Reverse monetization is a term one customer used in a conversation. It was a while ago and they were one of the very few thinking about not only exposing APIs but also consuming them. I’ll try to explain why the ‘monetization’ term was used in conjunction with ‘reverse’ word and why it is important to think about how we use other people’s APIs.
In today’s API economy, most organizations are net consumers of APIs. It means they use more of somebody else’s API than they expose their own. Additionally, unlike with the internal APIs, used for integration or other purposes, these 3rd party APIs are very often becoming a part of business-critical use cases.
The customer I mentioned above, used the term ‘reverse monetization’ to explain their need to control how they use external APIs to, for example, prevent developers from happily testing a paid-for API which might result with a big invoice. Simply put, they were aware of other organizations directly monetizing APIs and they wanted to control their spending on it.
Nowadays, the need to manage 3rd party APIs is much more important than simply controlling ones spending on APIs. Consider a factious retail company. To operate and provide good customer experience they will use external services like shipping, payment processing etc. These services will be, most likely, provided via APIs and integrated with their systems. If one if these APIs experiences an outage, the entire business has an outage. For example, if the shipping API is down, out retail company cannot ship goods to their customers. If they cannot ship, customer satisfaction goes down and they leave. Same with payments API example. If they can’t process payment, they cannot fulfill the order, and again, customers leave.
APIs have become vital parts of mission critical systems and core business. They need to be managed, especially the 3rd party ones, over which organization have less control. What does it mean to manage 3rd party APIs? No, it’s not about registering it on an API Gateway, or not only about it. 3rd party APIs should be a part of organization business continuity planning (BCP). We need to know which external APIs we’re using, who’s providing them, what are the terms of use? Are there SLA? Is there someone to contact in we need it? How do I know an API has an outage? Hopefully not by seeing by shipping function in the online store erroring out? How do I recover from an outage? Is there a backup solution for the duration of an outage? Etc.
API Management, anyone?
