Pricing Tiers Works For SaaS But Not Really For APIs
09 May 2017
I get why SaaS, and API providers offer a handful of pricing plans and tiers for their platforms, but it isn't something I personally care for as an API consumer. I've studied thousands of plans and pricing for API providers, and have to regularly navigate 50+ plans for my own API operations, and I just prefer having access to a wide range of API resources, across many different companies, with a variety of usage limitations and pricing based upon each individual resources. I really am getting tired of having to choose between bronze, gold, or platinum, and often getting priced out completely because I can scale to the next tier as a user.
I understand that companies like putting users into buckets, something that makes revenue predictable from month to month, or year to year, but as we consumer more APIs from many different providers, it would help reduce the complexity for us API consumers if you flattened the landscape. I really don't want to have to learn the difference between each of my provider's tiers. I just want access to THAT resource via an API, at a fair price--something that scales infinitely if at all possible (I want it all). Ultimately, I do not feel like API plans and tiers will scale to API economy levels. I think as API providers, we are still being pretty self-centered, and thinking about pricing as we see it, and we need to open up and think about how our API consumers will view us in a growing landscape of service providers--otherwise, someone else will.
As I pick up my earlier API pricing work, which has two distinct components: 1) all API resources and pricing available for a platform 2) the details of plans and tiers which a complex list of resources, features, and pricing fit into. It would be much easier to just track resources, the features they have, and the unit price available for each API. Then we could let volume, time-based agreements, and other aspects of the API contract help us quantify the business of APIs, without limiting things to just a handful of API contract plans and tiers, expanding the ways we can do business using APIs.
As an API provider, I get that a SaaS model has worked well to quantify predictable revenue in a way that makes sense to consumers, but after a decade or more, as we move into a more serverless, microservices, devops world, it seems like we should be thinking in a more modular way when it comes to the business of our APIs. I'm sure all you bean counters can get out of your comfort zone for a bit, and change up how you quantify access to your API resources, following the lead of API pioneers like Amazon, and just provide a master list of API, CLI, and console resources available for a competitive price.