Technology rules the world now. In this week’s IT quotes roundup, we take a look at how this power can be used for good – and not so good.

“It looks flat and muddy and not crisp at all.”
- Jon Hassell (@jghassell) in one of many tweets regarding Windows 8, which was released to manufacturing this week. Check out the whole Storify of his experience – you’ll feel like you downloaded it yourself (and if you already did, tell us what you think).

“It’s so cheap that you can afford to throw away 99.9 percent without looking at it.”
- John Villasenor, an electrical engineer at UCLA, talking about the (lack of) cost of data storage, and what that could mean for government surveillance. Sharon Fisher has more on the worrying trend.

“If you control how somebody pays for something, you control a lot.”
- A CIO of a large credit union, discussing the rise of payment applications like Square. Believe it or not, this could have major implications for the enterprise computing industry. And hopefully, the credit card industry.

“Of course, they’ve always had this power. But now we know that they’ll use it in ways that we really don’t agree with.”
- Instapaper creator Marco Arment, commenting on the recently announced Twitter API changes that give the service “wiggle room” for revoking access for those using its platform. The change – which has been met with scorn among many developers — continues what’s already been an interesting summer for APIs.

I asked Sacks why someone would choose Yammer or Salesforce’s Chatter above an intranet system, and he cited the distaste for accessing a “social network embedded inside a line of business tool.” Rather than separating departments, products such as Yammer offer “private, secure social network for the entire company.”

I was curious about how IT departments feel toward products such as this, given its usual suspicion for anything “social” or consumer in the network. Sacks pointed out that IT has been embracing the cloud. During his panel, another panelist accused Yammer of being insecure because of its position in the cloud. Sacks’s response was that he “hoped we’d moved past the point where anything cloud-based is considered insecure,” prompting applause from the audience.

With announcements of expanding communities, Yammer has moved beyond internal, allowing companies to create groups for each of their clients or customers. Future plans are to integrate a social layer atop and across all areas of the enterprise, from content management to finance.

What are your thoughts on socializing the enterprise? Would you prefer using a product such as Yammer that includes an API or build your own?

Leave your thoughts and questions in the comments section or email me directly at Melanie@ITKnowledgeExchange.com.

Melanie Yarbrough is the assistant community editor at ITKnowledgeExchange.com. Follow her on Twitter.

Today’s successful companies are those that embrace the API economy to expand their brands and create new opportunities for engaging with customers. In this final piece, we’ll discuss how creating new distribution channels via APIs rapidly creates more opportunities to sell products, reach new audiences and create new markets. Delivering content via multichannel strategies is the ultimate way to ensure that you are accessible how, when and where your customers want you to be.

Focus on Developer / Partner Adoption

The minute we decided to build and publish the API service, we knew we had to build in such a way that allowed our development partners (mobile device and set-top box companies) to adopt it easily and ramp up fast. We kept the APIs simple, only exposing what the partners needed. And we built the API service just as we would a GUI-based application, making sure that the use cases and the error handling were well thought out.

Once you achieve success with the initial applications, you can think about extending the reach of the API set to more developers. In e-commerce, we are all familiar with the affiliate model, where we rely on aggregators such as Commission Junction to deliver traffic to our online stores. Vendors such as PayPal are also enabling third-party developers to build payment solutions on their API platform. In our case, by opening our API service to a greater developer network, we enabled movie review websites and entertainment-oriented Facebook apps to begin using our movie library.

Continue to Protect Your Organization and Customers

Being conservative when it comes to technology adoption is not a bad thing for retail organizations. After all, we want to protect our customers who entrust their private and transactional data with us and mitigate our company’s risks.

As we stitched together new business solutions from existing ones, we continued to verify that the high standards we hold ourselves to in matters of data security, transactional scalability, and consumer privacy are continuously followed. In terms of credit card / transaction processing, we were really sensitive about complying with the PCI standards set forth by the credit card associations. Just because our apps were built quickly with minimal cost didn’t mean we could side step any security and privacy regulations or best practices.

Conclusion

Even though retailers have limited budget and no additional manpower in this recession, they can still innovate and deliver applications that meet customers’ demands for access to product information and the level of collaboration they demand with their social networks. The keys are to act fast; leverage existing enterprise software and data assets; and pragmatically tap into existing cloud computing and API-enabling technology offerings that can help us meet customer, competitive, and marketplace challenges.

