IDG Contributor Network: The Netflix Effect and the API Effect: Parallel paths to disruption?

The Netflix Effect has kicked off waves of disruption that are changing how the media business has run for decades. Similar to the Netflix Effect, the API Effect might fundamentally change the ground rules in the industries of companies that provide real-time communications applications to enterprise businesses. The implications for both universes have many parallels and portend possibly massive marketplace changes. 

What are the Netflix Effect and the API Effect?

What is the Netflix Effect? In the media industry it is the waves of change set off by the disaggregation of content and content production from the traditional methods of creation and distribution (cable and television networks and movie studios).

Similarly, the API Effect is when the participants in the Application Programing Interface (API) economy make it possible for enterprise organizations to buy communications functionalities that were once only bundled as part of monolithic stacks from vendors such as Avaya, Cisco, Mitel and the company that is today Unify. Traditional analogs in the content/media industry might be The Walt Disney Company, Time Warner and Comcast where in various combinations content creation and the means for distributing the content were consolidated.

How does this apply to enterprise communications?

In the content industry, Netflix, Hulu, iTunes, YouTube Movies and others employ over the top (OTT) methods for delivering content that is freeing consumers from dependence upon vertically integrated distribution companies. In the communications industry companies including Slack, What’s App and Zang are making it possible for enterprise organizations to consume functionality in an OTT model. Examples of the enterprise communications functionality I refer to are advanced telecommunications functions, messaging and collaboration. Formerly platform-based, APIs now allow for individual elements of functionality to be distributed, consumed, mixed and matched independent of a larger and more comprehensive code base within which these functions were previously embedded.