Are API costs rising?

It isn’t just a tired developer’s imagination: the cost of some application programming interfaces (APIs) is rising. Experts suggest this price jump is mirroring other expenses related to AI. Is there anything software teams can do to rein in these costs?

Brad Cline, VP of IT business applications at SolarWinds, told IT Brew that as bigger tech companies expand their use of AI and build data centers “quicker than we can even find land, power, water, everything else needed,” they’re also trying to offset those enormous AI-related costs.

For example, Salesforce now charges more for API access, which could impact the cost of any apps that rely on Salesforce’s data. But it isn’t only Salesforce, according to Cline: Other cloud providers have increased API and data costs, too.

“[We’re] not looking forward to the next round of Salesforce [negotiations],” Cline said. “We’re in a contract right now, but recent contracts had 100% increase in some of our data egress and API connections, not necessarily Salesforce, but I’m expecting from them as well. So, 100% is obviously very impactful…You’re talking about a pretty monumental increase in your run rate.”

In announcing it would change its price model for API access, Salesforce joins other companies like JPMorgan Chase that have previously shared plans to either charge or charge more for data access. Even social media company X announced it would institute revenue-sharing for APIs, according to Mashable.

Costs are rising…everywhere? Industry professionals are seeing the cost of IT infrastructure, such as SSDs and other types of storage, continue to rise. Cameron Daniel, CTO at Megaport, suggests that AI isn’t the sole culprit in terms of price increases for APIs and other tools.

In addition to AI, the indirect costs of integrating platforms like Salesforce, Workday, Google, and other platforms becomes an “intense and costly endeavor.”

“From my perspective, I think it’s the indirect costs where it gets tricky, because the API costs aren’t usually so [direct’” Daniel said.

But AI is a factor, Daniel said. In the case of Salesforce and other software providers, he added, “I guess some of those platforms as well, quite a lot have been adding AI functionality over the last few years…then that’s been increasing their costs and eating into their margins. So now, they’re increasing the cost of their plans.”

Amazon is also increasing its API prices. Chris Grusz, managing director of technology partnerships at Amazon Web Services, told IT Brew that “we’ve raised it, but our overall philosophy is that we will always pass on our costs wherever we can.”

“If things are going up, it just makes it harder for our customers to adopt that,” Grusz added, “and we don’t want cost to be an inhibitor to buying and adopting [AI] because…we’re firmly in the belief that this is going to be a radical change for the industry.”

What to do about it? With costs rising, Daniel said it might be a good time for IT pros to try and build out APIs in-house rather than signing up for a vendor’s integration platform.

But that might require too much time and too many resources, and companies may face their own internal roadblocks for developing APIs internally, including development time and the potential need to hire specialized expertise.

Cline believes that businesses shouldn’t seek to mix and match services to reduce costs and the amount of data transmission; instead, they should invest in limited partnerships. He said that mixing and matching services won’t help the rising costs—instead, consolidating data flows through choosing an API or other software provider and applying their services to other parts of the enterprise.

If an organization has employed any of the primary cloud providers, Cline said, “If you’re able to keep your data within their ecosystem and get a similar result, or maybe customize and build some things within that data lake, or within that cloud and process and get to the same result…then you get the business to see through cost benefit analysis here.”