Digital transformation radically changes the way how we operate, deliver value to our customers and drive the culture of experimenting. APIs are at the center of this development.
An API illustrates how to connect a dataset or a business process with a consumer application or another business process. APIs allow businesses to share data and services across their organization, and to their broader network of suppliers, partners and end customers.
There are three main types, based on how they are made available: Private API, Partner API, and Open API. It is important to understand and identify the different advantages and limitations of these three types:
API monetization is the process by which businesses create revenue from their APIs. In recent years, a huge number of companies have been able to generate revenue through new business models and new offerings through APIs.
Monetization allows API providers to move beyond their current business models, scale API programs, and find new ways to create value for their customers, developers, and partners. APIs empower developers to harness data and create new services for the whole business ecosystem: companies, customers, developers and end-users.
To monetize APIs, public APIs are the way to go. There are many routes that businesses can take as they open their APIs. For example, the preference may be to first develop private API or internal APIs before opening them up.
There are a few things to consider when looking at API monetization. What’s your strategic goal and business case? What’s the market need and who is the API for? How will you measure success? Answering these questions should help identify the best way to approach monetization.
When moving to an API-driven culture, you need to think about these aspects:
To get started, you need a centralized solution to first estimate the business’s capability and then design a roadmap to publishing and maintaining an open API. This decision should be based on the business features and capabilities and designing a revenue model, etc. and at the end developing the APIs.
To help you succeed with your API monetization journey, we have created an API monetization framework.
Faezeh has a background in Industrial Engineering in Colombia, and she did her Master’s in Business & Technology program at the Tampere University of Technology in Finland and wrote her thesis at TietoEVRY to explore more and gain more experience in API Monetization and business development around APIs.