The Web Is the Platform

The Big Idea


  • By opening up their ecom platforms to third parties, eBay and others like it allow developers to extend their functionality in ways these service providers couldn’t have imagined.
  • Developers who want to stay in the game should adopt a more architectural view of their apps. They’ll also deal with tricky new business relationships.
  • Ecom platform companies risk developers maximizing their incentive returns without necessarily providing the connected value. Developers risk being glued to one platform.

eBay's announcement late last year that it would stop charging members of its developer community for API calls grabbed headlines in the tech and mainstream press. The announcement was a battle cry in what is shaping up to be a fierce competition among online service providers for the attention of third-party app developers.

Although their business models differ, eBay, Amazon, Google and Yahoo have recognized the bottom-line value these developers can bring to their platforms. As nascent phenomena such as mash-ups and old-fashioned competition begin to blur the lines between the markets these companies serve, their ability to populate and maintain their respective developer communities could be a make-or-break competitive advantage. "All of these companies want to leverage the ingenuity of thirdparty developers to monetize their platforms," says Neil Macehiter, research director at IT industry analyst firm Macehiter Ward-Dutton. "To do that, they must establish, grow and nurture developer communities."

The basic business model of both eBay and Amazon is predicated on driving transactions through their platforms. Google is all about driving searches to generate advertising. Yahoo is a Web portal. However, the Web's evolution is making it possible—some say inevitable—for these companies to branch out beyond their initial business models.

Exactly where this evolution will allow them to go, and how they'll profit when they get there, is still not clear. The questions about business models for ecommerce platforms aren't anything new.

As Allan Vermeulen, then CTO of, put it in his keynote address at the 2003 Web Services Edge conference: "The connectivity is in place, the basic standards are sufficiently agreed upon and the building blocks of distributed software exist.

What's needed now above all is a workable economic model so that companies like Amazon and Google, who now expose their platform through Web services...can figure out how best to encourage people to use the platform in new and innovative ways that ultimately monetize for them and for us alike."

Architecting your future

Smart developers are more like architects, asserts Ron Schmelzer, senior analyst and founder of IT advisory firm ZapThink. “If you intend to continue to be a developer in the future, you are going to have to learn to build to loosely coupled service contracts,” he says. “If you don’t feel comfortable doing that, you may find that your opportunities will become more limited over time. My best advice: Become an architect. If you’re a developer, you cannot go wrong learning architecture.”

Lexicon of change

Developers’ skill sets and the idea of what software is will be transformed with the new generation of Web-based services. The definition of “platform” is changing to encompass online marketplace technologies. The evolving Web standards on which they rely, and the shift toward service orientation are altering the meaning of “application.” “If you were to ask me 5 years ago what an application is,” Schmelzer says, “I might have said that it’s something you install that has a combination of business logic and application functionality. Ask me today, and I’d have to say that it’s purely business logic. I think the application now is separate from what makes the application work.”

—John K. Waters

Buying into eBay
"The reality is, none of these companies—eBay, Amazon or whoever—can focus on every single piece of functionality or satisfy every single customer," says Greg Isaacs, director of the eBay developer program. "By opening up your platform to third parties, you allow people to build the customized products that extend the platform in ways that you couldn't have imagined, or if you could have imagined, would never have gotten to. I think a lot of the companies out there are following our lead in terms of seeing the power of this type of platform."

The eBay Developer's Program, launched in November 2000, is one of the largest and arguably most mature of the new developer communities. eBay claims a current membership of about 21,000, which is twice the number on last year's roster. The program provides individuals, businesses and third-party vendors with tools to develop solutions they can integrate with eBay's core technology. eBay estimates sellers generate between 40 and 45 percent of the company's listings using their APIs.

Vendio started developing products for the eBay platform before there was an eBay developer community. The company (formerly known as AuctionWatch) makes and sells a suite of sales management services for online retailers. It's probably best known for its popular Vendio Gallery, an interactive applet that allows eBay sellers to display pictures and links to items in their inventories.

Vendio's Sales Manager Inventory Edition, an automated sales management service, won eBay's Star Developer Award in 2005. The program is designed to allow sellers to bulk-list items, track inventory in real-time, automatically cross-sell to buyers during checkout, invoice customers, receive payment notifications, print postage and address labels, send shipping notifications and export shipping information.

"When we first got started, we were essentially a message center for sellers," says Mike Effle, Vendio's EVPof sales management. "The sellers would get together and kvetch about things they didn't like and talk about things they needed. Suddenly we realized that there was this huge need for services to help automate a lot of processes. So we started building them."

