API Business Models

The Future of APIs and API Monetization


APIs are the “glue” that connects modern computer applications. Nearly every application uses APIs to connect with internal data sources, third-party data services, or other applications. You are using APIs to read this article.

To find out more about the future of APIs, I talked with Gail Frederick, who is the General Manager of eBay Portland and the Vice President of Mobile and Developer Ecosystem at eBay. Gail recently gave a keynote at the API Specifications Conference 2019. Gail’s keynote focused on the impact of APIs on eBay’s revenue, business strategy, and tech stacks. The event brought API practitioners together to discuss the evolution of API technology, and included topics like the OpenAPI Specification, RAML, API Blueprint, gRPC, OData, JSON Schema, GraphQL, AsyncAPI, and other formats, enabling attendees to get familiar with these formats and discuss how to use them in practice. In our talk, I asked Gail about the future of API development and how companies can best monetize APIs.

What Is Your Vision of the Future API Stack?

First, the future API stack is secure. There is a lot of information and prioritization around cybersecurity and endpoint security, but sometimes API endpoints are overlooked. While OAuth is not new, the use of OAuth is essential to control fine-grained access to APIs.

Second, APIs must enable personalization and experimentation. Companies need the ability to control and test API capabilities so that we can personalize search results as easily as we personalize user experience. We continuously experiment with search rankings and results to better serve our sellers and buyers. eBay is a search-driven marketplace. APIs must be designed so they can support personalization and experimentation.

Third, the future API stack must be device-agnostic. APIs should understand if they are talking to a desktop or mobile device, or communicating across limited bandwidth, and adjust the fidelity of their responses accordingly. If your client pulls data from a massive data center over a LAN connection, it’s probably fine for APIs to allow access to several GBs of data. If that same API call is over a cell connection, the services need to send a more brief and suitable response. APIs need to be device-agnostic and adaptable.

Fourth, APIs need to adjust automatically to user behavior. eBay buyers and sellers use our APIs to add vibrancy to our marketplace and our ecosystem. Today, when our best buyers and sellers grow their businesses quickly, their API calls spike, which trips rate limits and prevents future calls. The future API stack recognizes the business value of each caller, observes their API calling behavior, and adjusts rate limits to unlock growth while also protecting eBay infrastructure. I cringe when we get a call from a good developer saying, “I exceeded my rate limit at 5 PM.” AI-driven behavioral analysis and access control changes are good for our marketplace.

All four of these actions are possible today. Every organization can adopt them differently based on how their platform uses APIs.

What Is the Most Significant Barrier to Monetizing APIs?

“Monetizing APIs” is an outdated model. We don’t monetize APIs — we see APIs as the front door to eBay. Why close the door? Instead, we provide free and accessible APIs to accelerate and drive business. That wouldn’t be possible if we were charging for access.

In other words, monetizing is a barrier. We want to encourage the use of our APIs by giving authorized developers access to the same breadth of eBay capabilities as we have in the website or our apps. And we need to provide developers with a great user experience with our API. By this, I mean that we need to build APIs that are semantically related to eBay, have the same uptime expectations, and are just plain easy to use.

Freely available APIs need to be maintained and modernized, so they do not become a barrier to future adoption. eBay was an early adopter of APIs, back when SOAP was ubiquitous. Now, SOAP APIs are a barrier to younger developers using modern frameworks. That’s one of the reasons we decided in 2019 to upgrade our API portfolio to RESTful APIs.

Why Is eBay a Member of the OpenAPI Initiative?

It’s simple: developer productivity. eBay no longer produces SDKs. Instead, we produce OpenAPI specs, and developers generate their SDKs in any language they’d like to use. We see firsthand our partners’ business and technical productivity wins when they use the OpenAPI Spec.

Using OpenAPI Specs enables our developers to integrate with eBay and get on with their core business. They don’t have to write boilerplate code anymore, and can instead focus on leveraging our APIs to improve their business. While eBay has some hobbyist developers, the majority of our developers are professionals that need efficiency and speed. Recently, we demonstrated the efficiency of OpenAPI Specs in a video on YouTube. This video demonstrates one way we’re delivering developer value through APIs.

What Did You Take Away From ASC 2019?

I spent about ¾ (three-fourths) of my effort on Learning and ¼ (one-fourth) on Teaching.

¾ Learning

I attended ASC 2019 to look at emerging technologies and evaluate which can be added to the eBay developer ecosystem. A few examples include the maturity of GraphQL and considering the right time for eBay to explore streaming technologies in our APIs.

I also went to learn from industry peers. In particular, I looked at best practices integrating APIs and mobile devices, as well as how other people define API Security. We have a strong opinion at eBay, and I wanted to explore other use cases and perspectives.

¼ Teaching

My talk focused on API security and understanding developer behavior. Our approach is called “Know Your Developer (KYD),” and it’s critical to eBay’s continued success. We use behavioral analysis to understand on-platform behavior and compare it with developers’ stated use cases. If they match, it’s win-win. If they don’t, it is an opportunity to have a conversation with developers to help white-glove their experience and improve their integration. When we analyze a developer’s attestations, usage, and identity, we can drive the best outcomes for eBay buyers and sellers.

This article originally appeared here.

Jesse Casman

Jesse Casman

President, Oppkey
Jesse Casman is a veteran marketing executive, industry analyst and systems integrator with special expertise in open source, Asia IT markets and security. Most recently, Casman worked with multiple open source, development, and Japanese clients at Page One PR. Previously, Casman led marketing at two venture-funded security start-ups as well as with a graphics software company spun out of SGI. He has also served as acting president of an international Linux company based in Tokyo. Earlier in his career he was a Tokyo-based technology analyst covering open source software, security, and the Japanese technology market. He is the co-founder of Kachina Technology, a systems integration company in the United States that specialized in creating e-commerce Web sites built on open source software. He holds a BA in East Asian Studies and Japanese from Connecticut College and an MA in East Asian Studies from Stanford University.

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