How Do I Price My API Resources?30 Nov 2015
I am continuing to push my research around API monetization, plans, and partners forward, whilep preparing for my API lifecycle keynote at @Defrag and @APIStrat. Along the way, I am also exercising some of my API pricing and planning strategies with my partner in crime at APIware, as we think through some new products that we are developing.
How I approach pricing for API products, is on a resource by resource basis, considering all of the API monetization tools in my toolbox. For example, when i launch two new API endpoints for exploding API definitions, and telling me how big my APIs are, I quickly run down my list of monetization building blocks to see which areas will apply to these new resources. The reality is, until these APIs leave an alpha stage, they will just exist in my internal consumption tier.
Even though these APIs aren't ready for prime time yet, I am already thinking through which of my API monetization building blocks will apply. Will I charge for access? Are they available in the freemium tier? Do I offer only a trial version of them? Ultimately it all comes down to who I will be targeting with these resources, and in this case it will be primarily hardcore API architects--something that helps me define how I will price these resources, and which service tiers I make them available in.
When it comes to generating revenue from APIs, rarely are there a one size fits all solution. You should be considering each resource based upon the value it brings to the table, who you are targeting with this resource, and weighing all the tools in a modern API monetization toolbox. Remember the business of APIs resembles the technology of APIs, where you do things in small chunks, and you iterate, until you find the optimal value proposition that works for the platform, and your consumers.