Is IoT all about low-tech and simple APIs?

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IoT is all about low-tech and simple APIs, because you don’t build software for IoT the same way you do for web apps, and here is why.

Last week, a smart lock company updated firmware that made hundreds of their own locks inoperable (more about it in the articles below). These are the kind of locks that you can open or not with an app, or via a text message. They are very useful, especially if you rent your apartment on Airbnb. You can give access to 3rd party with limited time and completely manage it remotely.

See also: How APIs could make your next car free

Until everything goes wrong because of bad software versioning. It reminds me of a talk about a seasoned software engineer that attended one of our conferences, explaining to millennial developers the way they do software is wrong in the sense that it is not made to last.

Thanks to the web, developers can push code anytime, and this fact makes us think in the short term. “Move fast and break things” as Mark Zuckerberg used to say at Facebook. We make a release Friday afternoon, and no problem, we will fix it Monday if something does not work. The web made things “not a big deal” about errors.

But it changed with more critical services like payments, and in the context of IoT, it will be even more important when you will have millions of devices dependant on your software. Will you have connectivity one a week or once a month?

You need old tech

This space engineer told us the story of embedded mission-critical software for Hubble that was designed to work for 30 years minimum without human interaction. That’s complete madness for today’s software development lifecycle.

But to have this kind of long-term reliability, you need to use old tech — old programming languages that have proven sustainability — and you need to use low tech — Low energy consumption, shorter treatment time, lower functionalities, fewer lines of code. You will not be able to fix things unless you deploy programmers in space.

So this story reminds us that yes, developing software and APIs for things is different in approach. We will need to think differently, for the longer terms and maybe spend more time thinking about how to do it, instead of trying and failing. This is counter-intuitive compared to the lean startup approach of “F*** it, ship it” but in a world where “software is eating the world,” we are talking about safety.

When the connected things are safety systems such as smoke detectors, or 2-ton vehicles like cars and pickup trucks, or medical systems, we need to be sure that they are always working, and that the software that is making them better and cheaper is not transforming them into a technical liability. With IoT, we are going back to the roots.

PS: You may be interested in our next conference in Zurich about Microservices, September 26th-27, 2017. You can check it out here.

 

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How APIs will make your next fridge — or even your next car — free

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We are in the fourth industrial revolution, where software can replicate value at zero-marginal cost and where data is the new oil. You may remember this story about Microsoft versus IBM in 1981, where IBM let Microsoft manage the operating system (DOS) thinking that the future was selling hardware? This famous negotiation deal that made Microsoft into the behemoth it is today, and was once the most valuable company of all time in 1998?

See also: Making the case for API neutrality

But value is not always where we think, and only people who understand the future will find it. For instance, with the web, the value is in the relation. Google creates value making sense between hypertext links connecting website. Facebook is creating value in understanding the relationships between people. Linkedin does the same with business relations. All of this is done with data and the interrelation of the data.

But with Internet of Things, where is the value? What if I told you the value is in the APIs?

Car manufacturers today have plans on making free cars if users accept to give away all their data to the seller. Soon, car companies will make more money by making sense of where you are and where you’re going. Just imagine, if they can monetize at 20 cents/mile, on 100,000 miles they make $ 20,000: A free car. For 30 cents/mile, they almost triple their profits and can give the car away.

Data has real value

They can collect and sell drivers’ data, traffic data, micro-location weather data, state of the road data and so on. They can sell ads on the radio or on the GPS with CPCD (Cost Per Change Direction), coupons to restaurants close to your destination, audiobooks to listen in the car — a lot of things to monetize your time and location in your car. Manufacturers will, of course, still try to sell it for some money upfront, but in the end, the price will probably depend on the data you allow to share and will tend toward $ 0 with competition and time.

By then, all connected hardware will be the same; they will be just data collectors. Google is collecting data through a search bar, Facebook or Linkedin through a web page/mobile app social profile. The next data collection frontier is hardware. Google Home, Alexa, Nest, and Fitbit will be here just to step into your everyday life to know your habits and what you need and how you need it. That is when the real “smart fridge” promise will finally happen, and it will probably be free.

