API as Product: With Volume Comes Lower Prices

Adam DuVander
Feb. 07 2012, 01:06PM EST

Amazon just dropped prices on its popular Amazon S3 API, which provides storage to much of the web. The service will pass 1 trillion objects stored this year. With that volume comes opportunities to lower the costs, as we've seen from other companies whose entire product line includes APIs.

The Amazon announcement post shared the new pricing:

"We continue to innovate on your behalf to drive down storage costs and pass along the resultant savings to you at every possible opportunity," Amazon's Jeff Barr wrote.

GigaOm says it's about getting even more traction:

Many feel the company’s real end-game here is to get more businesses to put more of their data into its ecosystem. Once it’s there it’s a no-brainer for companies to make use of these other Amazon services. The net, net, net here is that Amazon wants everyone to use more of its core services — AWS is the leading high-volume, low-margin provider of these infrastructure services and the company wants it to stay that way.

TwilioIt may be less about innovation and traction and more just sheer volume. Twilio announced volume pricing for its Twilio SMS API. This, after lowering its regular price twice in two years. Because of the volume usage across its infrastructure, Twilio (a ProgrammableWeb sponsor) was able to take its original three cent price down to two cents and then one cent per SMS message.

Twilio has had the same experience with its Twilio Voice API, which has had public volume pricing for some time. There have also been other price drops for Amazon's other services in the past. What these price reductions display is that infrastructure-as-a-service companies are scalable businesses and an API doesn't only have to support a product. The API can be the product.

Adam DuVander -- Adam heads developer relations at Orchestrate, a database-as-a-service company. He's spent many years analyzing APIs and developer tools. Previously he worked at SendGrid, edited ProgrammableWeb and wrote for Wired and Webmonkey. Adam is also the author of mapping API cookbook Map Scripting 101.

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