In a presentation to the recent Open Knowledge Foundation conference in Switzerland, MapBox CEO Eric Gundersen argued that open data business models will be an ‘intermediary’s game’: a model that will position open APIs as the key tool in creating business value.
If data is the raw material, APIs are the factory machines that transform raw material into an end-consumer product. Gundersen’s push would mean government, crowd-sourced, and company open data platforms are best placed to appeal to a business-to-developer (B2D) mindset rather than focusing directly on end customers (B2C). Meanwhile, open data platform Enigma already moves in this direction with a call for developers to create new end-products using their open datasets, accessible via the Enigma API.
Business models around open data may still be unclear, “but public/private partnerships may be a way forward”, Gundersen argued. Gundersen is CEO of MapBox, a service that uses OpenStreetMap (and the geographic opendata crowdsourced by over a million users) to create embeddable maps and tools like the MapBox API that are then sold to publishers like the Financial Times. (ProgrammableWeb’s Amy Castor gives a good overview of OpenStreetMap in her article here.) Trying to build a reputation in the geoservices industry – which is valued at $270 billion per year – the MapBox business model is being monitored by other startups and business analysts, including the Economist who are interested in whether the idea that the “transformation of freely available data and opensource projects” will allow MapBox to compete “on price, quality and technical support”.
Gundersen argues that success in the open data field will come to those who “open up data in a way that key intermediaries can use: journalists, NGOs, companies and power users”.
Meanwhile, New York City startup Enigma is doing exactly that. With an open data platform that they say draws on 100,000+ public data sources, they are making it all available to developers via their API. Developers must register and share ideas about how they plan to use the API before October 15. Winners will be given full access to the API and may receive support sourcing data not yet available in the platform’s archives.
Allowing direct community access to open data is an essential part of 21st century digital citizenry and participatory democracy, former US Federal CTO and Apigee advisory board member, Aneesh Chopra told website Government Technology. But while open government data makes governments more transparent and accountable, to put the data in citizen’s hands, he believes it is necessary for governments to also have a strong API development strategy. For example, healthcare government data that helps citizens choose health insurance providers is expected to be consumed via applications powered by the government health department’s API and not direct from the data platform itself.
How well governments and open data platforms appeal directly to developers may make the difference in both community access to the data, and the fostering of a new wave of startups and business innovation built on access to open data sources.
The New Zealand government, for example, has an all-of-government approach to cloud computing, where the bulk of government agencies are committed to moving their operations into cloud-based solutions. As part of this, the New Zealand Government’s open data solution is primarily driven by providing access to CSV files. A new government-wide CMS platform is making it easier for agencies to communicate with citizens, and no doubt will introduce more government workers to APIs. This may be a staged, capacity-building model in which the government is able to increase API skills into its daily operations in a sustainable, scalable way.
At the same time, the European Commission-funded open data platform Engage has launched in beta. At present 3,435 data sources are listed on the platform, but only 37 are accessible via API.
Open data platforms may see their future in terms of communicating with developers, rather than pursuing a direct-to-citizen approach that leaves local communities drowning in un-analyzed, disconnected and overwhelming datasets. For developers and entrepreneurs, knowing how to use free, open data to create a viable business model remains the next challenge. Models like MapBox are not just funneling the opendata via APIs into commercial products, they are also using APIs to analyze the opendata and sell the visualizations and analysis back to government agencies.
It is a model that Gundersen hopes will give innovators hope: “There is no contradiction between a for-profit company and being a leader in the open data space,” he said.