You might not realize it, but data is valuable. How valuable you might ask? That’s a good question. In this blog, I’ll tell you how you can turn information you already have into something of value. I believe that value is determined by others. In other words: value is the price that a user will pay for it. This does not mean that you should leave the price to what a user wants to pay for it, but rather define a reasonable price. I will not further discuss pricing (a topic worth a whole series of blogs) but rather focus on how to set up API Monetization from a business perspective.
Show me the data (and the money)
If you never considered API monetization and you’re struggling with what’s next. Think:
- Do I possess relevant information?
- Do other people want this information?
If both questions are answered with Yes, you can turn it into a service with a business model for instance price per request, all you can eat with a fair use policy (managed and monitored by your API Manager Solution). It can be as simple as that: you turned “dead data” into a value generating business activity.
What is your business?
It doesn’t really matter what business you’re in, but let us look at two examples:
The World Retail Banking report indicates that Banks and Fintech companies are investigating and investing in API capabilities. There is a chapter in the report called “APIs are pivotal to Banking’s Future”. In this document which is worth a read there is a section on API monetization and the models to do that. One of the key findings from the report: APIs enable rapid deployment of banks’ digital agendas and collaboration with non-financial services providers to create a value-based marketplace and increased long-term loyalty. (WorldRetailbankingReport, 2017). An example is Dutch Bunq Bank that has a full-fledged Banking API.
The Dutch RDW (Netherlands Vehicle Authority, part of the Ministry of Infrastructure and the Environment) offers the possibility to check vehicle data online. For incidental use by consumers they offer a free solution with a web interface. For business use, both an XML (eXtensible Markup Language) and web interface is available and for each retrieved piece of information a small fee is charged, as well as a onetime fee to add the organization as a client.
Make Money when other people use your APIs
Whether you already want to monetize your APIs or you want to do that in the future, you need to have the right tools to do so. What do you need from a high-level perspective?
We call it the Three M’s (Management, Monitoring and Monetization). This translates into the following high-level requirements:
- A scalable, dependable solution
- Control over the APIs
- A solution that can be tailored to your specific requirements but that offers a large set of functionalities already
This is how you do it
Next question: how do you get it done?
Deploy an API Manager that guards the door and provides the data to your clients according to your business model. The API Manager solution should offer functionality for all, the right combination of easy of use and findability for your customers but also the management controls for your organization to make sure that all the three ‘M’s’ are catered to.
Scalable and dependable
APIs are typically a volume play, meaning that the use can surge. This requires a solution that can scale up and down depending on need. You also will have some SLA or guarantees that you offer to your customers. They use it for a purpose and want a service that is available and responsive. This puts stress on the monitoring component and its ability to notify in case of exceptional situations and manage traffic according to SLAs. And do not forget security!
The key to success: the parties who find your data valuable must be able to access your data completely without your interference. So, you need a self-service portal. Otherwise you would need 1000 men to do all the transactions. Make it easy for people to gain access to your data! Deploy easy self-registration and payment processes.
Depending on your business model and the target audience you also want control who signs up and what their goal is and their needs are. But the bulk of the work should be completely automatic with exceptions handled by humans.
Control and Continuous improvement
We live in a day and age where improvement is a constant factor. This of course also includes new versions of your APIs. This can be driven by you as an organization but do not forget your API users. Engagement with your API users has the possibility to improve your APIs. So, it is important to listen to your users but also to ask them what they like.
To quickly deploy your API solution (yes, you are on a deadline, think of your competitors) you need a solution that offers ample functionality but allows you to extend the product because simply: one size does not fit all.
You now have an idea what you should be looking for from a business requirement perspective. These high-level requirements will translate to a set of more specific questions that you should get answered to select the right solution for your API Management.
The right solution will enable you to introduce APIs without to have to completely change course if you want to innovate. Simply take the things you have (=data) and unlock it to people that find it relevant. Pay attention to usability and automate access management through APIs. Do you need some help with choosing the right API vendor for your company? Download the white paper below!