duopoly. The framework stood the test of time helping us predict the duopoly of iOS and Android, the fate of HTML5, and the demise of Nokia and Windows Phone. I find the tried and tested 5-ingredient framework very useful for making sense of the emerging landscape of messaging platforms.

Successful computing platforms like iOS or Android have 5 key ingredients:

Software foundations: a rich set of APIs with managed fragmentation and a toolset for creating apps and services
A community of developers writing to the same set of APIs to spur innovation and cater to diverse use cases
Distribution (reach) to millions of user across multiple devices
A means of monetization, such as payments or ads
A means of retailing content (discovery, promotion, recommendations)

Platform owners (e.g. Apple, Google, Facebook or Amazon) control their ecosystems of users and developers by means of two control points. First, [tweetable]platform owners control content creation by locking developers into a proprietary API[/tweetable]. Second, platform owners control content distribution by gating how apps are discovered by and distributed to end users.

The same exact thinking applies to messaging platforms:

The winners and losers in messaging wars will be defined by the strength of the halo effect between users and bot developers, and
The owners of the messaging platforms will battle for rights over bot creation and bot distribution control points.

The 5-ingredient framework helps to see the relative strengths and weaknesses of Messenger, Skype, Kik, Telegram and Slack platforms, as well as where these companies may put their efforts next. For simplicity, I’ll keep LINE and Amazon Alexa outside the picture for the time being.

So far the focus of Western messaging platforms was clearly on bootstrapping their developer ecosystems. This begins with publishing an open API, but the key to success is in creating a vibrant developer ecosystem around this API. Slack and Telegram are in the lead today. Facebook and Microsoft will intensify their developer outreach efforts following their API announcements. At VisionMobile we are measuring how Facebook, Microsoft, Slack, Telegram, Kik and others are successful in attracting developer attention in the upcoming 11th edition of our Developer Experience Tracker survey.

As the messaging ecosystem matures, the focus will shift to distribution, monetisation, and retailing of business accounts and bots. WeChat is already at this phase with their almost 700M monthly active users, the popular Tenpay payment network and widespread use of QR codes in China. WeChat QR codes are used to discover and register for updates from WeChat official accounts.

Facebook Messenger looks the strongest contender for the leader of Western messaging platforms, with 800M monthly active users, integration with Facebook Payments, and the expected announcement of a “bot store” at the F8 2016 conference on April 12.

Microsoft made an impressive set of announcements about opening Skype to developers, the Bot Framework, and integration with Cortana’s AI capabilities, during their Build conference in March 2016. At the same time, Skype will need a credible payment solution to compete with Messenger in the consumer market in the long run.

Telegram was an early leader of the Western messaging bot space introducing its Bot Platform in June 2015. The platform gained substantial traction with developers who created thousands messaging bots for the platform since then. Many of these bots are mere experiments and the lack of an official “bot store” reminds me of the early days of Palm OS developer ecosystem. It’s difficult to see how Telegram can escape its niche status given Facebook and Microsoft are opening their messaging platforms for developers.

It’s still very early days of the post-app era. Many questions remain. Will Apple, Snapchat, Viber or even Google join the game? Which messaging platforms will gain the most developer traction? Will discovery and recommendations of bots be done through a “bot store” or some other mechanism? What new use cases will stick across ecommerce, customer support and entertainment?

We will continue following this exciting space in our developer surveys and in our analysis of the messaging platform landscape. Stay tuned for the results of our first-ever bot developer survey coming with our upcoming Developer Experience Tracker.

— Michael

VisionMobile at Webit.Festival Europe

VisionMobile’s CEO, Andreas Constantinou will be speaking at the Webit.Festival in Sofia on April 20. He’ll be discussing “The Era of Developers as Business Model Extenders”

Digital incumbents from Amazon to Xiaomi are redefining globalisation using ecosystems, business models, and products that break industry boundaries.

Andreas Constantinou will explain how these incumbents rely on developers to extend products and business models across industries, from communications to insurance.