APIs: What to Consider when Pricing Them

APIs started just as an acronym that only programmers know in the 2000s. Now, they have become an important piece to ignite several innovative solutions. They unleashed a number of opportunities in various services to help them function more efficiently.

Using APIs is easy, but many don’t understand what it takes to make it useful. People are too focused on the technology part that they overlook the use cases for which they can add value to their businesses: representing a way to reduce operational costs and automating business processes completely.

But, how do you make money from APIs and how should you price them to get the best return? There are three ways to monetize APIs:

  • Data Collection. This is Facebook’s preferred method. It involves collecting of data from third party applications to use in your advertising efforts or your own products.
  • Product Adoption. It allows developers to build custom integrations that increase the value of products and keep the users locked-in.
  • Developer Usage. This is the most obvious way to monetize APIs. You simply charge developers for API calls.

The Developer Usage model has three pricing models, so you need to think carefully and choose wisely. The first models is Pay-as-you-Go, which simply means that you pay per API call. Fixed quota means you pay for a fixed number of calls per month and you are not allowed to exceed. Lastly, the Overage model is like the previous model. However, it allows developers to exceed their call limit in exchange for a small overage fee.

Each pricing model has its own pros and cons, but the last one may be the best option for you. It has the scaling advantages of the pay-as-you-go model and offers the predictability of the fixed quota plan.

Of course, how much you should charge per plan depends on your business. Just consider these three C’s when pricing:

  • Cost
  • Competitors
  • Content

On pricing your APIs, determine what type of value they can deliver and your actual pricing structure. Determine how much the access is worth in conjunction with your existing web-based offering and competition, then choose the pricing model that your customers will ultimately be comfortable paying. Find out how we can help here.

API History: What Is It And Where It’s From

Much of the changes that take place in the world of software hinges on APIs (Application Programming Interfaces). They have been a hot topic among developers, but only a few people are acquainted on what they are and where they’re from. Although, we interact with APIs every day, many still underestimate its impact on web applications. Here’s a brief API history to better understand their uses.

First, let us define the word API. An API is software programming written to bridge the communication between web applications. It pulls or shares data within the firewall of a company or over the internet. To put it simply, it makes services accessible to outside developers so they can build those services into their own programs.

The earliest uses of APIs were associated with three origin stories:

  • Franchises attempting to use their services in various locations
  • Stock market machines ticking out real-time data for media and investment firms
  • Catalogue-based mail order shopping

Whichever, the bottom-line is it was the entrepreneurial spirit of the people who struggled on using their company’s underlying services in new and profitable ways that drove the development of APIs.

Web APIs, on the other hand, have a fairly short API history. They have only been in use for over a decade. These companies have pioneered them:

  • Salesforce
  • eBay
  • Flickr
  • Amazon
  • Facebook
  • Google Maps

Perhaps, the most popular web API is Google Maps. While many are more likely to use Amazon and Facebook, Google Maps is adapted to site-specific purposes around the Web. In fact, it is the first to widely demonstrate the power of “API mash-ups” – using content from more than one source. Thanks to these mash-ups, you are able to see which bands are playing in what location, track your running routes and highlight hiking trails near your home.

But, the API history did not start with Google Maps. Its popularity is what made the wheel turn. Many developers hacked their code for use on other sites and forced the application to release an API that the former can use without the need to hack. That API and others are what changed the face of the Internet – forever. Click here for more blogs about APIs.

API Integration Challenges that Businesses Need to Overcome

The influx of software applications and the rising demand for customized products and services call for an unobstructed flow of data. APIs serve as a medium to exchange information between systems and applications. Due to the migration of business services to the cloud, API integration is gaining momentum. Instead of having internal IT server and staff, APIs stitch together applications available in the internet for quicker time to market and reduced costs.

While APIs transfer data between devices and the cloud, the data is protected by HTTPS while in transit. The data resting on the client or server is also encrypted. Another way to reduce the possibilities of data breach is developer registration. API keys, unique to every developer, are used to keep track of the devices using the APIs. Random tokens that expire after a given time are also a great way to ensure security.

Developers find REST (Representational State Transfer) APIs as more agile. Many cloud service providers prefer them because they provide lightweight communication between producers and customers. However, they also come with a set of disadvantages. A number of security concerns arise due to the lesser overall consistency in app updates. An effective way to secure REST is through network standards that assign IP addresses in which components are deployed.

Another API integration challenge is testing as it can be extremely difficult if performed by conventional methods. The implementation can collide with cloud resource mapping. The successful testing of APIs in the cloud is based on “abstraction”, a technique that exposes the features without exposing the implementation. By including component scaling and resource allocation features, it enables a test plan to include cloud-related elements without disturbing the cloud quality of the experience.

REST APIs are scaling high in their implementation by assisting convenient integration and possessing resilience and scalability in cloud applications. They are an affordable and powerful way to use pre-existing applications in the cloud to drive your business.

At APIworx, we make API integration simple and easy. We help automate, optimize and secure your technology driven-processes by making APIs that are easy to setup and maintain. Click here to learn more about our API integration solutions.

Treat your API Keys Like Your House “Key” – Your Security Depends on i

At APIWORX, we do our best to make sure your API keys are safe on our servers. We recommend rotating your keys periodically. Our team is happy to work with you to ensure you keep your APIs keys safe! Your Security depends on it. https://www.zdnet.com/article/imperva-blames-data-breach-on-stolen-aws-api-key/

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The World without APIs

What if APIs (Application Programming Interface) don’t exist? They have been such a huge part of modern technological development and disruption that it’s hard to imagine the world without them. We would be left with isolated data and applications that can’t communicate. APIs hold systems together. Without APIs, the technologies we rely on won’t work.

Here’s a quick view of how the world will be without APIs:

  • No social media on Smartphones. True to many people, when they wake up in the morning, they check their Twitter, Facebook and Instagram. None of these social networking sites will work without APIs. There will be no #IWokeUpLikeThis posts. In fact, Smartphones will not be that “smart” without the digital glue of APIs.
  • No weather information. The weather application from your Smartphones needs to get information from a source. While Samsung and Apple can just scrape it off from a weather website, APIs have a more standardized approach. Without APIs, you won’t be able to choose the right #OOTD and Google can’t update you on traffic if you want to travel.
  • No instant messaging. One of the best perks of today’s technology is easy and fast communication. We no longer need to send snail mails and wait weeks to months for them to arrive. Phone, email and SMS send our messages in real-time so we can respond and get response immediately.
  • No YouTube and Netflix. You’ll have to rely on video entertainment given by your local cable provider. There will be no cooking how-to and make up tutorials you can watch to sharpen your skills.
  • No online bookings. Another great thing about APIs that won’t be possible is online bookings. You can’t pre-book your flight and movie to make sure you have a seat. You’d have to go and interact with a human being to get your tickets.
  • No online banking. You can’t access your banking information online anymore. You need to visit a branch of your bank to get the details you need. You need to go to an ATM, withdraw and transfer funds – assuming that its back-ends are API-free.
  • No shopping online. Without APIs, you can’t shop at home. You need to look at physical catalogues and visit a physical store to buy the things you want and need. Coupons won’t be available online, too. They will be sent via post and you’d have to carry them with you to get a discount.

Many systems will fall down if the world is without APIs. Companies and individuals everywhere leverage API for their personal and business purposes. Without them, services, activities and processes around the world will grind to a halt. APIs are so integral to the way our society and technology has evolved that businesses cannot afford to ignore them. Click here to know how we can help you with your API strategy.

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