API management can be a tricky business for developers. Larger, more established development teams working on more known brands have teams of lawyers and copyright experts dedicated to the maintenance, security and monetization of their publicly-accessible API’s. However, it doesn’t take an entire team to manage available API’s, and in fact, Microsoft’s Azure API Management team (ironically) is offering a bit of a walkthrough on how to monetize API’s using Azure API Management.
For developers already dealing in the world of API monetization, the Azure API Management process should seem like a relatively straightforward affair. However, for those new to the business, the Azure team takes the time also to offer a refresher on how the system works.
The two most common ways to directly monetize your APIs are: Subscription Billing, where you charge your customers a flat monthly fee to access your APIs; and Metered Billing, where you charge your customers based on the number of API calls they make.
Subscription Billing MBilling Typesodel:
With a subscription model, your customers pay a flat monthly fee and are allowed to make a certain number of API calls per month. For example, a customer pays $100 to access up to 10,000 API calls per month. Whether they make 0 API calls or 10,000 API calls, the customer is charged $100 each month. If a customer subscribes to your API in the middle of a billing period, the customer would be charged a pro-rated amount for the number of days the subscription was active.
Metered Billing Model:
As the name implies, with a Metered Billing model you charge your customers a fee for each API call they make. Your customers are able to make as many calls as they want and are charged based on the total number of calls made. If the customer makes 7,000 API calls at $0.01 per call, then the bill at the end of the month would be $70.
With the Metered Billing model, you charge your customers once a month, and all you need to know is how many calls they’ve made during that period.
Beyond laying the educational groundwork behind API monetization, the Azure team also covers the more detailed steps that accompany the process. These include using a payment platform for invoicing and collecting payments, setting up monthly subscription products, and creating metered billing.
There are several detail examples of how API management and various payment platforms work together within the Azure API Management tool and breakdowns explaining when and how to package API’s, apply quota’s and rate limits as well as calculating the bill for a metered user.
The Azure team has managed to offer a compact and concise tutorial for API managers who are looking to monetize their product. Visit the Microsoft Developer Network blog for all the details.