The digital transformation has ushered in a new era for businesses, creating innovative opportunities for growth and expansion. One such organisation that has embraced the power of digital enhancement through API business models is Amadeus.
Over the years, I have had the pleasure to work on open university course and book project API Economy 101 with Marko Seppänen, Professor, Vice Dean for Education (Faculty of Management and Business) at Tampere University. He and his research colleagues have published numerous papers on API and Platform economy, and now the most recent paper is analyzing the travel-related Amadeus' API business models by Heshmatisafa, S. and Seppänen, M., 2023. Exploring API-driven business models: Lessons learned from Amadeus's digital transformation. Digital Business, 3(1), p.100055.
This blog post is a summary of the main points of the research paper. The API Business Model Canvas is an interpretation of the research report findings to the APIOps Cycles API Business by the blog author.
Traditionally a B2B company providing customised products at premium prices, Amadeus embarked on a digital transformation journey, reshaping its business model to leverage the potential of public APIs. This blog post explores the transformation of Amadeus' business model, its API portfolio, and the remarkable business values generated by exposing digital assets through open APIs.
Amadeus' traditional business model was transaction-based, driven by maximising the number of transactions through its infrastructure. The company employed a classic two-sided network effect model. This entices more travel agencies to connect to its ecosystem as more markets are included. However, the digital enhancement and development of public APIs paved the way for a revolutionary restructuring of Amadeus' architecture.
Modern IT architecture enabled Amadeus to standardise its products, scale market dynamics, and construct an open platform through public APIs. This move supported the diversification of the existing business model, giving rise to a portfolio of two distinct API business models: the "Enterprise APIs Business Model" and the "Self-service APIs Business Model."
In this article we'll summarize the research on the business models, but if you are interested to learn more about the APIs, visit the Amadeus Developer portals for self-sevice APIs and Enterprise APIs.
The adoption of public APIs at Amadeus has unlocked several business values:
Amadeus' digital transformation through API business models has been remarkable. The company's API business model portfolio has opened up new revenue streams, fostered strategic partnerships, and created a thriving ecosystem within the travel industry. The innovative use of public APIs has enhanced Amadeus' core product offerings, accelerated its R&D initiatives, and positioned the company as a leader in the market. By embracing the power of open APIs, Amadeus has truly revolutionised the travel industry, setting an inspiring example for businesses across various sectors.
The "Enterprise APIs Business Model" at Amadeus is a traditional B2B approach connecting travel sellers and providers through a highly integrated system. Below is a breakdown of the business model using the API Business Model Canvas, part of the APIOps Cycles method:
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