Freemium API Tools: Why Vendors Offer Them, What You Should Know

Apigee recently announced it’s making its enterprise-grade API management platform available free of charge.  At the same time, it unveiled a list of upgrades to the platform. Does this mean you can get something for nothing? It depends.

That’s because Apigee’s free model caps at 3.5 million API calls per month. For small businesses, that’s a reasonable amount but for heavy-use APIs, that won’t go far. Twitter’s API, for instance, exceeds 13 billion API calls per day.  If you’re API exceeds 3.5 million per month rate, you’ll have to bump up to the for-pay service. The first tier in their rate structure is $9,000 per month, based on traffic and storage capacity.

In his blog From the Home Port, Chris Haddad — the vice president of technology evangelism for Apigee competitor WSO2 — contends that limit could be reached by a successful business API.

“3.5M API calls a day translates into about 1.35 calls per second, which seems like a significant threshold, until you start running a majority of your business messages through their service offering,” Hadded writes.

It’s not unusual for companies to offer “freemium” products these days, which generally function by offering you a free service, then charging for support or as usage scales. In other software areas, it’s frequently seen in response to competition from open source alternatives, which tend to use this business model.

So why is Apigee offering the free enterprise edition?

“We did this in response to customer demand,” CTO Greg Brail stated in response to emailed questions. “With the app economy heating up, we've seen a dramatic increase in demand for good APIs, and we wanted to make it easy for any organization to establish and prove an API initiative with absolutely no risk.”

Apigee is not the first API management vendor to launch a freemium API service.

3Scale (a ProgrammableWeb sponsor) launched a similar offering in May, with free support for 150,000 API calls per day - or roughly 4.5 million calls per month. It’s first tier starts at $125 a month, with a 250,000 per day API call limit and goes up to the enterprise tier, which starts at $2,500/month for 5 million API calls a day.

There are also a number of open source solutions, including WSO2’s API Manager tool, which was announced earlier this month and is available for free download under the Apache license.  WSO2 uses a different business model, making its revenues from production support, which is $10,000 per server per year, plus development consulting and services. So the API management tool is available for free download and can be used without traffic volume limits.

Obviously, that’s a big difference in the pricing. And therein lies the key takeaway for IT leaders and developers: Beware the details.

API management vendors offer different types of solutions and services with their paid rates, which makes it difficult to compare apples-to-apples when shopping for an API management tool.

In addition to the fee structures, for instance, Apigee’s solution is managed via the cloud, with an option for on-premise, whereas other solutions are solely on-premise.
"Managing an API in the cloud is about a lot more than assembling software — there are a lot of operational concerns well when it comes to doing something like this in an efficient and reliable way, which we feel that we've addressed with the release of this service,” Brail stated.
The new release of the Apigee API platform includes:
  • A gateway service for safely exposing, managing and scaling APIs.
  • App services, which are built on open source technology acquired  from Usergrid, which includes support for features such as social graphs, user management, data storage and geo location, among others.
  • Developers Channel Services, so organizations can offer a developer portal.
  • Integrated analytic services for examining API data.
This year, Apigee made tech headlines for a number of investments that indicate the company is also be focusing on new business opportunities, particularly in the mobile device applications market.

The company acquired the mobile cloud platform Usergrid, the technology assets of Wholsesale Applications Community, and more recently,  InstaOps, a small Austin company that develops analytics software for tracking mobile app performance. All of which adds up to a significant investment in mobile applications management that extends beyond managing APIs.

In July, Apigee CEO Chet Kapoor told TechCrunch the company’s strategy will be “mobile first,” adding, “We’re going to do a lot more to help developers build mobile apps.”

If you'd like to learn more about Apigee, it offers an OAuth API to support authentication across multiple APIs.
Loraine Lawson Loraine Lawson is a freelance technology journalist specializing in covering data, all things integration — including APIs— and B2B supply chain management issues. She's been writing online since the days of hand-coded HTML pages. Lawson was a newspaper journalist but managed to jump ship just before "print journalism" made the endangered species list. Now she works almost exclusively online while managing a toddler, preteen and a really annoying but somehow lovable miniature Schnauzer/Jack Russell mix. The plants, who didn't complain, are now resting in peace.
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