APIs are a foundational technology that enables companies to participate in the digital economy. APIs have the potential for value creation such as the establishment of new channels for products and services and the enablement of entirely new digital businesses models. APIs provide programmable access to systems and data that have strategic and economic value. Some companies offer free, open APIs in an attempt to build developer communities around their brand
and unlock ecosystem opportunities by adding partners at scale. In other cases, the API provides access to data or functions that are so valuable, the API can be monetized and even create new lines of business.
API management software is a critical component to API monetization architecture. API management software provides the following features:
- Developer portal / marketplace
- Lifecycle management
- Throttling and security
- Analytics, KPIs, and developer feedback
- Monetization features – metering, billing models, payments and reports
There are many features that are bonuses for API Monetization. For example, billing accommodations are useful because you have in place a centralized payment center for your APIs. Another piece is a rate plan. This is a set plan in place with rates for API use. As you get a full-on scope of your API, detailed reporting is very practical. Also, management of APIs allow you to have access in knowing what is going on with your API.
These platforms require a modern architecture as well as a business strategy to monetize APIs. Also, new software development approaches are often needed to treat software as products and manage a rapid product release cycle.
The five steps to monetize your APIs we will examine includes:
- Establish your business case and roadmap
- Ensure you have the right funding and organizational model
- Treat APIs as a products with an Agile API product lifecycle and governance
- Ensure you have the right technology platform to build and manage your APIs
- Measure and monitor API KPIs such as run-time performance, financials and developer feedback