At Axway, we understand that simply publishing a few APIs is not enough to bring about digital transformation. That’s why we support our clients for the long haul and actively participate in their strategic thinking, which often leads to a repositioning of activities in this new digital paradigm.
In 2023, for 70% of companies, digital transformation involves a stronger commitment to interacting with an increasingly rich ecosystem according to a recent study in France by Axway and the APIthinking collective on API exposure and governance strategies.
This commitment no longer requires merely opening up the information system, as many still believed just two years ago, with simple APIs (whether technical or business), but rather with true digital products. And the final step in drawing real value from these digital products is exposing them in an API marketplace, where they are easily discoverable, consumable, and monetizable.
Here’s an overview of some key findings from this study on the state of API marketplaces in French enterprises.
API marketplaces support a digital product strategy
Behind the term “digital product” lies not just a simple name change, but a new philosophy of exposing and engaging ecosystem developers who are always seeking greater simplicity in using these services.
It is somewhat akin to going from a pea in a field to a Del Monte can on a Costco shelf: it is an essential step in supporting the digital transformation of companies.
Our survey finds that most enterprises are exposing digital services in one way or another.
The shift to digital products also implies exposing said products in a marketplace: an enterprise-level tool which allows you to easily discover all your services, display them on portals for your producers and consumers (internal, external, or both), compose digital products, monitor usage in real time, and monetize them.
The way enterprises are leveraging marketplaces (or not) varies:
As seen in this graph, internal exposure remains the primary use case, but it’s encouraging to see 22% of respondents exposing digital products and services on an external marketplace.
As for how they approach the technology question of an API marketplace: a third of these respondents have chosen to develop their own custom marketplace, while another third has acquired a vendor marketplace and manages it in-house.
Meanwhile, the rest have either outsourced management entirely or have yet to define a technology base. In our experience it makes sense for companies with a real API production machine to invest in enterprise-level tools such as an API marketplace.
We’ve seen companies spending upwards of $1,000,000 a year trying to build their own marketplace, only to realize that it has become an ongoing cost because they have to modify it and tweak the automation, the look and feel, adding new features…
As my colleague William McKinney notes in a recent video, “that's just not the business most companies are in.”
Out of all of this, we still have work to do: only 7% of respondents have launched a genuine business transformation – a “platformization” shift – by exposing APIs in a marketplace open to external producers. What a missed opportunity!
In contrast, I find BPCE's vision of the marketplace to be an interesting one: the second-largest French banking group is using it as a platform for the in-depth transformation of their business.
Capitalizing on the mastery of their information system thanks to Amplify’s API management platform and marketplace, they have designed a strategy of inviting fintechs onto their marketplace, who will then sell their services through the BPCE marketplace. This allows the bank to earn commissions on the sale of digital products they don't operate, similarly to Apple’s app store.
WATCH: Vincent Mouden, Project Manager for BPCE’s API Factory, and I discuss their digital journey in the video interview below.
Modern enterprises that are serious about APIs need tools that enable them not only to have an automatic inventory thanks to a universal API management foundation, but also offer metrics concerning the concrete use of these services, their level of security, their exposure perimeter and user typologies.
These metrics, offered by tools like Amplify Enterprise Marketplace, will be needed at some point to answer questions from the line of business, who will inevitably realize that these API services are new distribution channels for their products.
API monetization strategies that work
37% of respondents in our survey say they have defined a monetization model for their digital products.
As an observer of this market since 2012, I’m very surprised at this 37% figure. The question of API monetization goes back at least a decade now.
It should be pointed out that, of the 37%, a good third has defined a monetization model based on free access. Despite this, the fact remains that this figure seems a little far from reality.
For the past four years, we’ve been encouraging our customers not only to identify monetization models, but also to study the value of APIs and digital products more broadly.
In fact, we’ve had a lot of feedback from customers who have found either indirect monetization or service-based monetization opportunities.
An example of indirect monetization can be illustrated by the case of DBS (Bank of Singapore), which has opened up its relationship onboarding (a process that can cost several hundred euros) to the fintech ecosystem. The bank saves on this costly step by opening up free APIs to its partners, thus making an indirect gain with each onboarding.
