Five Actions for Maximizing Your API Value

By Chris Haddad

APIs have existed since the dawn of computing, and they’ve recently begun to show their star-power. With ecosystem leaders like eBay, Netflix and Amazon using APIs to expose business capabilities across third parties and demonstrating successful API business models, more enterprises are recognizing the API’s intrinsic value.

At the same time, potential API publishers realize that converting APIs into business opportunities can be challenging. They have seen Twitter fail to manage its APIs; losing customer relationship control and alienating developers in the now infamous Twitter OAuth Apocalypse. Potential publishers have watched executives at Pinterest, who are reluctant to publish their API and possibly compromise their vision.

Within this opportunistic and complicated context, software architects and developers can take five actions to avoid common API pitfalls, create business value, and monetize API assets.

Embrace the Managed API

Managed APIs increase adoption by establishing operational visibility and creating a trusted provider-consumer relationship. API management systems automate quality of service (QoS) enforcement, secure and protect the API, monitor usage, and manage access keys.

Key management provides a unique key ID for each API subscription. The key supports tracking, reporting, and taking corrective action. If a subscriber overloads the server, the key can be revoked, or the enterprise can charge additional subscription fees for the higher usage rate.

Establish a Monetization Model

Before exposing an API, determine an appropriate monetization model. Monetization will affect API availability policies and monitoring techniques.

Some companies, (e.g. Urban Mapping and Xignite) charge per API call or business transaction. Microsoft recently announced a hybrid model for its Bing search API; the first 5,000 API queries each month are free, and then charges accrue. Alternatively, some API providers charge based on business service access. For example, the provider charges a flat monthly subscription tied to an eBay storefront.

Not all APIs are monetized based on a currency amount. APIs created for internal use may not map to traditional revenue streams, but rather deliver internal process optimization. An API provider can “charge back” or “show back” business value based on adoption and usage. For example, the provider may communicate value when 15 other departments in the organization made 3 million calls against an API during 2011.

Make APIs Easy for Developers to Access

Access is often a significant API adoption barrier, so provide a self-service, resource-rich environment. Consider building an “API store,” similar to the Apple App Store or Google Apps Marketplace, which make it easy to browse, publish and even purchase (or subscribe) to APIs. The venue lets developers register as a potential API consumer, obtain API access credentials, and match project requirements to API capabilities.

Well-organized support channels and API documentation enable developers to “try before they buy.” A structured API exploration environment rapidly reduces the time and effort required to evaluate and integrate API resources.

Employ Governance

It’s not enough for APIs to be readily available. When publishing an API for consumption, governance keeps the environment from devolving into chaos by managing people, policies and processes. API management systems enforce operational controls on essential development lifecycle functions and runtime technologies. For example, a team may desire to enforce a specific message payload or interaction pattern. If an API maps back to a mobile phone, a team might want to encourage a simple JSON format and minimize the number of interactions. By contrast, efficient machine-to-machine interaction may require larger transferring larger datasets via XML payloads. Knowing the consumer fosters creating the optimal API interface.

Monitor API Use

Effective API monitoring compliments governance. The best API ecosystems and platforms include measurement tools, metrics, and activity repositories that report back on usage, ecosystem traffic, and referral traffic. Requests and response metrics are germane to understanding how the API works, identifying emerging request trends, and evaluating responsive delivery. Failing to measure and analyze API usage on a daily or weekly basis will inhibit creation of a reliable API and vibrant API community.

By combining usage insights with robust governance and an attractive API storefront, the enterprise is well positioned to build a community, increase API adoption, realize monetization goals, and maximize API value.

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Biography

Chris Haddad joined WSO2 (http://wso2.com) as vice president of technology evangelism in 2011. In this role, Chris works closely with developers, architects, and C-level executives to build adoption strategies that maximize business value when adopting API Management, Platform-as-a-Service, and Service-Oriented Architecture. He also collaborates with WSO2’s engineering team to define the product roadmaps for WSO2’s Carbon and Stratos platforms and associated products. Previously, Chris held vice president positions at Burton Group and Gartner where he led teams in advising Fortune 500 enterprise organizations and technology infrastructure vendors on adoption strategies, architecture, product selection, governance, and organizational alignment. His team advanced best practices in platform-as-a-service, cloud application architecture patterns, service-oriented architecture, and application middleware. He also gained Apache Axis committer status. Read Chris ’s blog at http://blog.cobia.net/cobiacomm/.