DO APIs REALLY MAKE MONEY?
Many businesses have been trying to get into the “API-Fication” process over the course of past couple of years and many tech giants have been trying to join the journey ever since. Telcos were also trying to be a part of this paradigm shift with hope that it will double their revenues. Nevertheless, only a very few of those early adopters who opened up their APIs in the hope of succeeding in the journey claim to have achieved what they initially planned. However in reality only an even smaller number of telcos have truly benefited from this strategic move achieving exactly what they planned i.e. to bring in new recurring sustainable revenues!.
All in all, it is clear that to overcome the revenue pressure in digital services sphere telcos have to disrupt in their service delivery strategies eventually. Yet, the remaining concern is whether it is really possible for telcos to make money just by merely opening up APIs? The answer is rather obvious looking at the small number of instances telcos have succeeded.
If the telcos are to remain at the forefront of money making and lead market domination a new business model should be implemented. Merely opening up your APIs are not enough to make recurring revenue in the long run.
The business model of traditional API management platforms were to charge for the number of API calls being made. This was the existing business model when telcos initially started to adapt to the concept of opening up their APIs.
Realistically, Telcos can fail to achieve their target of earning recurring sustainable revenue merely by just counting the number of API calls! Instead, they should focus on having an open platform encouraging more services to be spawned to monetize on. They should focus more on extending a platform where both tech savvy and non tech savvy individuals can easily deploy their ideas into innovative services, and earn revenue attracting more service creators to join them on board. Instead of charging for each API call Telcos can introduce a fair revenue share model on a platform where everyone can easily make a sustainable business out of it while receiving a revenue share for their efforts. This would depict their ecosystem as a platform where app creators would feel comfortable enough to come in and build their own sustainable businesses rather than one for which they have to keep making payments before even they see their revenue coming in.
It is the time that telcos realize that leveraging telco assets to spearhead competitive advantage is not solely dependent on opening up telco APIs, but on enabling to create more services to monetize on!
Learn more about our Service enabling Platform helping Telcos to bring in new revenues
Visit us at MWC 2016