Real-life API monetization models
When it comes to enhancing the value of services, some banks, for example, open up their services free of charge so they can offer their customers the innovations provided by the ever more ingenious fintech ecosystem. This innovation helps to reduce customer attrition.
In the industrial sector, enterprises like Bosch show that opening up APIs, even free of charge, can be a real win-win situation. This openness has enabled Bosch to gain a unique position: by exposing APIs for the electric motors of their bicycles, startups can create accessories and services that form an ecosystem which builds customer loyalty (geolocation, training, sports, connection to Strava, etc.).
So, it’s vital to think of all the possible ways of adding value when building your API strategy, rather than stopping at a simple exploration of monetization, which could quickly show its limits and hamper any project.
The French Banque des Territoires, part of the Caisse des Dépôts (government investment bank), is a great case study in this regard, offering up a customer-centric vision for financing local government projects. They shared their strategy in a workshop with us earlier this year, explaining how they built a strategy around their customers’ entire journey, not merely with the transaction of a loan.
For example, the bank offers loan financing for projects around water infrastructure renovations and resource preservation. They saw a gap as local governments weren’t investing in these projects when there was clearly a need: consider for example how in summer of 2022, more than 800 communes suffered from a drinking water shortage.
They built a marketplace to connect local government leaders and decision-makers with the network of government organizations, companies, and digital services that respond to these water-related needs. And of course, it also helps connect these actors to the Banque des Territoires for financing the projects.
Note how their strategy goes beyond merely monetizing a loan API, but rather goes into building a marketplace that simplifies the whole journey and facilitates contact with local players. Other marketplaces they’ve built include a “smart city” marketplace, a notary public marketplace, and a corporate venture marketplace.
Blockers and solutions in API strategies
Enterprises face a number of obstacles in choosing (or not) to exhibit their digital products in a marketplace. The greatest struggles were around a lack of resources (34%), ecosystem immaturity (33%), and difficulty in choosing the right monetization strategy (27%).
As for ROI, many enterprises tell us they feel it’s too early to begin to measure (38%) – and another 35% aren’t sure yet how to measure ROI. 19% are measuring some early ROI progress and finally 8% consider their marketplace as a key value creation lever.
ROI comes by creating a marketplace to engage in a wider ecosystem, and having a true strategy around the development of these APIs which are currently available free of charge.
When you’re talking about innovation, we will all experience failure at some point – but it’s a well-known truism that if you don’t fail, you’re not innovating. So, as they say, check your parachute before you jump out of the plane: as you’re exploring API monetization strategies, you want to be sure you have a solid API organization on the backend so that you can easily evolve and remodulate your strategy as you go.
Making a digital product doesn't necessarily mean taking an API, or even 100 APIs, and exposing it on a marketplace: there's a whole recipe, an alchemy in the realm of innovation. It’s why it’s helpful to have a solution that gives you the ability to make mistakes; meaning, you can test a product and if it doesn't work after 15 days or a month, you can change it without it being a significant investment.
This is where metrics bring value – knowing how the API product is being consumed, how much it costs, and how much it's costing your customers – as well as having the tools that allow you to drag and drop, redesign, recompose your products, change the pricing model, maybe even change the way people identify themselves on your site or integrate with other sites.
A solid API marketplace gives the openness and flexibility be able to innovate and make mistakes.
A final note: 46% of respondents to our survey said they would like to benefit from other companies' experiences to improve their own strategy. Another 28% wish they could benefit from consulting on their digital strategy.
Amplify Enterprise Marketplace provides the essential tools to make this enterprise-wide shift, transforming APIs into digital products and adapting your business model to this unavoidable new business lever. And when it comes to the guidance and exchanging with others traveling the same path, we are here to support and advise you along this new strategic journey.
For more enterprise API strategy, discover our Q&A video series on making an API marketplace a success for your business.
Téléchargez l'infographie présentant les résultats complets du baromètre ici.
About the Author
More Content by Emmanuel Methivier
