Ron Huber

Ron Huber is the CEO and co-founder of Achieve Internet. He's an experienced senior executive with over 15 years managing and leading software teams in the online media, Internet, and software development space.

About the Author

Considering that nearly 90% of developers use APIs when building software and applications and 69% use third-party APIs, API monetization has never been more crucial for unlocking new revenue streams.

A lot of tools exist in today’s market, but AWS API Gateway, or Amazon API Gateway, is one of the most popular options developers choose to monetize their APIs.

In this post, we'll look break down how to use your AWP API Gateway to monetize your APIs, and why it may not be your best option available.

A Quick Recap of API Monetization

API monetization is transforming your APIs into revenue drivers for your business.

There are many different monetization models for you to use, but some of the most popular ones include

  • Tiered where customers buy into a specific tier that meets their usage needs.

  • Bulk cost/pay as you go where customers only pay for what they use versus paying for a subscription or tier.

  • Subscription where customers pay a flat rate to access your APIs.

To help you develop an effective monetization strategy, some important questions would be:

  • Who's going to use your APIs?

  • What capabilities will they need?

  • What integrations will you need to support your APIs?

  • How will you determine which pricing model is best for your business?

  • Who's going to be responsible for governance and admin?

  • How are you going to market and promote your API products?

If you're not sure how to answer these questions, there are specialists who are willing to help you—now, let's get into how AWS approaches API monetization.

AWS API Gateway and Monetization

First, let's take a look at how the AWS API Gateway works. The AWS API Gateway is a fully managed service that makes it easy to create, publish, maintain, monitor, and secure your APIs.

It handles a lot of the heavy lifting of managing your APIs, so you can focus on building great products.

The AWS API Gateway lets you set up pricing and usage plans for your APIs, as well as track and monitor usage.

Since AWS API Gateway is integrated with AWS Marketplace and AWS Data Exchange, it lets you easily monetize the APIs you've built with the API Gateway. However, you'll need to configure their AWS API Portal or integrate your own API portal before setting up your monetization.

AWS Monetization Models:

Now that we've covered some basics, let's get into the AWS API Gateway's monetization models.

If you plan on selling your APIs through AWS Marketplace, you'll need to bundle your APIs together to create a software as a service (SaaS) product. There are three primary ways AWS API Gateway lets you monetize your APIs:

  • SaaS subscriptions: This is their usage-based pricing model (even though the label may be misleading). Consumers follow a pay-as-you-go structure and are billed based on their API usage. With usage-based pricing, you can easily scale your prices up or down as demand changes.

  • SaaS contracts: This is a subscription-based model where consumers are either billed in advance or payments are made on a recurring basis.

  • SaaS contracts with pay-as-you-go: This hybrid pricing model locks consumers into a subscription but lets them pay for additional usage as needed.

Additionally, you have the option to monetize (via subscriptions) your data-based APIs through AWS Data Exchange.

Benefits of Using AWS API Gateway to Monetize Your APIs