SaaS Q&A: What are the pros & cons of API-based SaaS?

Offering API-based features or products touches on every aspect of your SaaS business, from how you sell to how you scale. Take a quick look at the potential benefits and drawbacks.

API-based features or products can have a huge impact on the dynamics of a SaaS startup. In recent years we’ve noticed a trend towards dedicated API-first SaaS products, which are often broken out as ‘micro-services’ from larger SaaS solutions. And other companies, like us here at ChartMogul, are rolling out an API offering as the business develops. Given this trend, it’s useful to consider the implications on the rest of a SaaS company’s operations.

Read more about this industry trend in our recent guide, The Rise of the API-based SaaS.

Here are some benefits of an API-based SaaS product:

  • Little to no design, UX consideration required. There is no user interface, and therefore you aren’t doing any visual design.
  • Speed and style of scale. You can scale more quickly to a large volume of customers, and also have more control over how the service is scaled.
  • Value to customers. There’s inherently more focus on the true value you’re delivering to customers, because the value is usually in the raw data you’re providing.

And some drawbacks to keep in mind:

  • Sales cycles are generally much longer. Committing to purchasing an API-based solution can be seen as greater risk for the customer, due to the initial barrier to integration.
  • Onboarding. It can be more difficult to provide a great onboarding experience when engineering and development time are required to start using the product:

CEO Contentful API

  • Less flexibility in pricing. You’ll have less options for pricing your solution. Pricing for API-based solutions is usually volume-based (depending on the number of requests you make to the API).

This answer was originally published on Quora. View the original thread here:

How does an API play into the growth of an enterprise SaaS startup?

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Ed Shelley

Former Director of Content


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