Since the arrival of online commerce 15 years ago, there have been few technology trends that have the potential to revolutionize the retail industry like the ones we see in mobile computing, social networking, and cloud computing. Today’s piece looks into the ways that retailers can shed a more conservative, traditional mindset and embrace new ways for deploying new apps, delving into practical insights for creating innovative, API-enabled applications. More specifically, how leveraging the move to the cloud can serve as the smartest decision in blowing out one’s API strategy.

Think Modular and Act Entrepreneurial, on the Cloud

Many retailers are very conservative when it comes to technology adoption, and they to closely control where new apps are deployed. Due to our limited budget, we didn’t have a choice but to embrace a new way for deploying the new apps.

Had we done it the old way, we would have acquired and configured the database, application, and web servers ourselves. We would have had to negotiate a long-term hosting agreement worth millions of dollars, and the agreement would have to go through a lengthy legal and executive approval process. Instead we acted like a startup and launched our API service and the API-enabled applications on the cloud, outside of the confines of our firewall, with the help of a technology partner. We bought capacity only to the level that we needed and as the services gained customer adoption, we added more. With this strategy, we were able to avoid high, upfront fixed costs and turned them into variable expenses.

Don’t Build Everything from Scratch

Some retail technologists see any initiative as an opportunity to re-engineer and rebuild. We didn’t have that luxury. We also realized that we already had valuable digital assets and enabling applications available, in-house or externally through our partners. The constantly updated movie library was already there. Our store locator engine was built. We had a transaction engine and a payment gateway. What we needed to do was create a common API service layer that would enable new applications to access those services consistently, for many more customers (millions), and in a way that we could monitor analytically for future improvements.

We looked outside of our organization and found a SaaS vendor whose technology enabled us to create this API service layer quickly, get them up and running on the cloud, and use analytical reporting tools to monitor traffic and the conversion data. We also used the same Graphical User Interface designs across different consumer devices, making only minor tweaks for usability. The key is to leverage existing solutions to accelerate time to market before your customers leave you. Without technology from this vendor, it would have taken us five to ten times as long to deliver what we wanted to.

In my third and final part of this series, I’ll discuss the strategic benefits that can result from extending the reach of APIs to developers and partners.

Since the arrival of online commerce 15 years ago, there have been few technology trends that have the potential to revolutionize the retail industry like the ones we see in mobile computing, social networking, and cloud computing. As retail executives, we are challenged to deliver innovative applications that satisfy the customers’ demand for commerce content and transactional ability from anywhere, using any of the always-connected consumer devices: smart phones, set-top boxes, and even internet-connected picture frames. Furthermore, due to the great recession, the notoriously limited retail IT budget is now even tighter, so we have to deliver these applications at little or no additional cost.

As someone who has been in the same boat, I want to offer, over a series of posts, several practical insights for creating innovative, API-enabled applications. I believe the time to take action is now, and if we do things smartly, limited budget or aggressive timeline should not be an impediment.

Find the Perfect Entry Point, Not the Perfect Roadmap

The company that I worked for rented movies and games through retail outlets. We needed to act fast to counter the challenges posed by our competitors who were delivering the goods by mail and digitally via the web and set-top boxes.

Instead of doing lengthy research to discover the perfect product roadmap, we decided to focus on enabling developers and partners to innovate on our core service. We quickly launched a very focused API service as an entry point, and developed a simple iPhone app as a proof-of-concept for building an application on that API.

Then, working with our partners, we quickly created and released an application that the customers can use from their mobile devices or set-top boxes. Using this application, the customers can search for movie titles, browse for recommendations, and decide whether they want to watch the movie immediately through their set-top box, browser, or pick up the movie from the closest retail outlet.

The most critical decision was to not wait too long to make a decision. Once customers were using the initial app, we enabled them to give us feedback that we monitored closely, which in turn allowed us to iterate and improve upon the initial entry point.

In my next entry, I’ll look into ways that retailers can shed a more conservative, traditional mindset and embrace new ways for deploying new apps.

You’ve probably heard that Twitter’s API has been the primary driver for the fast growth and rapid morphing of Twitter’s service.  You may know that eBay and Salesforce.com get over 60% of their usage via APIs.  And in the last couple of months, you may have heard people at your company in marketing, business development, or software engineering talking about your own API.  If not, you will soon.

