Understand monetization

Overview of monetization

As an API provider, you need an easy-to-use and flexible way to monetize your APIs so that you can generate revenue for the use of those APIs. Monetization, a feature of Apigee Edge Developer Services, solves those requirements.

Rate plans: Using monetization, you can create a variety of rate plans that charge developers (or pay them through revenue sharing) for the use of your APIs, which are bundled into packages. The solution offers an extensive degree of flexibility: you can create pre-paid plans, post-paid plans, fixed-fee plans, variable rate plans, "freemium" plans, plans tailored to specific developers, plans covering groups of developers, and more.

Reporting and billing: In addition, monetization includes reporting and billing facilities. For example, as an API provider, you can get summary or detailed reports on traffic to your API packages for which developers purchased a rate plan. You can also make adjustments to these records as necessary. And you can create billing documents (which include applicable taxes) for the use of your API packages and publish those documents to developers.

Managing the monetization environment: You configure and control your monetization environment with a management UI and API. The UI is integrated into the Edge management UI, and the API lets you perform all the functions available in the UI.

Monetization also provides a developer portal through Edge Developer Services. The developer portal includes monetization-related content that an API provider publishes for viewing by a developer, such as a catalog of available API packages and rate plans for each package. As an API provider, you can take advantage of the monetization features in the developer portal or integrate monetization features into your own developer portal.

Understanding monetization concepts

This section introduces the basic concepts of monetization.

An API product is a collection of RESTful API resources presented to developers as a bundle. To access those APIs, developers send an API key with requests, which uniquely identifies the developers and their apps in Edge. As an API provider, you now know who is calling your APIs, and you can measure all kinds of data through analytics. At this stage, no monetization is involved. (To learn more about API products, see What is an API product?)

With monetization enabled, API products get an additional piece of functionality called a transaction recording policy. With API calls going through API products, you need to determine which of those calls are considered transactions for monetization. The transaction recording policy contains those rules, which you define. For example, if the response.reason.phrase flow variable has a value of OK, that counts as a transaction.

The next step is grouping the products you want to monetize (along with their transaction recording policies). Enter the API package, which lets you bundle one or more products into a single monetized container. Now you have all the API proxies you want to monetize in a single bundle.

Next is to determine how and what to charge for successful API calls, or transactions. Flat rate per transaction? Charge an initial signup fee? Start free and then start charging? Share revenue with developers? All of the above? That's what rate plans determine. On any given API package, you configure the rate plans you want, developers sign up for the rate plans they want to use, they use your APIs, and they pay you (or you pay them) based on the rate plan conditions. You can either bill them, or they can maintain a pre-paid balance through an integrated payment provider such as Worldpay.

Once money is flowing, however, so is the need for water-tight record keeping for billing and reports. If you changed product and transaction recording configurations on the fly, past transactions would be difficult or impossible to reconcile with product configurations that may have changed. When you create an API package, you take a frozen-in-time snapshot of those products and transaction recording policies. And when you publish rate plans, those configurations are frozen as well, all of which supports billing and reporting integrity. You maintain a solid "paper" trail, and developers continue to use exactly what they signed up for.

Your API products and packages are scoped to your organization, the top-level container for all the objects (including APIs and developers) defined in your Edge account.

Next steps

The Edge configuration team does the initial setup of monetization for your organization. After the configuration team creates the initial configuration, there are a number of things you need to do to further set up and use monetization. Learn what the configuration team sets up and what further steps you need to take in Steps to set up monetization.