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The digital world moves incredibly fast. Embracing APIs as a key strategy for optimizing internal software development was big news not too long ago. Now, it's all about external-facing APIs and the quest for monetization.
Companies quickly realized that the APIs their in-house developers build to solve internal challenges would likely have value for developers in other organizations as well — and the path to monetization became clear. Today, businesses across all industries are creating new revenue streams by extending their products and services via API-enabled partnerships. And, independent developers are getting in on the game as well, building APIs specifically for revenue-generation purposes.
The Monetization Trend
According to the 2022 State of APIs Report, an increasing number of organizations are embracing the idea of monetization. Overall, API monetization in 2022 increased 5% from previous years. Within the financial sector, it rose by 16%.
The benefits for organizations are clear:
■ Revenue potential: Monetizing APIs enables companies to drive additional revenue.
■ Engagement and loyalty: By monetizing APIs, organizations can encourage customers to use their API to build new applications and services, which can lead to increased engagement and customer loyalty.
■ Partnerships: API monetization can create opportunities for businesses to form partnerships with other companies and third parties.
■ Competitive advantage: By adding revenue and increasing engagement and partnership opportunities, companies can gain competitive advantage.
Why It Matters for Developers
Developers are interested in API monetization, too, for a variety of reasons. Independent developers are embracing API monetization as a pure-play earnings opportunity.
Within organizations, developers are keen to monetize their own APIs because it provides their companies an opportunity to increase revenue and support further development and growth. Monetization across the industry also makes a wider range of APIs available for developer use, thus enabling them to build new applications and services that leverage existing data, services, or functionality — instead of having to build everything from scratch.
What to Expect Along the Way
Regardless of where a company or developer is along the path to monetization, there are some key considerations, and making monetization part of an API management approach requires effective planning and strategies.
Some of the questions companies and developers should ask themselves include:
■ Where will I sell my APIs?
■ What tools do I need on the backend to process API transactions?
■ How will I communicate with my API users?
■ What documentation do I need to provide about my API?
■ Do I have to worry about governance and usage issues?
■ How will I ensure brand consistency across my API offerings?
■ How do I handle ongoing API support and maintenance?
■ Will developing these capabilities to support API monetization slow down time to market for my APIs?
The complexity around API monetization is real. Companies cannot jump into the monetization game without first preparing their marketplace and back-end platforms to handle — and, hopefully, scale — API purchases and transactions.
Many organizations are opting to use pre-existing API hubs over building their own capabilities for these reasons. Choosing a ready-made digital API storefront can save organizations valuable time in getting to market with their APIs. This approach also frees developers from being involved in logistical concerns around monetization and instead enables them to focus on optimizing the quality of the APIs and the infrastructure supporting them.
When evaluating where to park your API monetization program, these functionalities should be top priorities:
■ Quick and efficient onboarding process
■ Flexible, customizable, easy-to-use hub for sharing and monetizing APIs
■ Support for all API protocols and API types
■ Flexible, tiered pricing models
■ Full ownership of the payment process
■ Branding capabilities
■ Governance and linting features
Making the Move Effectively
Developers and businesses planning to embark on monetization can do so effectively as long as they plan in advance and pick smart tools. Whether the priority for the organization is to boost revenue, forge greater engagement with the developer community or increase third-party partnership opportunities, the overall API monetization effort is key.
It's essential to create or select a centralized API hub that enables monetization with speedy time to market as well as full capabilities for supporting API transactions, documentation, communication, usage issues, and brand identity.
This comprehensive and holistic approach will pay dividends, as the emphasis on achieving competitive advantage through API monetization will only continue to grow.
Industry News
Postman released v11, a significant update that speeds up development by reducing collaboration friction on APIs.
Sysdig announced the launch of the company’s Runtime Insights Partner Ecosystem, recognizing the leading security solutions that combine with Sysdig to help customers prioritize and respond to critical security risks.
Nokod Security announced the general availability of the Nokod Security Platform.
Drata has acquired oak9, a cloud native security platform, and released a new capability in beta to seamlessly bring continuous compliance into the software development lifecycle.
Amazon Web Services (AWS) announced the general availability of Amazon Q, a generative artificial intelligence (AI)-powered assistant for accelerating software development and leveraging companies’ internal data.
Red Hat announced the general availability of Red Hat Enterprise Linux 9.4, the latest version of the enterprise Linux platform.
ActiveState unveiled Get Current, Stay Current (GCSC) – a continuous code refactoring service that deals with breaking changes so enterprises can stay current with the pace of open source.
Lineaje released Open-Source Manager (OSM), a solution to bring transparency to open-source software components in applications and proactively manage and mitigate associated risks.
Synopsys announced the availability of Polaris Assist, an AI-powered application security assistant on the Synopsys Polaris Software Integrity Platform®.
Backslash Security announced the findings of its GPT-4 developer simulation exercise, designed and conducted by the Backslash Research Team, to identify security issues associated with LLM-generated code. The Backslash platform offers several core capabilities that address growing security concerns around AI-generated code, including open source code reachability analysis and phantom package visibility capabilities.
Azul announced that Azul Intelligence Cloud, Azul’s cloud analytics solution -- which provides actionable intelligence from production Java runtime data to dramatically boost developer productivity -- now supports Oracle JDK and any OpenJDK-based JVM (Java Virtual Machine) from any vendor or distribution.
F5 announced new security offerings: F5 Distributed Cloud Services Web Application Scanning, BIG-IP Next Web Application Firewall (WAF), and NGINX App Protect for open source deployments.
Code Intelligence announced a new feature to CI Sense, a scalable fuzzing platform for continuous testing.
WSO2 is adding new capabilities for WSO2 API Manager, WSO2 API Platform for Kubernetes (WSO2 APK), and WSO2 Micro Integrator.