If you’re in the retail industry, this is going to make you very busy for the next few years.  APIs are a technology buzzword that basically equate to a new way to use the web.  In the 90s every retailer went “online” to take advantage of the cost of sales and margin improvements that came from having an e-commerce channel.  These sites enabled companies to “sell direct to millions of new customers”, and those who got online later had to race to catch up just to protect their businesses.

Now in the 2010′s there’s a new way to use the web – a-commerce, or commerce via APIs.  Mobile app and web app developers can use APIs to build very cool new applications that look and behave totally unlike your core website, but use your commerce engine just like a regular affiliate.  This lets them get to consumers who would never have come to your website, but love to use the app and therefore your company makes money.

While at first this may sound like nothing new, it turns out that there are a lot of new issues to manage.
The 10 New Factors of A-Commerce for IT Operations

1. Performance: API-driven demand patterns & load on infrastructure are really different from web-driven demand.  Developers will often wrap a database object directly in an API rather than shielding it with a web page that limits the number of rows that will be returned; programs will use that API in unpredictable ways that will load your system differently.  Added to that, many more new concurrent connections from thousands of new sources will be simultaneously hitting your backend servers.

2. Analytics: Channel sprawl is a good thing for margin, but tough on reporting.  There are multiple channels that affiliates are coming through – iPhone apps, tablets, web apps – and you’ll need to provide a combined view on their activity.  API traffic cannot be seen by Google Analytics or any existing web tool so you will need to figure this out.

3. Auditing: Recording the sources of the a-commerce transactions and integrating with affiliate management services to pay a-commerce partners is important.  Payment disputes will happen and you need to have a trail of data to show what happened in your systems.

4. Seasonality: Preparing for holiday rush is critical in order to run a trustworthy a-commerce service.  This requires not just performance forecasting and knowing what can be cached, but how to throttle low-value requests when high-value purchases are in the queue.

5. Security: The number of usernames and passwords are going to explode.  Don’t make users and developers build a new username and password to use your system.  By making OAuth the standard you can let users and developers log in using their Twitter or Facebook accounts.  This will save you a ton of hassle managing password resets and angry users.

6. Protection: Prioritizing traffic between web visitors and API users – who has priority when your infrastructure is under load?  Additionally, protecting against a-commerce threats requires filtering out XML header bombs, SQL injection attacks that come in via the API, and other new forms of attack.

7. Privacy: Ensuring that sensitive data isn’t exposed incorrectly requires knowing and controlling what customer and commerce data is leaving the firewall, staying in compliance, and ensuring PCI standards are met.  In an API world, this data is hidden in XML and JSON formats which you will need to scan and manage.

8. Evolution: Unlike a website which is under your control, or under the terms of “caveat emptor” when you are being webscraped, now there are affiliates who are depending on the API working a certain way.  When the development team changes their code and builds a new version of the API, you need to be prepared to manage apps that break.

9. Provability: SLAs multiply in this scenario.  Make sure that you can prove that your service was up and responding when upper management comes looking for who to blame when things go wrong for a high-priority a-commerce affiliate.

10. Debugging: this used to be something that just the internal development team handled by themselves; you may or may not have been involved.  Now there are a ton of new developers trying to figure out how to use your service, sending malformed requests, generating errors.

The specific combination of analytics, debugging, provability, and protection will come in extremely handy during the winter holiday season – being able to understand traffic spikes, identify misuse of your platform and removing that traffic while letting the good transactions continue to flow will be crucial in preventing downtime and maximizing revenue generating CPU cycles.

In the next articles in this series, we’ll dive deeper into each of the 10 issues listed above.  Let us know which ones you’re most interested in and we’ll cover those first!

Sam brings over 15 years of industry experience in enterprise software, product development, and open source strategy.  Prior to Sonoa, Ramji led open source strategy across Microsoft. He was a founding member of the AquaLogic product team and has built large-scale enterprise and Web-scale applications, leading the Ofoto engineering team through its acquisition by Kodak. Other experience includes hands-on development of client, client-server and distributed applications on Unix, Windows and Macintosh at companies ranging from Broderbund to Fair Isaac. Sam holds a Bachelor of Science degree in Cognitive Science from the University of California at San Diego, and is a member of the Institute for Generative Leadership.