There is growing proof that the API is a core value piece for selling software and services. The latest example of this emerging form of commerce comes from AppDirect, a cloud marketplace provider that is launching an API platform for connecting developers and resellers. Just out of private beta, AppDirect has signed about 1,000 developers.
The iOS and Android app stores are core channels for developers. But more recently, third-party marketplaces have emerged that provide a different avenue for developers to sell apps.
AppDirect provides developers with a way to connect with channel reseller partners that are using the platform. In this way, a developer making legal software can point an API to the partner selling the technology. Identity, provisioning and billing are the key endpoints that serve as the foundation for the service.
AppDirect standardized on OpenID but can also integrate with identity solutions such as SAML. The provisioning API allows a channel reseller to offer a service without having to do a custom set-up. The billing API allows for fixed and variable pricing, as well as metered services. Fixed pricing would be a subscription service that charges on a monthly basis. A metered service charges on a usage basis, such as per gigabyte per hour.
AppDirect’s distribution API sends the developer’s information to different marketplaces. The developer then gets charged according to the rates set by the channel partner. Marketplace fees are similar to the app stores with a 70/30 split, which improves for the channel reseller if more services are offered. It might be a 65/35 split or 60/40.
APIs are nascent in the mainstream market, and it will take some time for traditional channel resellers and old-school software providers to adapt. The challenge is in building the developer market and training channel resellers and their customers on this new way of distribution.
API platforms to manage purchases and payments are starting to become more common. 3Scale has this kind of service that it offers out-of-the-box, and Apigee has just launched its own service allowing customers to manage API-driven business efforts that extends from purchase-to-payment of digital assets.
But AppDirect is connecting developers and resellers to different marketplaces, and that seems to me like a different kind of service than what the competition offers.