API Monetization: Unlock the Value of Your Data

Editor's Notes

• #4: The end result? Through a focus on APIs, you’ve enabled anything everything application access. No longer is the browser your window to the Internet – instead, the application that’s optimized for the device/service that you’re currently using becomes that temporary window. And through an API Server (aka API Gateway), you have a single point of control for all services to securely access the information that they need. The alternative? Each one of these resources requires an Omnipotent One from IT to bless the opening of a port in the firewall. While mobile apps alone, this could be in the 10s of 1000’s. Your choice – one port to a single server, or a swiss cheese firewall? The choice is pretty clear. Now to take the next step to enable the application economy in your enterprise, you’ll probably want to focus on a few initiatives. Let’s take a look at some of the ones that CA has seen.
• #14: As you can see, most open data APIs continue to be those associated with opendata.gov initiatives, as well as a number of publicly funded datasets
• #15: But despite the fact that these open data APIs are free, they still offer tremendous value. In fact, according to a recent McKinsey report (shown here), many enterprises and startups have begun leveraging these open APIs to not only decrease costs within their organization but also generate new revenues.
• #16: In fact, it’s not only opendata.gov APIs that offer value. Opportunities exist across multiple industries, many of which have yet to unlock their data and make it available to third parties. But the value can be clearly if we just take a few examples, like the Insurance industry. We all know that the more marketing data that’s available, the better enterprises will be able to segment their target markets. The Insurance industry’s actuarial datasets, when redacted of all sensitive/private information, can be a tremendous source of targeting data for third party Marketers for research, data mining, and so on. For example, actuarial data points to the fact that teachers that continue to teach in the classroom up until retirement often die within 5 years as compared to administrative staff such as principals or guidance counsellors. That’s just one example of the kind of actuarial information that can be extremely valuable to targeted marketers. Other kinds of Data APIs can provide information that’s invaluable for companies and startups looking to create new products and services. For example, transportation data that’s either centrally collected or crowd sourced has resulted in the creation of apps like “Waze” or “Beat the Traffic” that has probably made your drive home easier, but it’s also allowed established companies to create innovative logistic services, as well Most commonly, what we see, is data that allows companies to benchmark themselves against competitors, or else leverage benchmarking data to make better decisions: For example, there’s an explosion of data happening right now in the Healthcare space where patient data (again, redacted of any privacy information) is being aggregated in order to share diagnostic information that can potentially reduce costs of treatment and lead to better health outcomes Similarly in the Utilities industry, we’re seeing the sharing of data for energy consumption among and across electrical grids driven by Smart Grid and Smart Meter initiatives that allow, for example, building managers to compare and benchmark their buildings against their neighbors in the same city block. All of which can lead to better conservation of energy and cost savings.
• #17: Data within the enterprise is also valuable, but generally not made available outside the bounds of the originating business unit, let alone made available to other businesses, but: Administrative data that’s gathered on a day to day basis, such as Website logs can be used for benchmarking across an industry Reference data can be included in product and service aggregators, expanding the enterprise’s market reach Aggregate data can be used for benchmarking and segmenting both within and among industries But often the most pertinent use case is just sharing this information within the organization itself in order to provide more data to make more informed decisions. This is a key characteristic we see time and again within enterprises due to the barriers of unlocking that data.
• #18: Because, in most cases, unlocking this data is fraught with roadblocks. For example: Most Technical Architects would never expose databases directly to developers, but rather prefer to build out a layer of abstraction on top of it first. Perfectly good approach with many excellent reasons for doing so. However, this approach also comes with high overhead, requiring the assignment of IT resources and the development of design concerns: Do you know how users will use your data? to What is your plan to cope with load? There’s also concerns from your legal department around re-use and potentially exposing private information to third parties And the business folk are always concerned with potentially giving away what they see as a competitive advantage All of these concerns typically result in longer times to market But as Bill mentioned earlier in this webinar, the app economy is causing seismic shifts inside of traditional enterprises. The fact is that it’s now quick and easy to expose your proprietary data via APIs in order to unlock it’s value and realize significant ROI depending on the monetization model you choose.
