Here’s a question that we find compelling: If you’re an app developer, would you pay to use an API?
Maybe you have an API that fits your use perfectly. Even in that case, though, would your commitment change if you had to pay to use it?
APIs expose existing business capabilities to a whole new set of channels, in the process delivering some real value to developers building apps. It might seem tempting to monetize APIs directly, but we don’t think that would be a good idea at all. Enterprises need to derive value from their API as a new channel for their business, and asking developers to pay sours that arrangement. We’re not convinced that many developers would do it anyway, given the current API scene.
Let’s take PayPal as an example. PayPal is a payments company that increases its reach by getting developers to embed the PayPal web checkout API in their sites, with no charge for using the API. If PayPal started charging developers to embed the API, we believe those developers would look elsewhere.
Trying to monetize an API would be like Facebook suddenly deciding to charge a fee for every status update, or even for being a member on the site. There may be some hardcore fans who might pay, but millions would drift to other free sites instead. Why should APIs be any different?
We understand that the API is a distribution channel, and when that phrase comes up, then “revenue opportunities” doesn’t follow far behind. But APIs require a different mindset — one that emphasizes value creation instead of a more traditional ROI calculation. Aligning APIs with business goals will spur innovation, and create powerful momentum that shouldn’t screech to a halt because of monetization.
What do you think? Is there an API you’d pay to use, or should monetization never enter the conversation as a real possibility?