What is API monetization?
API monetization is a way that businesses can use APIs to make money—either directly or indirectly. A variety of API monetization models exists—from pay-as-you-go to monthly/annual billing to “bucket” purchases of API transactions to be consumed over time. Monetization is essentially the creation of a business plan for your APIs. And the plan should always include ensuring that you deliver high-quality, consistent value to your API users.
As the growing popularity of APIs continues to drive new opportunities and broadens the marketplace, an API monetization strategy is essential for any company that wants to jump on the new API economy.
APIs have transitioned from a technology asset to a product on which you can build your business. They’re embedded in everything from mobile apps to cars to fitness devices. The data and services they provide are valuable commodities – but it’s not always obvious how to turn them into a growth engine when they’re often buried inside other technologies developed by someone else.
The first step is to consider the API in terms of its value to the individual who will be paying for it. In a few cases, an API will have obvious value for the end user; but in most cases, it’s a tool for developers who are building apps. Connecting with and incentivizing developers is essential to the success of your API business model. Once you’ve determined who will benefit and what other options they have, you can better select the monetization model.
There are several pricing approaches you can take for monetization.
Other indirect considerations can influence the business decision to invest in an API. These include:
As you develop your business strategy, a good place to start is by talking to your current API users. API Portals and other API engagement platforms are ideal not only for building a community but analyzing what APIs are successful. Ask the developers on the Portal what they believe is valuable and whether they would be willing to pay for it; sponsor a hackathon to gauge interest; and pay close attention to complaints about quality and ease of use.
Ensure your APIs are ready to scale and that they provide the level of security and protection end users will expect. And implement strong end-to-end governance for ongoing quality and top-of-the-line performance.
The webMethods API Management Platform provides a powerful solution for API monetization, helping you manage the entire API life cycle more easily and expose APIs to external developers, partners and other consumers.
With webMethods, you can:
webMethods also includes an API portal available in the cloud, providing developers with easier access to your APIs.
Software AG’s webMethods API Management Platform offers key benefits for API monetization. With webMethods, you can more easily expose unique corporate assets as APIs, provisioning mobile and Web apps to serve any device or technology. Leveraging the development community, you can reach new markets more easily, creating new sales channels and extending your reach. webMethods also helps to accelerate enterprise cloud, hybrid and mobile strategies.