Vendio began working with eBay in 2000, when it first started building its APIs, and then became the first licensed member of the eBay developer program. With a 60-person development team serving tens of thousands of sellers, Vendio is now the largest third-party supplier of seller services on eBay. Vendio also supports sellers on Amazon, Google and Yahoo.

"I think the word that gets thrown around a lot that's not always so well understood is 'ecosystem,'" Effle says. "There needs to be mutual support between the core platform that you're developing for, the customers that you are essentially sharing and the interfaces that exist to make it all happen."

New skills and new drills
Creating APIs and making them available to third-party developers is one of the oldest strategies in the software business. However, as they employ that strategy, these ecommerce companies are helping carve a new software development paradigm, says Rob Enderle, principal analyst at The Enderle Group.

"It's a next-generation model," he says. "The first generation was based on big, centralized, monolithic mainframes. The second generation was distributed desktop computers. This third generation is a different beast. We're talking about large back-end systems again, but largely based on technology that came out of the PC world. It's kind of a blending of the two with a concept of collaboration and openness thrown in."

Essentially, the Web has become a development platform, Macehiter says. "You've got a set of services delivered on the Web—whether it's mapping services, search services, commerce services—through these APIs, which are based on industry standards, like Web services or XMLover HTTP. That means that people can actually start combining different services to create new capabilities."

They access eBay, Amazon and others provide to their core technologies, along with the support and incentives offered in their developer programs, present developers with a broad range of opportunities. To exploit those opportunities, they'll not only need a specialized skill set, they'll have to adopt a more architectural view of their apps.

The eBay Developers Program

  • Started: 2000
  • Current membership: 21,000-plus
  • Number of memberdeveloped applications: 1,600
  • Supports: Third-party application developers who want to integrate their offerings with the eBay Platform.
  • The Platform: The eBay Platform is a collection of services and technologies that supports a massive online trading environment inhabited by tens of millions of buyers and sellers.
  • Program provides:
  • Free use of eBay’s API
  • Free membership and application certification
  • Free API calls to members using the eBay unified schema
  • Technical documentation, sample code and SDKs
  • Developer forums, online training, newsletters and a member blog
  • Fee-based live technical support
  • Promotional opportunities through the eBay Solutions Directory, a catalog of thirdparty solutions
  • Annual developer conferences
  • Annual Star Developer Awards, honoring outstanding and innovative developers
  • eBay also supports third-party PayPal developers through its PayPal Developer Network

Amazon Web Services

  • Started: 2002
  • Current membership: 140,000-plus
  • Supports: Third-party developers integrating with and features and content using SOAP or XML over HTTP
  • The Platform: An ecommerce engine full of personalized logic tied into an efficient and powerful inventory and management system
  • Provides:
    • Free Amazon Web Services account
    • Free SDK
    • Access to a technical library
    • Code samples
    • Developer forums, blogs and chat
    • Reference applications
    • Web services, including:
    • Amazon E-Commerce Service
    • Amazon Historical Pricing
    • Amazon Mechanical Turk (Beta)
    • Amazon Simple Queue Service (Beta)
    • Alexa Web Information Service
    • Alexa Web Search Platform (Beta)

The Yahoo Developer Network

  • Started: 2005
  • Supports: Third-party developers tapping Yahoo’s services and content to build applications and mash-ups that integrate data sources in new ways.
  • Provides:
  • Free access with service agreement to Web services that access:
  • Yahoo! Travel
  • Yahoo! Shopping
  • Yahoo! Widgets
  • Flickr
  • Yahoo! Maps
  • Yahoo! Music Engine
  • Yahoo! Search
  • Free SDK
  • Support for Representational State Transfer (REST)
  • Limited API calls and search queries
  • Daily application usage reports
  • Developer support groups
  • “Galleries” showcasing the things developers have done with the Web services, including:
  • Maps Application Gallery
  • Widget Gallery
  • Flickr Application Gallery
  • Yahoo! Music Engine Plugin Gallery
  • Search Application Gallery
  • Developer blog page

Google Web APIs

  • Started: Currently in beta. This is not yet a true developer program, but more of a portal established to help Google explore the possibilities of supporting third-party developers.
  • Designed for: Third-party developers and researchers interested in using Google as a resource in their applications
  • Provides:
  • The Google Web APIs, which are implemented as a Web service
  • Free registration with service agreement, which allows for one account for personal use and requires Google’s consent for commercial app development
  • A developer kit, which includes some Java and .NET sample code, a WSDL file and some limited-access thirdparty libraries.
  • Up to 1,000 queries per day
  • Online developer chat
  • Limited, mail-based technical support

  • Started: 2003
  • Supports: Third-party developers building applications on the “sforce” platform that extend’s CRM using Web services.
  • Provides:
  • A free Developer Edition account
  • Free access to the sforce Web services API
  • Free toolkits, sample code and IDE plug-ins
  • Instructor-lead Sforce training and workshops
  • Java and .NET “getting started” packages
  • Monthly technical notes
  • Developer newsletter
  • AppExchange, a Webbased app marketplace where for users can shop for thirdparty apps and add-ons.

