Measuring API usage - how to monetize your API

Immediately after you establish your initial pricing plan and release your API, you must start measuring your customers’ API usage. Customers’ usage patterns reflect exactly how much your API is worth in both the short-term and the long-term.

For some pricing models, collecting usage data is absolutely essential. For example, if you don’t know how many calls each customer makes into your API, you can’t charge them using the Pay Per Call model. And if you’re selling Pay Per Month subscriptions that limit customers’ usage to a certain number of calls/month, you need to know when customers have hit that limit.

But usage data really shines when you begin long-term pricing and product planning. After you’ve analyzed a significant amount of usage data, you can adjust your pricing and product plans to take advantage of the trends and patterns you find.

For example, if customers use one specific feature of your API more than others, you could spin that feature off into its own product with its own pricing plan. Or, if you find that customers are making enough calls to merit creating a separate Pay Per Call pricing plan, you can start transitioning customers to that plan.

While you might be able to directly measure API usage yourself, there are a number of third-party API management services that can comprehensively track these metrics for you. For example, Azure API Management includes the Azure Monitor, which tracks a number of API usage metrics and even allows you to create alerts based on those metrics. (And remember, Thriftly allows you to easily integrate your APIs with Azure.)

(Read the conclusion of the How to Monetize Your API series. Click the following links to review part 1 and part 2.)