Perhaps the most important part of any monetization strategy is the effective selection of API billing metrics. Billing metrics form the backbone of your monetization strategy, and giving ample thought to what – and how – to monetize will pay long-term dividends both in economic terms as well as management ones.
Today, we’re going to look at what API billing metrics actually are, and how they related to your long-term monetization strategy. We’ll look at two very different approaches – one from Apigee, and the other from Moesif – and see how each handles a variety of monetization metrics.
What is Apigee?
Apigee, acquired by Google in 2016, is a full-service API management platform. It encompasses a broad array of functionalities for API creation, deployment, and management. While Apigee’s comprehensive and robust features make it a great tool for a lot of environments, its complexity and idiosyncrasies can pose significant challenges in practice, impeeding customer success.
What is Moesif?
Moesif is a sophisticated solution for API monitoring and analytics that specializes in real-time analytics and insights. This enables businesses to effectively scale their data-driven monetization efforts, swiftly address issues in API operations, and unlock new revenue modalities. Known for its user-friendly interface, Moesif facilitates the implementation of complex monetization strategies, offering extensive support for a variety of environments and paradigms. Moesif excels at usage based billing, enabling businesses to deploy customized pricing and billing meters to charge users based on their API access and API usage.
What is a Billing Metric?
A billing metric is, put simply, the thing that you charge for. Billing API usage can have a multitude of potential points where monetization can kick in, and these points are often variable from product to product, even within industries. At its most basic, a billing metric is the unit of usage or service that can be measured and charged for via invoice, and is the basis of all monetization strategies, regardless of the particular billing system implementation at hand.
As an example, a provider can bill for something very simple, such as API call volume. In this billing metric, the sheer number of calls is what we base the billing on, but this can have serious drawbacks – if a single call only takes 4kb of data to do what it needs to do, should that really cost the same as a request that takes multiple megabytes and touches more than one API endpoint, as would be the case with AI photo generation or audio manipulation? When building your subscription model, understanding the current endpoint and API usage and fluctuating load on your internal infrastructure can help guide your payment structure.
Data transfer could also easily be the billable metric, but in that case, what happens when the complexity of the request is variable? Two users might get the same end product – say a 1mb image – but one user may have requested something that was easily processed with existing cached resources while the other might have requested something altogether new and complex requiring more API access or additional resources.
For this reason, selecting your billing metrics is vital. The following is a brief overview of some common billing metrics:
‘’’Call Volume’’’ – the total number of calls made in a period of time.
‘’Data Transfer’’’ – the total amount of transferred data between server and client.
‘’Compute Requirements’’’ – how much computational resources were utilized.
‘’Transaction Volume’’’ – monetized based upon the number of transactions, even when those transactions are part of the same batch of calls.
‘’Function Tier’’’ – bills based upon the kind of functions requested, e.g. how complex the transformation or service is compared to relatively simpler tasks.
Apigee Billing Metrics
Apigee allows for a variety of billing metrics, but these metrics are roughly divided into two categories.
First, there are “default” metrics. These are found as part of the core product offering – for example, via the Rate Card configuration system, you can set billing metrics by flare rate per transaction, you can charge via bundled Volume Bands, etc. Via the API Product Bundles offering, you can charge for access to specific tiers of functions, limiting users to specific function groupings.
Next, there are the “custom” metrics. Custom metrics in Apigee allow you to set billable metrics outside of the default offerings. Because the default offerings are largely based around volumetric measurements, there are times where you will want to enable something else – in this case, Apigee provides some custom subscription solutions that you can utilize based on your user’s historical usage data.
The biggest drawback with Apigee’s approach is that everything is largely separated into their product category, which makes managing combinatory metrics – for instance, a tier system with a combinatory volumetric billing process – pretty cumbersome.
Moesif Billing Metrics
Conversely, Moesif is very straight-forward for billing and governance. Moesif utilizes the Billing Meter product offering to present a few pre-set metrics for pre-configured monetization within a billing account. These include:
‘’’Event Count’’’ – the total number of requests that are made to the API and any API endpoint.
‘’’Unique Users/Keys’’’ – the total number of unique users or sessions utilizing the API.
‘’’Average Latency’’’ – an SLA-specific monetization strategy that allows you to set a latency metric for API usage.
‘’’Request Body Count’’’ – a metric based around the total number of elements in an API request body.
‘’’Response Body Count’’’ – a metric based around the total number of elements in an API response body.
Moesif also provides a “Custom Metric” option, which allows you to create or calculate a metric based on any available data from the request or response flow within your app.
The huge benefit here is that these metrics are bundled under a single product offering, and as such, there’s very little complexity across systems. If your API has a Billing Meter, you can create a variety of monetization strategies without making any changes to the underlying API or managing any gateways or routers. This also makes combinatory metrics much, much easier – simply create the proper Billing Meter collection and you’re good to go!
Ultimately, the main difference here is in how deep you’re integrated with Apigee and the Google Cloud Platform. Apigee is quite powerful, but on the road to that power, it has become a very complex cloud billing API and app development option. This complexity passes through to the customer, and while simple monetization strategies won’t notice this at first, more complex ones will quickly find that the added complexity only gets in the way of monetization and revenue generation.
Moesif, on the other hand, has taken a monetization-driven approach from the beginning, meaning that everything is simplified and streamlined to get you monetized quickly and with little overhead. When implementing simple monetization strategies, you can spend five minutes in the backend and walk away with an effective strategy. When doing something more complex, this doesn’t grow substantially with each additional step – you can simple create a new Billing Meter and have your system ready to go. Enacting a usage based billing system shouldn’t be a headache; with Moesif, billing API products based on real-time user data is a breeze. Just because an app is complex doesn’t mean billing information has to be, too.
Much of this will obviously depend on how complex your billing situation is – ultimately, if ease of implementation is your priority, it’s hard to argue against Moesif.