The cost of APIs

For over a decade, I've been serving the API community. I was lucky to meet some of the best developers, managers, and strategists in the API space. During the time, I've learned that delivering and integrating APIs takes an incredible amount of expertise and stamina. The price of APIs is hefty for enterprises but almost prohibitive for small companies. It is a norm that businesses dedicated to APIs spend non-trivial sums on APIs teams. But these API centers of excellence are only a fraction of the overall cost of API development and API integrations. So what is the total? How much did the development and integration of APIs cost in 2020?

When Postman published their 2020 State of the API Report, I realized it might help us estimate API development works overall cost. So let's do some math!

In the Postman survey, 36% out of 13 586 participants claim they spend 10--20 hours/week working with APIs. Another 24,6% claim more than 20 hours/week.

According to statista.com, the full-stack developer salary is (worldwide average) about 54 000 USD/year, giving us the 25,96 USD/hour.

Looking at the Postman report and using the lower boundary of the claimed hours, we get:

• Group 1 = (36% of 13 586) x 10 hours x 25,95 USD / hour = 1 269 768,46 USD/week
• Group 2 = (24,6% of 13 586) x 20 hours x 25,95 USD / hour = 1 735 350,23 USD/week
• Total = 3 005 118,69 USD/week
• Yearly = 156 266 172 USD/year

That puts us at 3 M USD/week or way over 156M USD/year only for the actual respondents of the survey!

Total costs of API works

Statista.com suggests there were about 23.9M developers worldwide in 2019. Postman claims to have over 10M registered users (more recently, Postman announced "13-million-strong Postman community"). Putting aside the mind-blowing fact that over a third of developers on this planet uses the same developer tool, we can estimate the total number of API (work) development costs.

The following method is only an estimation, but it helps us ballpark the APIs work costs. I am sure there is a more scientific method to approximate this number --- if you know one, please let me know in the comments.

Let's assume that 50% of the Postman-claimed 10M user base mimics the ratio outlined in their survey.

• Group 1 = (36% of 5M) x 10 hours x 25,95 USD/hour = 467 307 692,31 USD/week
• Group 2 = (24,6% of 5M) x 20 hours x 25,95 USD/hour = 638 653 846,15 USD/week
• Total = 1 105 961 538,46 USD/week
• Yearly = 57,5×10⁹ USD/year

We are looking at about 57 billion USD every year for the costs of work on APIs alone! To put it into perspective, the cost of the tallest building on this planned --- Burj Kalifa is about 1,5 billion USD, and the estimated cost of a human mission to Mars (according to some plans) is about 55bn USD!

The 57,5bn USD/year does not consider the other part of the claimed Postman user base, neither developers not using Postman at all. As such, I'd not dare to take it as the lower boundary for the global API works, with the upper one reaching as much as 100bn USD in 2020 alone. It is also safe to assume that the number will only grow higher thanks to the 2020/2021 pandemic digital transformation acceleration!

What do you think of this number? Do you agree with the observations? Is your company spending more o less on API development and API integrations? Let me know!