• #19: This graphic is taken from John Musser’s API Business Models slideshare, and shows a range of opportunities that enterprises can exploit with their API initiative to realize value. I’m going to focus on the simplest, most direct ROI models for Data APIs in which the Developer Pays
• #20: For enterprises with proprietary or otherwise valuable information, exposing it via a Data API can be the quickest way to generate new revenue streams, allowing developers to directly access, reuse and/or mashup your data. For example: Google’s bigquery (https://cloud.google.com/bigquery/pricing) let’s you freely load your data into the bigquery engine, but then charges you as you go for each query you run on that data Moz (http://moz.com/products/api/pricing) let’s you look up SEO information about billions of URLs for free if you’re running small, infrequent queries, but imposes a pay wall if you want to look up more URLs at once, or if you want to run more frequent queries Opencorporates (https://opencorporates.com/api_accounts/new) is similar to Dunn & Bradstreet, but they offer company lookups for free if you’re a non-corporate user and only charge you if you want to use the service for private or corporate use Microsoft’s Bing search engine (http://bing.com) uses a unit-based pricing model that prices per 100,000 searches – essentially allowing you to purchase “buckets” of API calls And finally there’s Stripe (http://stripe.com), the new kid on the payments block that offers “one touch payments” and charges you a %age of each transaction as a fee So, as you can see, there are many different ways to create new revenue streams for the proprietary data and unique services in your enterprise. But to enable these business models, you’ll need to put some technology in place.
• #21: CA offers a number of different API Management products that can help you get started: The CA API Developer Portal is the key mechanism for unlocking value from your data and other APIs, allowing you to onboard, manage and empower a developer community that will be able to create value added applications against your APIs. The API Developer Portal is currently available as either an on premise product, or as a SaaS-based service running in AWS Each of these Portal solutions is backed by an API Gateway that ensures API security, while providing you with the flexibility to integrate your API Management initiative with the rest of your enterprise resources.
• #22: CA offers a number of different API Management products that can help you get started: The CA API Developer Portal is the key mechanism for unlocking value from your data and other APIs, allowing you to onboard, manage and empower a developer community that will be able to create value added applications against your APIs. The API Developer Portal is currently available as either an on premise product, or as a SaaS-based service running in AWS Each of these Portal solutions is backed by an API Gateway that ensures API security, while providing you with the flexibility to integrate your API Management initiative with the rest of your enterprise resources.
• #23: CA offers a number of different API Management products that can help you get started: The CA API Developer Portal is the key mechanism for unlocking value from your data and other APIs, allowing you to onboard, manage and empower a developer community that will be able to create value added applications against your APIs. The API Developer Portal is currently available as either an on premise product, or as a SaaS-based service running in AWS Each of these Portal solutions is backed by an API Gateway that ensures API security, while providing you with the flexibility to integrate your API Management initiative with the rest of your enterprise resources.
• #24: Today, I’m going to focus on CA’s API Developer Portal, which provides support for three key features germane to our discussion today, including: Data APIs Which is the ability to publish your data as an API via a simple wizard-like interface, that also automatically generates interactive documentation for your data API API Monetization Which allows you to assign a monetary value to your APIs, either on a “per hit” basis, or else via a monthly plan, per developer, and so on API Catalog Which ensures that developers can understand what APIs you offer, as well as how they’re priced
• #25: A good example of how to do API monetization correctly is this example from the Weather Underground. Here, they’ve created: Packages that allow developers access to an escalating number of APIs, both raw data APIs and mediated APIs. Think of this as being similar to Cable company packages: in the same way that Cable companies offer you more or less channels in each of their packages, you can offer access to more or less APIs. They also offer escalating Plans that provide greater quotas (such as more API calls per day), as well as greater frequency of calls This is the kind of model that is supported by CA’s API Developer Portal.
• #26: It starts with publishing your APIs using the wizard-driven interface you see here.
• #27: And then you can move on to creating pricing for each of the APIs you associate with a Plan or Package you create. For example: you can assign APIs to an Account Plan such as bronze, silver, gold, platinum, etc, and then charge a recurring monthly fee to access that set of APIs You can also assign API Plans to your APIs. API Plans provide greater or lesser access to your APIs based on calls per day (quotas) and calls per second (rate limits) You can then assign a price to each of these entities in the Portal’s Revenue Planner. For best practices here, we’d recommend assigning: One time fees at registration time Recurring monthly fees for Account Plans that define access to a greater set of APIs Per API Hit fees for API Plans that define bandwidth for your APIs You can also use the Revenue Planner to predict revenue growth and experiment with “what if” scenarios to understand how much revenue you can generate on a quarterly or yearly basis. Once you’re satisfied, clicking on the Apply to Plans button will update your billing engine with all the billing entities you’ve created, along with all the pricing. Calculations and taxes are all taken care of in the billing engine, which sends the numbers back tot eh Portal for presentation as invoices for your developers.
• #28: Finally, all this information is summarized for you developers as part of the API Catalog, where developers can: Find information about the APIs that you have on offer Understand how they’re priced by referring to the Plans tab