Worries both ways
The relationships between developers and ecommerce platform companies carry risks for both sides. For the eBays and Yahoos, there's a danger that developers will "game the systems," Enderle says. "The retailers are often compensated based on a series of metrics," he explains. "Sometimes it's the number of Web-page hits; sometimes it's the duration or some other quantifiable element. The more competent some of these [developers] get, the more capable they are at maximizing their incentive returns without necessarily providing the connected value. Gaming some of these services will undoubtedly become one of the next big careers."

For developers, there are the usual risks associated with being tied to one platform. Another concern is none of these companies has been supporting third-party developers for long. "The truth is, they're all pretty new at this stuff," Enderle says. "They're really just figuring out how to support these thirdparty developers. The developer should keep in mind that they're dealing with well-meaning people who haven't learned how to do this yet."

Vendio's Effle believes the new developer communities, young as they are, already have become an essential support system for the third-party software makers building solutions for these platforms. He concedes it's a complex relationship, and the boundaries can get blurred.

"Most third-party developers don't want to become external R&D for any of these platforms," he says. "We're not developing on this platform to give away our competitive edge. We're not in the idea-germination market. We want to support our sellers as much as possible. We want to provide them with unique applications that make their lives much easier--and of course recoup the investment we made to provide that application, which is what everybody wants."

Bidding on the Web

Last summer, Infopia earned eBay’s Star Developer Award in the Early Adopter category. The company’s database-driven ecom platform enables merchants to integrate Web sites with the online marketplaces of eBay, Yahoo, Amazon, Google and others.

“We definitely look at the Web as a development platform,” says Infopia’s CEO Bjorn Espenes. “The challenge is to leverage all of the components that exist out there and create specific benefits for our clients. It’s the development paradigm of the future.”

Infopia’s product Configurator, which won eBay’s Most Innovative Application award in 2004, is a Flash-based app that interfaces via XML to an Oracle inventory database. Configurator is designed to be embedded in an eBay auction listing. The seller can then use the product to up-sell and cross-sell from within the eBay listing. Inventory is presented within Configurator based on what is currently in stock, and prices are updated, added and presented to the buyer in real-time based on the seller’s preferences.

“There has always been an active dialog between eBay and us,” says Espenes. “Sometimes eBay will come to us and ask if we can help them with developing certain features or functionality to use for the platform and that may be driven from them internally, or from a seller on the platform that has a specific need.”

Cranking out Internet applets

Espenes credits his company’s CTO, Eric Maas, with crafting the architecture and methodology that allows Infopia’s six-person development team to “crank out unbelievable apps very quickly.”

“This is what we’ve been doing since the company was founded,” Maas says. “So we have a lot of in-house expertise built up. Our products have always been built to integrate with these different platforms and create applications off of them, exposing our clients’ product base to the Internet, and basically doing things that didn’t exist until we came along.”

Although Infopia develops apps for other ecom platforms, Maas believes eBay’s APIs are the best available. “Their API is as stable as our code base,” he says. “When we are integrating with it, we’re not worried about not understanding how it works, or inconsistencies, or bugs. It’s a very solid platform that enables us to build enterprise-level applications.”

Maas continues, “That’s the benefit of having such a large base and so many platforms integrating with it—software, OSes, different types of communication and,” he adds, “that makes it possible for a company like ours, which can see these creative new ways of doing business, to actually implement them, and rest assured that they will work.”

—John K. Waters

Analyst Macehiter advises developers to do background research before getting involved with any developer programs. "I'm not talking about theoretical research," he says. "Reading lots of manuals won't do. You need to investigate the sorts of services that have proved to be successful on the Web. Find out what characterizes those services. Look at the people who build third-party solutions that sit on top of Google and eBay and Amazon. Get out to some developer events. And check out the blogs associated with these development programs." The blogs, he says, are particularly rich sources of practical advice.

Vendio's Effle agrees. "The smart developers ask themselves a lot of questions before jumping into this environment," he says. "They are thinking about how they can position themselves, asking, 'How do we protect our intellectual property? How do we react to the incentives that are put in front of us?' And perhaps the most important question of all, 'Who do we think is really going to help us grow our business?'"

Finally, consider the revenue model. "There are no rules about how you can make money in this environment," Macehiter says. "You can come up with a nifty service that does something really smart, but can you monetize it? As with any development effort, if you are going to invest the time, the money and the resources to build something, you have to think about the revenue model."