Is it time for API monetisation?

The concept of API monetisation appears to be gaining traction in the telecoms market. As a result, it’s worth asking whether things could really take off, how the model can be leveraged, and what should we be thinking about the use of commercial APIs?

API monetisation is the process of driving revenue to enterprises via API channels. The model aims to deliver commercial API access (via gateways) to parties who build applications using network capabilities. How can this idea be monetised? In the main, there are two ways:

• Directly – where a charge is incurred when a transaction executed via an API or a consumer pays a supplier for access to an invocation of an API.
• Indirectly-where an end-used pays a supplier for an offering that has APIs bundled as part of the product.

This is a pretty – thought not entirely – new concept and there’s a growing realisation that considerable value can be unlocked from it. API enablement programmes that allow the core network to be linked with new applications that deliver added functionality to existing solutions makes a lot of sense.

In the telecoms world API monetisation is particularly interesting because operators have long sought to deliver such programmes despite the fact that to date, not many have succeeded. Why so? In large part it’s due to the lack of enabling solutions but that is now changing, and as a result proven API partner gateways are emerging. Indeed today, many telcos’ enterprise customers want to use APIs to maximise value by accessing their own communications and other network-based services so API gateways can open up a lucrative new profit centre for operators.

The opportunities are real

Adding communications capabilities (voice, location, call recording, conferencing and others) to enterprise applications (for example, CRM, ERP, etc.) to create new efficiencies and enhance productivity makes sense. The idea here isn’t new and the challenge until now has been how to crack the egg. Commercial API access can help drive the market by allowing operators to enable enterprise customers to innovate and build their own solutions while at the same time realising added value from their networks (and encouraging third parties to pick up the burden of innovation).

However, though demand exists, for enterprise CIOs considering commercial APIs, it’s not immediately obvious how to proceed to profit. Accruing the full value of technology infrastructures, the problem that API monetisation helps to solve, requires a mix of both business and technology inputs. Enterprises will need new internal approaches and structures to speed the development of the market for and uptake of commercial APIs and API monetisation, and those take time to emerge. This may be why API gateways have to date been a slow burn That said, as their enterprise customers business models evolve, operators can play an important role in helping them along.

A vendor opportunity in enterprise communications

For telco technology vendors, platforms for exposing APIs related to network resources to enterprise and systems integration partners represents an opportunity. Such innovative solutions are already in deployment, though the landscape and market generally remains nascent. All said, however, at eCS we have seen that the opportunities are there. There’s a thirst for innovation across the industry and sharing the burden of creating new solutions with customers and partners makes sense.