So if you think the value is in the hardware, maybe you should think about controlling the APIs on top of it. After 40 years of Silicon Valley technological improvements and with China’s manufacturing as agile as ever, the hardware may be the one commodity you don’t want to invest in. Think Software. Think APIs.

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What open APIs will mean for the future of mobile payments

smart phone with credit card on global map background. mobile payments concept. vector illustration in flat style

It’s safe to say by this point that the launch of the Pay platforms, like Apple Pay, Samsung Pay and so on, haven’t exactly set the world alight.

Usage numbers remain difficult to come by, always a telling sign, and while growth may be slow and steady, it’s not the death knell for banks in the payments industry that so many expected and warned us about. Understandably many are now starting to wonder if the revolution is dead on arrival or simply on pause.

See also: Contactless payments just got easier in Singapore

The exceptions to this are of course the merchant led initiatives, like the ubiquitous Starbucks app, and similar offerings from companies like Dunkin Donuts, and Walmart Pay. That’s fine and good for very large scale brands who have the customer reach to gain that crucial real estate on a mobile device, but where does that leave the rest of the market? Perhaps more importantly, the limited success of dedicated mobile payment apps run the risk of making card issuing banks and indeed a lot of merchants complacent in their positioning as kings of the payments pile.

Perhaps more importantly, the limited success of dedicated mobile payment apps run the risk of making card issuing banks and indeed a lot of merchants complacent in their positioning as kings of the payments pile.

Mobile payments still a potential juggernaut

The threat  — or opportunity — of mobile payments hasn’t dissipated. It’s evolved into something different. The biggest shifts on the mobile payments front come from the rise of broader mobile ecosystem platforms. These are platforms that are multi-functional, mobile driven, increasingly global, and in many instances include a range of financial services embedded into another platform. While most payment executives don’t want to admit it, payments to most consumers are simply not an interesting proposition on their own and need that broader functionality to gain those critical user numbers.

The most visibly successful of these is mobile ecosystems is course Alipay Wallet, a platform that includes a host of social, shopping and other functions and holds user numbers that would make Apple’s eyes water. Rival Tencent’s WeChat Pay platform, which Ovum forecasts will reach 1.2 billion daily active users by the end of 2017, by contrast, embeds payments not only into social messaging channels but into the real world for use at the POS.

In India, we find the rise of Paytm, one of Alipay’s parent Ant Financials first big investment forays outside of China. Paytm like Alipay holds a variety of functions within the platform itself like bill payment, event ticketing and so on.

This focus on developing a broader ecosystem, lies at the heart of moves by payments providers like Visa to open up their technology capabilities via extensive API libraries. Whereas in the past Visa, or more often than not the telco’s, would have attempted to push themselves into the market as the big customer-facing brand that all other wallet participants would have to bow down to, usually for a price, they’re now moving to make themselves the centre of a broader ecosystem of developers and platforms. In essence, this is a strategic shift away from viewing

In essence, this is a strategic shift away from viewing fintechs as existential competitive threats to viewing them as partners, and avenues for further growth. The customer facing component may be weakened but does it matter if you’re still drawing the transactions?

APIs still core to new infrastructure

APIs aren’t new to financial services, and they form a core architectural component of much new infrastructure in terms of service orchestration and integration into what are typically very complex environments.

However, the regulatory mandates from the likes of PSD2 and Open API Banking Platforms are in many ways a Pandora’s Box set to open up a new wave of innovation we haven’t seen before. The hope is competition and transparency and openness will improve, but from the customer experience perspective, no one really knows what this might look like. With many banks looking to recoup their investments in things like immediate payments infrastructure, open APIs may be the lifeline they need to finally deliver truly engaging customer-focused overlay services.

For most banks and financial institutions, the shift to open APIs is more a challenge of mindset rather than a technology issue, although that also remains easier said than done. Most banks remain product-led in their thinking and are naturally conservative when it comes to partnership, openness, and sharing of data. However, as open API’s gain traction in financial services, this will likely lead to a renaissance of mobile wallet development and participation. The building blocks are now falling into place and where we go from here is anyone’s guess.

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