API Governance and Monetization - The evolution of API governance

In this session, we will discuss the journey of API governance from its initial, ungoverned state to the development of sophisticated models that tackle contemporary challenges. We'll explore how APIs have become essential in the intersection of business and technology, adapting to advancements and evolving needs. We'll focus on how organizations have moved from launching to monetizing APIs, using models like pay-per-use and subscriptions, and finding the right balance between technical implementation and business strategy. We'll also highlight the impact of governance on monetization strategies, especially how data security, compliance, and service quality influence pricing. Real-world examples will demonstrate the effective integration of governance with monetization, including AI's role in dynamic pricing. Looking ahead, we'll share insights into future trends in API governance and monetization, emphasizing the importance of adaptability, continuous learning, and innovation.

1. API Governance and
Monetization
Sanjeewa Malalgoda
Director - Engineering
WSO2

2. ●I’m the technical product manager for WSO2 API Manager and API
Platform for Kubernetes, with 14 years of experience in software design
and development.
●Technology areas
⦿API management and integration
⦿Docker, Kubernetes
⦿API gateways, high performance gateways
●Connect with me
⦿LinkedIn - https://au.linkedin.com/in/sanjeewa-malalgoda
⦿X - https://twitter.com/sanjeewa190?lang=en
About Me
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3. ●Evolution of API management
●APIs as digital products
●API governance and practical usages
●API governance best practices and sample framework
●API revenue models and monetization
●Implementation of effective API monetization strategy
Agenda
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4. Evolution of API Management

5. Evolution of API Management
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●Some questions we posed in the early days
⦿How do you change the authentication mode for a given API?
⦿How do you manage access control for different roles and permissions for the same
API?
⦿What steps are taken to help consumers easily use APIs? Do you provide
documentation?
⦿Are auto-generated SDKs and documents provided? Is there a user-friendly portal for
developers to browse and use APIs?

6. Evolution of API Management
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●Web services evolved to meet specific requirements, allowing backend
developers more freedom.
●API management facilitated coordination among different teams and
simplified service integration.
●APIs increasingly served as the primary external interfaces for services.
●Governance became increasingly prominent as the importance of APIs
grew.

7. API Layer
Consumer engagement
Evolution of API Management
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Analytics data capturing
Logging
Business Insights
Usage Metering
Payment
Service Discovery Mediation
Transformation
Permission Checks
Authentication
Anomaly Detection
Rate Limiting
Tracing
Billing
Client
Access Data
Backend layer
Handle specific
business logic and
rely on information
passed from API
layer
Work with the
data layer
Data
Layer

8. APIs as Digital Products

9. Transformation of APIs into Marketable Products
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●Shifting Perspective: APIs are no longer
just technical interfaces but are
increasingly viewed as digital products
that drive value for businesses.
●Characteristics of Successful API
Products: Successful API products are
easy to use, well-documented, scalable,
and offer clear value propositions to
developers and end-users.

10. Transformation of APIs into Marketable Products
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●Feature Rich: Like physical products, APIs
now come equipped with usage
metering, documentation, and toolkits.
●Customer Orientation: Designed to meet
customer needs, making them akin to
consumer goods in the digital space.

11. Implementing Governance for API as Digital Products
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●Introduction of Governance: With APIs becoming a key customer-facing
element, governance has become crucial to maintain quality and security.
●Establishing Guidelines: Organizations are now setting up specific
processes and guidelines to manage these APIs effectively.
●Enforcement of Best Practices: Focus on enforcing best practices to
ensure APIs are reliable, secure, and user-friendly for clients.

12. Why API Governance Matters
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●Security: Protects sensitive data and prevents unauthorized access.
●Consistency: Maintains a consistent experience for developers using your
APIs.
●Reliability: Guarantees APIs are available and function as expected.
●Visibility: Provides insights into API usage and performance.
●Reduced Costs: Efficient API development and management saves
resources.

13. Practical Applications and Governance
of APIs

14. Some Experiences
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●Some do not have clear idea
about how many APIs exposed,
whether they follow security best
practices etc.
⦿Some major organizations have
recently suffered significant data
breaches due to neglecting basic
API best practices.
⦿One of our own user recently told us
that they have around 1,000 APIs,
but they really do not need that
many.

15. The Importance of API Governance in the Present Era
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● Many organizations have developed
APIs rapidly over the last decade.
●These APIs often have security flaws.
●Data breaches result from these flaws.
●Strong governance is essential for
security and compliance.

16. Best Practices and Frameworks for API
Governance

17. API Governance
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API Design Phase
API Development Phase
API Testing Phase
API Deployment Phase
API Consumption Phase
API Retirement Phase

18. Future Directions for API Governance

19. Future Direction
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●API governance will prioritize a
seamless developer experience.
●New security protocols with threat
protection and tokenization will be
prominent.
●AI will automate tasks, identify
anomalies, and optimize API
performance.
●Standardized governance
frameworks will simplify API
management across organizations.

20. API Revenue Models and Monetization
Strategies

21. API Governance and Monetization
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API revenue models and governance are linked because:
●Access Control: Defines user tiers and pricing.
●Quality Assurance: Supports premium pricing with reliable services.
●Compliance: Ensures the API is secure and meets legal standards, attracting
paying users.
●Usage Limits: Enables tiered pricing models based on user consumption.
●Monitoring: Helps refine pricing by analyzing user behavior and API
performance.

22. API Revenue Models
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Direct API Revenue Models
Users are charged for each API call.
Users pay a recurring fee for API access, often with tiered options.
Multiple plans offer different levels of access and features.
Indirect API Revenue Models
Basic services are free; advanced features cost extra.
Revenue is generated by selling data or insights.
APIs promote other products or services.
The API is free but includes advertisements.

23. Implementing an Effective API
Monetization Strategy

24. Role of API Management Platform in Effective API Monetization
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Usage Tracking: Log API calls for analytics and billing.
Billing Integration: Automate billing based on usage.
Rate Limiting: Set usage limits to prevent abuse.
Subscription Management: Handle sign-ups and plan changes.
API Gateway: Manage API traffic and enforce policies.
SLA Management: Track and manage service level agreements.
Scalability: Automatically adjust to increased usage.
Developer Portal: Provide easy to use platform for API consumption.

25. Question Time!
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26. Thank You!